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Gallup Diocese has loans totaling $229,000

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The Diocese of Gallup obtained two loans totaling $229,000 from neighboring dioceses to help pay for professional services related to its Chapter 11 bankruptcy, a church official said this week.

The loans included $29,000 from the Archdiocese of Santa Fe and $200,000 from the Diocese of Phoenix, according to court records the Gallup diocese filed in U.S. Bankruptcy Court in Albuquerque.

The loans were obtained shortly before the Diocese of Gallup filed for bankruptcy on Nov. 12, to help pay for legal and financial services, Gallup Bishop James Wall said Thursday at a creditors’ meeting in Albuquerque.

Wall did not specify the date or terms of the loans, which are listed as unsecured nonpriority claims in the diocese’s court filings.

Gallup is the ninth U.S. Roman Catholic diocese to file for bankruptcy in response to lawsuits by alleged victims of sexual abuse by priests. It faces 13 lawsuits filed in Arizona Superior Court since 2010.

The diocese has hired as lead attorney Susan Boswell of Tucson, with Quarles & Brady LLC, a nationwide firm that specializes in bankruptcies. Boswell previously represented the Diocese of Tucson and the Catholic Bishop of Northern Alaska in Chapter 11 reorganizations, court records show.

Boswell notified the court that she will seek compensation for professional services at an hourly rate of $375 for the first 125 hours, after which her fee will increase to $495 an hour, records show. Boswell’s services commenced Aug. 1.

Three other attorneys and a paralegal at Quarles & Brady also will seek compensation ranging from $125 to $300 an hour. The diocese agreed in September to pay the firm a $200,000 retainer. Other professionals hired by the diocese are:

  • Christopher Linscott, a certified public accountant and consulting director of Keegan, Linscott & Kenon of Tucson, to provide financial and accounting services. Court records list Linscott’s fee as $235 an hour.
  • Albuquerque attorney Thomas Walker, of Walker & Associates, as New Mexico co-counsel. Walker’s fee is listed at $250 an hour.
  • Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, an Albuquerque law firm, as special litigation counsel.

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