Church official warns of financial flood due to abuse claims

Church official warns of financial flood due to abuse claims

In this photo taken Monday, April 27, 2020, a woman walks pass the historic San Felipe de Neri Church in Albuquerque, New Mexico. (Credit: Russell Contreras/AP.)

A top official with the Archdiocese of Santa Fe says a financial flood from clergy sex abuse claims is coming and a settlement would serve as the dam to prevent devastation to parishes across northern New Mexico.

SANTA FE, New Mexico — A top official with the Archdiocese of Santa Fe says a financial flood from clergy sex abuse claims is coming and a settlement would serve as the dam to prevent devastation to parishes across northern New Mexico.

A letter from the Monsignor Glennon Jones is posted on the archdiocese’s website. It states that progress is being made in collecting donations for a bankruptcy settlement prompts by allegations of abuse perpetrated by priests and other clergy over decades.

The letter states that should the bankruptcy fail, nothing would be safe from liquidation to pay for legal costs and lawsuit settlements.

“What a tragedy it would be to lose hundreds-of-years-old churches and property to legal fees and lawsuit settlements, not to mention much of New Mexico’s cultural legacy built over centuries by donations of time, talent and treasure of your families and friends,” he wrote. “And, perhaps worse, the loss of access in providing sacramental, spiritual and material nourishment to those in need, as well as teaching our young ones love of God, love of neighbor.”

Jones said for example, the archdiocese used to provide hundreds of thousands of dollars to charity, but those funds have recently gone to lawyer and legal fees.

In October, a U.S. bankruptcy judge ruled that lawyers for clergy sex abuse survivors can file lawsuits alleging the archdiocese fraudulently transferred millions of dollars in property and other assets to avoid bigger payouts to victims. That decision in the Chapter 11 reorganization case opened the door to what could be a multimillion-dollar boon to hundreds of alleged victims. It could also result in protracted, costly legal appeals that would tap funds that could have paid valid abuse claims.

Mediation is ongoing, the Santa Fe New Mexican reported.

James Stang, a Los Angeles attorney who represents a committee of abuse survivors in the case, said there is a “conditional settlement agreement” that would require certain actions by the archdiocese. Other parties such as insurers and parishes would need to be brought in and a plan of reorganization written.

The bankruptcy court would have to approve the agreement.

While threatened litigation is on hold and mediation continues, Stang didn’t say an agreement was imminent. He declined to say how much money could be at stake.

The court has indicated that more than $150 million could be involved, and that was only for a portion of the assets victims potentially could receive.

The archdiocese filed for reorganization in late 2018 to deal with the surge of claims. An estimated $52 million has been paid in out-of-court settlements to victims in prior years.

Levi Monagle, an Albuquerque-based attorney who represents dozens of victims, said a settlement will be complicated but possible “if all the parties continue to put in the necessary blood, sweat and tears.”

“The survivors in this bankruptcy have been tremendously patient thus far — they are warriors in every sense. If they can hold out a little longer, keep fighting a little longer, then we can get this settlement done — and on very good terms,” Monagle wrote in an email.

Jones wrote that the archdiocese is “making pretty fair progress” in fundraising but he also said it risks losing the proposed settlement if certain goals aren’t met soon. It wasn’t clear what goals he was referring to.

Jones said through a spokeswoman that further details are covered by confidentiality restrictions imposed by the court.

In the letter, Jones said church leaders “lament so very much those who have failed you so grievously in the past. Yet, all we can now do is move forward and look to a new day.”

He said he hoped the new day would include healing for the victims and for parishioners.

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