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Bankrupt Gallup diocese looking at property sales

Copyright © 2015 Albuquerque Journal

Attorneys have asked a judge to authorize an Albuquerque firm to appraise several Gallup of Diocese properties, including two Catholic schools in Gallup and Thoreau, as a possible source of funds to pay for a bankruptcy reorganization plan.

The bankruptcy case had racked up about $1.86 million in legal and professional costs through Dec. 31, court records show.

Attorneys have asked to appraise St. Bonaventure Indian School, a private Catholic school in Thoreau, and Sacred Heart Catholic School in Gallup. Both teach students from preschool through eighth grade.

St. Bonaventure school contends it is not owned by the diocese, the school’s attorney said this week.

The Diocese of Gallup in 2013 became the nation’s ninth Roman Catholic diocese to file for Chapter 11 bankruptcy protection in response to a growing number of lawsuits filed by alleged victims of sexual abuse by priests.

Attorneys for the diocese asked U.S. Bankruptcy Court Judge David Thuma last month to authorize Estate Valuation Consultants Inc. of Albuquerque to appraise the two school properties and three other “key properties.” The firm would perform the appraisals for a flat fee of $22,100, the motion said.

Attorneys also are seeking appraisals for the 15-acre Sacred Heart Retreat Center south of Gallup, the diocese’s chancery office in Gallup, and a fifth property identified only as the Smith Lake property. Thuma had not ruled on the request this week.

Susan Boswell, a Tucson, Ariz., attorney representing the Gallup diocese, told Thuma that the diocese is negotiating a settlement with a committee representing 56 alleged sexual-abuse victims who have filed claims in the bankruptcy case.

Both the victims’ committee and the diocese agreed that certain properties could be “liened, liquidated or otherwise used” to fund a settlement plan, Boswell wrote in a motion. Additional properties could be appraised by agreement between the parties, she wrote.

Calls to Boswell and James Stang, a Los Angeles attorney representing the claimants’ committee, were not returned this week. A Diocese of Gallup spokeswoman referred questions to Boswell.

Charles Hughson, an Albuquerque attorney representing St. Bonaventure, said the school contends that the Thoreau property is owned by the school, not the diocese.

“It is the position of the school that it owns the land in question,” Hughson said.

St. Bonaventure Indian School is a ministry of St. Bonaventure Indian Mission, which serves the Navajo Nation, according to the school website.

The school enrolls about 200 students, more than 90 percent of whom live near or below the poverty level, it said.

St. Bonaventure filed a legal complaint in Thuma’s court in January 2014 saying that the Diocese of Gallup conveyed to the school a deed for the Thoreau property in 1992. St. Bonaventure later withdrew the complaint.

“The voluntary withdrawal of that complaint wasn’t in any way a concession that its land belonged to the diocese,” Hughson said. He declined to comment about the diocese’s plan to appraise the school property.

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