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Judge weighs whether parish, school assets could be used to pay clergy sex abuse claims.
U.S. District Court Chief Judge Frances Tydingco-Gatewood on Friday held off on issuing a ruling that could lead to either the inclusion or exclusion of the assets of Catholic parishes and schools to help compensate 281 Guam clergy sex abuse claimants.
The matter is tied to the Archdiocese of Agana’s more-than-2-year-old bankruptcy case.
Mediation so far has not resulted in a plan agreeable to all parties to get the archdiocese out of bankruptcy. There remain lingering questions about the extent of the archdiocese’s assets and insurance coverage, among other things.
Tydingco-Gatewood on Friday heard three hours of opposing arguments on the motion for partial summary judgment that the committee representing clergy sex abuse claimants and other creditors filed in 2019.
The question is whether 33 Catholic parishes and schools are separate entities that can hold property, including beneficial interest in a trust, independent of the archdiocese, or the debtor.
If the court grants the motion, it could pave the way for the use of Catholic parish and school assets to help compensate those who claimed sexual abuse by priests and other clergy in the archdiocese’s bankruptcy case.
Tydingco-Gatewood said she initially wanted to issue a preliminary ruling, but decided against it after hearing the parties’ oral arguments.
She took the matter under advisement.
“I will issue a ruling as soon as I can and I know it’s important to all of you that I do it expeditiously, but I also want to do it very carefully,” the judge said before the hearing ended after 11:30 a.m.
‘Held in trust’
The archdiocese, represented at the hearing by attorney Ford Elsaesser, said the assets of the parishes and schools are being “held in trust” by the archdiocese or by the archbishop.
As such, these assets are to be shielded from the archdiocese’s ongoing bankruptcy case, he said.
Attorney Edwin Cauldie, representing the committee of abuse survivors and other creditors, told the court there’s no real separation between the archdiocese and the parishes.
He said there’s only one Catholic Church on Guam and “not 33 separate entities.” They’re all being overseen and run by the archbishop, he said.
Cauldie likened the archdiocese to a corporate entity such as Kmart or Ruby Tuesday, with different divisions, which are the schools and parishes. While each division has some degree of autonomy, he said, they all answer to the corporate headquarters, which he said is the archdiocese or the archbishop.
He asked the court to rule in the claimants’ favor without taking the case to trial.
“Survivors have waited long enough. The community has waited long enough,” he said, adding that there’s been enough false division and deflection of ownership and responsibility. “The survivors of clergy sex abuse are not separate from the church. They are the church. They are members of the flock when they were damaged.”
Catholic parishes and schools, through attorney Vincent Camacho, said if the court rules in the committee’s favor, this could lead to the selling of assets that include schools and parishes and will have “grave implications” for the community.
In the judge’s courtroom, representatives from Catholic parishes and schools watched and listened as attorneys argued their position via Zoom.
Camacho said the parishes and the schools are not taking away from the victims of clergy sexual abuse, and are in fact contributing funds to the compensation plan for the claimants.
The archdiocese proposed early last year a $21 million plan to pay claimants, including those allegedly molested and raped by certain bishops, priests and other clergy dating back to the 1950s.
The proposed amount will come from the sale of church properties of about $7 million, payments from insurers totaling about $13 million, and about $1 million expected from Catholic parishes.
Camacho said the court also has to consider that many of the properties were conveyed by donors to individual parishes. A donor who donated an Agat property for a village church, for example, didn’t intend for that property to be used for Yigo residents, Camacho said.
From the outset, the archdiocese said it seeks to compensate abuse survivors while keeping Catholic parishes and schools open.
Cauldie said everyone should remember that the pain and suffering of the clergy sex abuse victims are the reasons the case was put forward.
“There is plenty of suffering all around,” he said. “It’s even more difficult for survivors and that’s why we are here.”
He said the committee is seeking fair and equitable distribution of assets for the people who were hurt by the abuse.
At the time of its Chapter 11 bankruptcy filing in January 2019, the archdiocese listed $22.96 million in assets, with $45.66 million in liabilities.
At one point during the hearing, the judge wondered out loud how nice it would be if the Holy See or the pope at least would consider contributing financially to resolve cases such as the one before the court.
The archdiocese scheduled a Friday news briefing, in anticipation of the judge’s decision. But because no decision was made, the archdiocese decided to end the briefing a few minutes after it started.
Tydingco-Gatewood said there are a total of 281 clergy sex abuse claims, and many have been going through mediation.
Each claim has multiple defendants. One claim, for example, named the archdiocese, the Boy Scouts of America and the Capuchin Franciscans.
The judge said 152 claims “have been settled by mediation,” and noted that this is “really remarkable.”
The Capuchins, the Boy Scouts and other organizations have settled with the claimants, but not the Archdiocese of Agana. Prior efforts to settle the cases failed, and then the archdiocese filed for bankruptcy.