Mediation continues in archdiocese bankruptcy case - Albuquerque Journal

Mediation continues in archdiocese bankruptcy case

Copyright © 2020 Albuquerque Journal

The attorney representing a creditors committee of clergy abuse survivors told a judge this week that it may seek standing in the case to challenge the Archdiocese of Santa Fe’s movement of assets before it filed for bankruptcy.

“The committee is ready to move forward on standing motions to avoid fraudulent conveyances that we believe occurred when the archdiocese corporately reorganized,” James Stang, a Los Angeles-based attorney representing the committee, said Monday. “We believe there’s a basis for us bringing those fraudulent conveyance actions.”

Parties in the Chapter 11 case were in court Monday updating a federal Bankruptcy Court judge on the status of mediation.

In court filings, the committee says offers and counteroffers have been exchanged, but the archdiocese and creditors have not been able to reach an agreement on the terms of a reorganization plan. A third mediation session is scheduled for next week.

One impediment they’ve discovered, the committee says, is a move by the archdiocese before filing for bankruptcy to incorporate all of its parishes and to transfer substantial property to a real estate trust of which the archdiocese and parishes are beneficiaries. A substantial amount of money was also moved into a trust.

Stang said in an interview Monday that their theory is that the transfers were made with an intent to hinder or defraud the creditors.

In court documents, the committee asserts the archdiocese has rights under state law and Bankruptcy Code to recover the transferred cash and property from the trusts, which could possibly be used to pay creditors.

The creditors committee also says the archdiocese is not taking adequate steps to realize the value of its real estate assets and that there has been disagreement over the value of a sexual abuse claim.

Bruce Anderson, one of the attorneys representing the archdiocese, said in court that good faith mediations continue and they remain committed to resolving claims on behalf of survivors. Attorneys did not respond to calls seeking comment on the committee’s plans. Archbishop John C. Wester has said in the past that he decided to file for reorganization to ensure that all claims of child abuse survivors, including those who come forward in the future, can be settled “fairly and equitably.”

Federal Judge David Thuma acknowledged Monday that negotiating cases such as this is difficult, but he said the alternative is not attractive.

“I think everybody appreciates that a full-blown litigated Chapter 11 is kind of a last choice of all parties,” he said. “It’s incredibly expensive, it takes forever, and it’s just not something that’s designed to provide a satisfactory solution to the abuse victims or the church or anybody else.”

He set another status hearing for early next month and said he is doing the best he can to help the mediation process along.

“I understand Mr. Stang’s position that, you know, at some point, you have to start filing motions and doing things that are adversarial,” he said.

Around 400 people have filed notices with the U.S. Bankruptcy Court alleging they were harmed and are owed damages tied to abuse by priests and other clergy working in the archdiocese.

Home » ABQnews Seeker » Mediation continues in archdiocese bankruptcy case


Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

1
FBI opens hate crime probe of shooting in Dallas' ...
ABQnews Seeker
Dallas police have arrested a suspect ... Dallas police have arrested a suspect in connection with a shooting that wounded three women in a hair salon in the city's Koreatown and ...
2
Calf Canyon/Hermits Peak blaze surpasses 2012's Whitewater-Baldy
ABQnews Seeker
Northern NM fire has burned at ... Northern NM fire has burned at least 262 homes
3
Council-approved budget would up spending by 20%
ABQnews Seeker
Plan includes pay increase for city ... Plan includes pay increase for city workers, rental support
4
As wildfires rage, state says unemployment assistance is available
ABQnews Seeker
Assistance is available for weeks of ... Assistance is available for weeks of unemployment beginning April 10 through Nov. 5
5
Defendant says he shot JB White 'to stop him'
ABQnews Seeker
Montoya takes stand, says SF basketball ... Montoya takes stand, says SF basketball star chased him, was about to 'throw a power punch'
6
'Not intimidated,' Block pitches himself as a fighter for ...
2022 election
GOP hopeful brings combative edge to ... GOP hopeful brings combative edge to governor's race
7
Grandma gets honorary degree for aiding New Mexico community
ABQnews Seeker
She runs Socorro's Restaurant in Hernández She runs Socorro's Restaurant in Hernández
8
States struggle to replace fossil fuel tax revenue
ABQnews Seeker
Budgets flush with petroleum cash put ... Budgets flush with petroleum cash put spotlight on how difficult it is to turn rhetoric on tackling climate change into reality
9
Governor appoints former U.S. Navy officer to state Cabinet ...
ABQnews Seeker
Dye appointed to run state agency ... Dye appointed to run state agency tasked with natural disaster response