Monday, January 02, 2006

Selling churches to pay claims

Portland, Jan. 02 ( - In a ruling that severely damages the strategy of some American Church leaders, a federal judge in Oregon has ruled that parish properties legally belong to the Portland archdiocese.

The ruling means that the Portland archdiocese could be forced to sell parish rectories, schools, and even church buildings to settle the financial claims of victims of clerical abuse.

The decision announced on December 31 by Judge Elizabeth Perris is not binding in other jurisdictions. However, it matches an earlier decision by another federal judge in the state of Washington, and suggests that American bankruptcy courts are unlikely to accept the argument that parish properties should be exempt from the claims of plaintiffs suing dioceses.

As hundreds of sex-abuse victims press their legal cases for compensation, several American dioceses have argued that their financial assets are strictly limited, since the dioceses do not own the properties held by individual parishes. Questions about the ownership of parish assets have arisen in legal proceedings involving dioceses all around the US.

In July 2004 the Archdiocese of Portland became the first Catholic see ever to seek protection under US bankruptcy law. In their petition for bankruptcy protection, the archdiocesan lawyers listed the claims of sex-abuse victims who had won judgments of over $150 million against the archdiocese, with dozens of other plaintiffs still asking for $400 million in pending lawsuits.

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