Replies

Dear Friends in Christ,

On December 30, 2005, the Bankruptcy Court issued a number of rulings in the Archdiocese of Portland’s Chapter 11 case. At this point, I want to be sure you know just what the court’s decision does and does not mean for parishes.

The Court’s rulings do not resolve the property lawsuit in our Chapter 11 case. The Court ruled only on certain specific legal issues. The Court ruled that parishes have no separate civil legal existence — that they are merely part of the Archdiocese — and that parish real estate, therefore, belongs to the Archdiocese.

The Court did not rule on the question of whether the elimination of parish and high school interests in their property would violate the Religious Freedom and Restoration Act. That issue will have to be decided at a trial some time in the future. We will fight hard to protect the First Amendment rights of parishes and parishioners.

Neither did the Court rule on whether other types of parish and school assets (cash, bank accounts, investments, endowments, etc.) are held in trust for a specific charitable purpose, or otherwise for restricted use. There is substantial evidence that various parish, school and Archdiocesan assets are held in charitable trust or otherwise for restricted use. It is still too early to say which, if any, parish or school assets could ultimately become available to pay claims in the bankruptcy or whether that will even be necessary. Those decisions remain for another day.

The Court was and is faced with many difficult issues in our case, which is complex and unprecedented. We are reviewing our options to appeal and evaluating the impact of these rulings on other aspects of our bankruptcy case. Our attorneys believe that various aspects of the rulings will not stand up under eventual review by higher courts.

You have often heard me say that parish assets belong to the parish, as has been our understanding and practice under Canon Law, and that I do not intend to seize parish assets to pay creditors of the Archdiocese. My commitment remains to uphold Canon Law and respect the rights of each parish under Canon Law. If this means I must appeal Bankruptcy Court rulings to a higher court, I will do so.

From the outset of the lawsuits against the Archdiocese six years ago, our primary focus has been on resolving the claims and bringing closure and healing where possible. This has remained the primary focus of the Archdiocese during the bankruptcy. We continue to believe that finding a reasonable way to resolve the remaining claims is the best path to a conclusion of the bankruptcy. Reasonable compensation of valid claimants while continuing the mission of the church was and is my goal. The Tort Claimants’ Committee nonetheless filed an Adversary Proceeding in the bankruptcy court to litigate the issue of the parish assets, which has forced us to spend much time and money in defense.

Where do we go from here? Regardless of the Court’s rulings, the ultimate question is not how much property the Archdiocese owns, but rather, how much the Archdiocese owes to creditors with valid claims. We have resolved and will continue to resolve valid claims fairly, justly and equitably. We will also defend against potentially invalid claims, as we have in the past. To date, we have resolved by disallowance or settlement more than 70 of the child sex abuse claims filed; approximately 115 claims remain. We have proposed to make available close to $40 million to fund the pending and settled-but-unpaid claims and believe this amount will provide fair, just and equitable compensation. The Archdiocese has filed a plan of reorganization, which, if confirmed, would pay these and other claims as early as April 30, 2006. The Archdiocese is also working to settle the Adversary Proceeding on the property of the estate and resolve the entire bankruptcy. We will continue to work cooperatively with the attorneys for the parishes and parishioners to achieve a feasible resolution of this litigation.

Please continue to pray that we will find a way to conclude the bankruptcy of the Archdiocese fairly and justly for all concerned. I appreciate your past generosity and good works in support of the mission of the Church and urge you to remain steadfast in giving of your time, talent and treasure.

Despite the many challenges we face, I am hopeful for good things for our Church in Western Oregon. Many blessings to each of you in the year ahead!

Sincerely yours in Christ,

Most Rev. John G. Vlazny

Archbishop of Portland in Oregon