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Lawyers in case to define assets of Gallup Diocese

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The Diocese of Gallup identifies itself in court records as “the poorest diocese in the United States,” where 43 percent of residents live below the poverty level.

A key job of attorneys in the diocese’s ongoing bankruptcy case will be to sort out the diocese’s assets from those of its 53 parishes and three nonprofits that operate within the 55,000-square-mile diocese, court records and attorneys say.

The diocese listed $646,000 in assets and $667,000 in liabilities, according to records it filed Nov. 12 in U.S. Bankruptcy Court District of New Mexico.

The Diocese of Gallup is the ninth U.S. diocese to file for chapter 11 reorganization bankruptcy in response to claims and lawsuits filed by alleged victims of sexual abuse by priests.

Attorneys in the case say the value of the diocese’s assets and the cost of claims against the diocese have yet to be determined.

Assets listed by the diocese in court records do not assign dollar values to real property, such as church-owned land, said the diocese’s attorney, Susan Boswell of Tucson. Land parcels in the court records list the property values as “unknown.”

Nor do court records list the potential liability to the diocese for abuse claims filed by alleged victims of priests, she said. The diocese’s court filings list 121 potential abuse claimants, with the amount of each claim listed as “unknown.”

Attorneys also say U.S. Bankruptcy Judge David Thuma will need to decide whether the diocese’s assets include parish properties.

The diocese contends parishes are “separate ecclesiastical entities” that manage their own finances under the supervision of a parish pastor, Gallup Bishop James Wall wrote in court records filed last month in U.S. Bankruptcy Court District of New Mexico.

Under Canon Law, Wall wrote, “the debts of a parish must be paid from the assets of the parish,” not those of the diocese. Nor are parishes responsible for the debts of the diocese, he wrote.

In addition to the parishes, three Catholic organizations that operate within the diocese “are separate and independent” from the diocese, Wall contends. The nonprofits are:

  • The Catholic Peoples Foundation, formed in 1998, which raises money to support the mission and ministry of the diocese. Wall is an ex-officio member of the foundation’s board, he said.
  • The Southwest Indian Foundation, incorporated in 1968, provides services and programs for members of the seven tribes and pueblos in the diocese.
  • Catholic Charities of Gallup, incorporated in 1974, serves pregnant teenagers and teenage mothers, provides transitional housing and other services, Wall wrote.

All three Gallup-based nonprofits are registered with the New Mexico Secretary of State’s office. Catholic Charities of Gallup, the only one of the three that files a Form 990 with the IRS, listed about $2.9 million in assets in 2012.

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