Over the course of the next few weeks there will be legal motions filed by the Diocese with the Bankruptcy Court regarding claims of clergy abuse called the “Future Claims.” The following questions and answers explain the reason and necessity for these current legal steps being taken by the Diocese.

Q. I thought the bankruptcy was over?
A. As part of the Chapter 11 Bankruptcy Plan that became effective May 31, 2007, provisions were made for the processing of clergy abuse claims which were not filed on or before the claim bar date of March 10, 2006, set by the Bankruptcy Court. Those provisions were established for claimants who had not recognized by the bar date that he or she had been injured as a minor by clergy abuse which they had never forgotten or had repressed the memory of such abuse. These claims are called Future Claims.

In order to provide a way to handle those types of claims, a $1 million Trust Fund was established by the Diocese as part of the Bankruptcy settlement. This $1 million was reserved out of the $48 million settlement amount. This Trust Fund is secured by the Diocese and most of the parishes in Spokane County and is administered by the court-appointed Plan Trustee. A Claims Reviewer was appointed by the court to adjudicate any such claims.

Q. What are these legal motions about?
A. The Bankruptcy Plan established strict standards for the Claims Reviewer to follow in order to allow any such claims. In the 29 months since the effective date of the Plan, 21 Future Claims have been received by the Claims Reviewer. The Claims Reviewer has recently allowed seven of those Future Claims. The Diocese, after consulting with its attorneys, strongly believes that for some of the allowed claims, the provisions of the Plan have not been followed, and the claims should not have been allowed under the Plan as Future Claims. As a result, after consultation with the Presbyterate and the Diocesan Finance Council, the Diocese has determined that it is necessary to bring this matter before the Bankruptcy Court in the form of a motion to enforce the terms and conditions of the Plan as it relates to Future Claims. This motion will be filed in the next few days and heard sometime after it is filed, depending upon when the Bankruptcy Court sets it for hearing.

Q. How does this involve my parish?
A. At the time the Plan was approved, due to the extensive claim notice program and media coverage of the Bankruptcy and the clergy abuse issue, it was felt by most that there would not be a significant number of Future Claims and that the $1 million Trust Fund set aside for Future Claims would be sufficient to pay properly allowed Future Claims. If, however, the $1 million Trust Fund ultimately is not sufficient to pay allowed Future Claims, then the Plan provides that the Diocese must replenish the Fund, maintaining at least a $200,000 minimum balance in the Fund, until May 31, 2016. Under the Plan, this obligation is secured by the properties of all the Catholic parishes in Spokane County, with the exception of St. Mary’s Presentation Parish in Deer Park. If the fund becomes depleted and the diocese reaches a point where it can no longer replenish the fund, then the parish properties might well be at risk. That is why it is so important to make sure the Plan is properly followed and only those claims which meet the Plan definition and strict criteria as true Future Claims are allowed.

We believe we have strong legal arguments in this matter regarding the proper implementation of the Plan and administration of the Future Claims Fund. I will keep you informed as this matter progresses through the Court.

Please hold this matter in prayer.

Your Brother in Christ,
William S. Skylstad
Bishop of Spokane