NEWS FEATURE: Boston Archdiocese Averted the Bankruptcy that Portland Later Sought

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c. 2004 Religion News Service

BOSTON _ By December 2002, the threat of priest-abuse claims had forced the Archdiocese of Boston into financial straits that seemed so desperate its leaders saw just one way out: seeking protection in federal bankruptcy court.

Cardinal Bernard Law, then head of the archdiocese, received grudging permission from the Vatican to file. But after Law resigned that month, church leaders across the country intervened to stop what they regarded as a dangerous precedent.

“We were the story, and what was going on in Boston was having ripple effects across the country,” said the Rev. Christopher Coyne, an archdiocese spokesman. “So everybody was trying to say, `You can’t act as autonomously as you might otherwise because it is going to have ramifications for the whole country.”’

Earlier this month, the Archdiocese of Portland became the nation’s first Roman Catholic archdiocese to file for bankruptcy, taking the drastic step that Boston had avoided when the priest-abuse scandal was front-page news.

Leaders of the Archdiocese of Boston succeeded where those in Portland failed for a variety of reasons, according to church observers. The biggest difference, many say, is that Boston was able to sell off a large tract of property to pay $85 million in claims.

Timing also was a key factor. Once considered a sign of weakness, bankruptcy might now be taken as a sign of the church’s willingness to set limits and defend itself against the demands of victims’ lawyers for punitive damages.

“It may send a signal to people with claims that there is a limit to what any institution can pay out in damages,” said Tom Groome, director of the Institute of Religious Education and Pastoral Ministry at Boston College. “It’s not limitless.”

Meanwhile in Boston, anger and frustration continue to mount despite the archdiocese’s improved financial condition. Some clergy and parishioners say that church leaders are making cuts as painful as any that could be handed down by a judge.

“I’m sure there are people in the church who see this as a model, but I’m not one of them,” said the Rev. Ronald Coyne, pastor of St. Albert the Great in suburban Weymouth and no relation to the spokesman. “I don’t believe it’s going to help the archdiocese at all.” His is one of 65 parishes scheduled to close by the end of the year.

Although the Boston archdiocese did not file for bankruptcy, a public airing of Law’s discussions with the Vatican set the stage for a sweeping settlement with parishioners claiming they had been sexually molested by priests.

Bishops from several other large U.S. archdiocese intervened to halt the filing because they feared a bankruptcy in Boston _ the nation’s fourth-largest Catholic diocese _ could limit their options in dealing with priest-abuse settlements.

“All the bishops are concerned about bankruptcy because they lose control of the church’s finances, and there’s not a lot you can do without money,” said the Rev. Thomas Reese, editor of America, a Catholic magazine. “Going to court is a gamble, and nobody knows how that is going to be determined.”

Through much of 2003, representatives of the Boston archdiocese and claimants met to work out a settlement. On Sept. 9, they arrived at a total of $85 million, based in part on a detailed accounting of church properties and other assets.

Underlying the negotiations was an issue now at the heart of the Portland case: Which assets belonged to the archdiocese, and which belonged to individual parishes within the archdiocese? Lawyers for the archdiocese and victims agreed early on that church buildings and other parish properties should not be counted as assets of the archdiocese available to help pay settlements. Both sides said the focus of the talks was the archdiocese’s 70-acre headquarters campus in Boston’s Brighton neighborhood.

Mitchell Garabedian, a lawyer who has represented more than 300 area plaintiffs in the past decade, said he did not argue about ownership of parish properties in part because he knew the archdiocese had sufficient resources to pay his clients’ claims.

Coyne said it was not clear at the time how the archdiocese would meet terms of the settlement. Attendance and donations were down as a result of the scandal, and the headquarters property was thought to be worth only about $50 million, he said.

Then in April, the archdiocese struck a deal with neighboring Boston College, a Catholic university. The land-strapped school would pay $99.4 million for a 43-acre chunk of the campus, dealing a knockout blow to any competing offers.

Bankruptcy, once seen as a last, best resort, no longer was an imminent threat. Instead, the archdiocese now faces a different crisis _ one of credibility.

In May _ five weeks after the diocese announced the sale of the Brighton property _ leaders tagged 65 Boston parishes for closure. Their contents will be deconsecrated and the properties sold. Several parochial schools also will shut down.

According to diocesan leaders, the decision to close parishes had nothing to do with the settlement. Rather, it was a difficult step that had been contemplated for at least five years to address declining congregations and aging infrastructure, they said.

“The sale of the property to Boston College was done before we announced parish closings to clearly show that the $85 million that we owed was being paid for by the sale of this property and that none of the parishes were closing to take care of it,” said Christopher Coyne, the archdiocese spokesman.

That official line is hard for some Boston-area Catholics to believe, however. Disaffected parishioners note that proceeds go directly into archdiocese coffers depleted by priest-abuse settlements.

“Obviously they’re selling off all these buildings to pay for something _ and that’s all from that settlement, the abuse cases,” said Glenn Hannington, an area lawyer who represents parents of children at St. Peter’s, a school slated for closure.

Coyne, the archdiocese spokesman, acknowledged that because the archdiocese did not seek protection in bankruptcy court, it cannot guarantee that funds realized from the closure or sale of parish properties are off-limits from future jury awards.

But archdiocese leaders have no regrets about the path they have chosen, he said. Avoiding bankruptcy helped the archdiocese provide the most equitable settlement possible for its victims, he said.

“In justice, we really want to try to pay back the people we owe money, which I think Portland would choose to do if they could,” he said.

RR/JL END KOSSEFF/BARNETT

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