Catholic World News News Feature

Portland archdiocese declares bankruptcy July 06, 2004

The Archdiocese of Portland, Oregon, has filed for bankruptcy, seeking court relief in the face of overwhelming legal damages in sex-abuse lawsuits.

At a press conference on Tuesday, July 6, officials announced that the Portland archdiocese would become the first Catholic diocese to ask for protection in a "Chapter 11" bankruptcy proceeding. The Diocese of Tucson, Arizona, is reportedly considering bankruptcy, as are several other American dioceses that have been hammered by legal judgments in sex-abuse cases.

A "Chapter 11" bankruptcy filing allows the archdiocese to protect some essential assets, dividing the remainder among creditors. The court proceedings will allow creditors to examine detailed financial statements from the archdiocese, exposing all the business affairs of the archdiocese to public scrutiny.

The bankruptcy filing brings a temporary halt to all legal proceedings in which the archdiocese is a defendant. Spokesmen for the archdiocese told reporters that the Church "could not afford what the plaintiffs are asking."

The Portland archdiocese, which has already paid out more than $50 million to victims of sexual abuse, still faces a number of major legal claims in new lawsuits. The largest claims involve accusations against the late Father Maurice Grammond, who died in 2002. Victims are asking for a total of over $160 million in the suits involving Grammond, who allegedly molested dozens of young men.

"The pot of gold is pretty much empty right now," said Archbishop John Vlazny.

Lawyers for abuse victims charged that the archdiocese is simply trying to avoid payments.