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Clergy abuse bankruptcy moves toward resolution

The old St. Francis Cathedral school in Santa Fe is among the properties being sold by the Archdiocese of Santa Fe, which filed for Chapter 11 bankruptcy reorganization.

Copyright © 2021 Albuquerque Journal

Archbishop of Santa Fe John C. Wester is living out of two rooms at an Albuquerque parish these days, his formal diocesan home sold to help pay for the sins of his predecessors and the damage done by priests and other clergy members who molested children.

The archdiocese reported selling the four-bedroom, tri-level house near its Catholic Center on Albuquerque’s West Side for about $425,000 as part of a stepped up liquidation of assets in its ongoing Chapter 13 bankruptcy reorganization, which appears closer than ever to settlement.

“Basically every piece of property the Archdiocese of Santa Fe corporation-proper owns is ‘on the block,’ ” according to a bankruptcy update written earlier this month by archdiocese Vicar General Father Glenn Jones.

He reported that Wester has moved to smaller quarters in an undisclosed “parish facility.”

Properties being sold include a well-known archdiocese retreat center in Santa Fe and may ultimately include the St. Pius X High School property in Albuquerque.

The Immaculate Heart of Mary Retreat and Conference Center in Santa Fe is also being sold.

Jones also reported that parishes throughout the archdiocese are expected to pitch in an average of several hundred thousand dollars each to help compensate nearly 400 victims of clergy sexual abuse who have filed claims in the 2-year-old bankruptcy case. The archdiocese has 93 parishes.

“The good news: The claimants committee and the archdiocese have (finally!) reached an agreement on the settlement amount, though the total is confidential by law,” Jones wrote. “The not-so-good news: it’s a lot, and will require a very determined and collective effort of the (archdiocese) and the parishes.”

Jones was unavailable for comment last week, but his candid missives provide new details about how the church is summoning its resources while, as he wrote, “suffering for the sins of others.” His Vicar’s Corner updates appear on the archdiocese public website.

“Likewise, we Catholics of our area are now called to this present sacrifice to provide some – though inadequate – compensation for crimes against those so grievously hurt by abuse, as well as to settle continuing liability of the (archdiocese) and the parishes.”

Attorneys for the victim claimants declined to comment for this story but have complained for months that church officials were dragging their feet on relinquishing and liquidating properties and other assets that weren’t essential to the archdiocese mission.

Archdiocese attorney Ford Elsaesser told the Journal last week that compared with six months or a year ago, “significant progress” has been made in selling properties.

“The sale of properties is moving along very well and will continue to do so,” Elsaesser said, “The parishes will not be selling any essential property. Parishes will likely assist the archdiocese in this process. … That’s all I can say.”

In a Vicar Corner update in February, Jones wrote, “There are no persons now in ministry who have claims of child abuse against them, and yet many want to hold the whole of the archdiocese – all 250,000-ish of us – liable for those crimes. Certainly we have much sympathy for victims, but one still wonders about the just-ness of holding the many accountable for the actions of a relative few.”

The archdiocese website shows that 79 clergy members, mostly priests, have been credibly accused of child sexual abuse over the years. Most are deceased.

Many of the abuse claims date back decades and involve allegations that former archbishops failed to act on reports of abuse. Wester was assigned to the archdiocese in 2015.

In lawsuits, victims’ attorneys have contended that the church hierarchy as far back as the 1950s protected and empowered priests and other clergy members to sexually abuse children in New Mexico parishes. Many of the victims were altar boys at the time. Now adults, the survivors contend they are still having to deal with the emotional damage decades later.

Nearly 300 claims were settled in a mediation process in the decades before the bankruptcy action was filed in December 2018, the archdiocese website says, with insurance paying a “substantial” portion of those settlements.

Church officials say that they adopted a “zero-tolerance” policy in 1993 and that once a report of sexual abuse of a child is made, the archdiocese removes the “accused” from ministry pending investigation, its website says.

Facing a new surge of about three dozen claims, the archdiocese filed for bankruptcy reorganization as a way to conserve dwindling assets and ensure an “equitable” settlement for all victims, Wester said at the time.

“Success of the bankruptcy is the least painful outcome for everyone,” Jones said in his update.

Seeking legal protection

In 2013 and 2014, the archdiocese incorporated most of its parishes as nonprofits – a strategy used by some other dioceses around the country seeking legal protection from sexual abuse lawsuits.

Archdiocese officials said at the time that the incorporations were designed to “describe each parish as a unique civil entity.”

But lawyers for victims claimed the move was an attempt to shield archdiocese assets and therefore deny bigger payouts to claimants in the bankruptcy action.

Jones said in a recent update that if the bankruptcy case isn’t settled, “the vast majority of the parishes could very likely be faced with similar individual civil lawsuits by each claimant, which may result in far more funds and property lost than in the (bankruptcy) lawsuit – up to and even including the possible loss of halls, churches, etc. Legal fees alone could devastate assets.”

In fact, some clergy abuse lawsuits have been filed in recent years against individual parishes rather than the archdiocese.

But Jones wrote that all entities contributing to the final settlement will receive legal protection from future lawsuits for events before the bankruptcy filing in December 2018.

The archdiocese and its attorneys conferred with pastors earlier this month, partly to “emphasize the urgency of the situation.”

“The pastors, much to their credit, for the most part have grasped well the urgency … and are now working hard to find the contributions we need to finally settle the lawsuit,” Jones said in his update.

Parishes can contribute through the sale of “non-mission-essential properties, savings and donations,” he wrote.

Realizing that some parishes will be less able to contribute, “others have much,” he wrote. “We’re talking an average of several hundred thousand $$ per parish, on top of virtually all of the ASF (archdiocese)-proper assets also being ‘monetized’ through sale, loans, donation or the like.”

“Faced with this challenge, we can run away and hide like the apostles in the Garden … or we can stand by Jesus and His Church in this agony, looking to that new dawn and resurrection.”

Santa Fe properties

As of last week, two major archdiocese property sales were pending that could generate up to $10 million for the claimants: the old Cathedral School in Santa Fe, which was listed at $3.6 million, and includes some adjacent parking, and the 12-acre Immaculate Heart of Mary Retreat Center at 50 Mount Carmel Road near Santa Fe’s Museum Hill. That property was listed at $7.8 million but tentatively is being sold for $6.4 million to a company called Mighty Tai, court records show.

Vicar General Jones wrote that the archdiocese also is showing properties for sale that are next to St. Pius X High School on Albuquerque’s West Side, including the Madonna Retreat Center, Lourdes Hall and St. Clare Hall.

In addition, the archdiocese is seeking court approval to hire an auctioneer to sell up to 732 smaller parcels, mostly vacant land. Advertising for the sales is scheduled to begin about April 15.

Jones wrote that “many are rightfully concerned” about the fate of St. Pius X High School.

“Since it is an (archdiocese) property, it is unavoidably included in (archdiocese) assets and while WE think it is an essential entity for our mission, neither the (claimants) nor the bankruptcy court have come to that conclusion, therefore, its value is going to have to be included in the possible assets to be ‘monetized’ for the settlement.”

He said there may be ways to save the school at that location by selling adjacent properties or seeking loans and contributions.

“Unfortunately, the estimated value of the property used by (the high school) is around $10 million, so coming up with that kind of money is difficult.”

Because creditors in bankruptcies demand that properties be openly marketed to determine the true market value, Jones wrote that the archdiocese might not be the highest bidder even if it raised $10 million.

“Should the worst occur and (the high school) has to be sold, we fully intend to seek another location for this very important (WE would say ‘essential’ part of our mission).”

If the high school has to be sold, “the chancery itself will very likely have to be included and (archdiocese) offices moved elsewhere – likely some leased facility. Basically, that’s all the assets of the (archdiocese)-proper corporation.”

Once claimants and the archdiocese agree on a payout figure, they then work with religious orders also facing survivor claims to determine their contribution. Finally, the archdiocese and survivor attorneys negotiate with the archdiocese’s insurance companies to come up with a final amount.

“Sadly much of the negotiation is confidential,” Jones wrote.

“For my own part, I wish it were ALL open, because secrecy creates doubts about good faith,” he wrote. Openness in negotiations would be welcomed, he said, in a “situation which affects literally hundreds of thousands of persons in our archdiocese, and will have repercussions faraway and long after.”

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