Catholic World News News Feature

Tucson diocese files for bankruptcy September 21, 2004

The Diocese of Tucson filed for bankruptcy protection on Monday, becoming the second US diocese to take the extraordinary step as a result of the clerical sex-abuse scandal. The Portland, Oregon, Archdiocese filed for bankruptcy in July.

Bishop Gerald Kicanas said in a letter to local Catholics that Chapter 11 bankruptcy reorganization offered "the best opportunity for healing and for the just and fair compensation of those who suffered sexual abuse by workers for the Church in our diocese." But lawyers for alleged victims said the filing was an attempt to portray plaintiffs as overly aggressive.

The bankruptcy filing means that court-appointed officials will now oversee the operation of the Tucson diocese, potentially opening up separation of church and state problems. The diocese serves 350,000 Catholic in about 70 parishes in southern Arizona. According to its financial statement, the diocese had $4.65 million in long-term debt and a $7 million deficit in unrestricted net assets as of June 30.

The diocese settled 11 abuse lawsuits by 16 plaintiffs in 2002 for more than $10 million. It now faces 22 more claims brought by 34 plaintiffs.

Bishop Kicanas said the diocese would continue to work toward settlements, but added: "I could not have agreed to a settlement if it would have meant stripping the diocese of everything and thus limiting our ability to respond to the needs of others who have been hurt and who may come forward in the future."

Attorneys for the diocese said most creditors would be paid through normal diocesan operations, but that sex abuse settlement would come from a special pool of about $3.2 million from the diocese, in addition to money from insurance companies and others the diocese believes should share responsibility.