Bankrupt Morality Leads To Bankrupt Diocese

Diocese announces bankruptcy filing
by Megan BaldinoThursday, Feb. 14, 2008
FAIRBANKS, Alaska -- Facing millions of dollars in settlement costs from dozens of clergy sex abuse cases, the Fairbanks diocese announces it is filing bankruptcy. The announcement was made yesterday after bishop Donald Kettler told his staff and parishioners. Peter Kobuk is one Alaska resident who settled with Jesuit priests assigned to the Fairbanks Diocese. He spoke to Channel 2 News in 2004 and acknowledged being raped by a priest. Kobuk was raped at a church in St. Michael by Deacon Joseph Lundowski.

His case and 112 others were recently settled by the Society of Jesus Oregon Province, commonly known as the Jesuits, for $50 million. But a co-defendant in the case, the Catholic Diocese of Fairbanks could not reach a settlement.

The diocese announced Wednesday it would file bankruptcy in order to help settle claims with more than 140 victims across the state. "We do acknowledge that wrongs were committed and the chapter 11 process is a way for us to start acknowledging that and allowing for some compensation," Hannon said. Ken Roosa, an attorney for dozens of the plaintiffs, says the bankruptcy announcement comes as no surprise to him or his clients, since the diocese's insurance company is refusing to pay. Roosa said everyone hopes bankruptcy will help bring closure. "So getting this series of bankruptcy hearings into court will give the judge, the case, a lot more leverage and control because the bankruptcy judge will have jurisdiction and control over the insurance companies as well as the debtors and the creditors of the clients," Roosa said. Everyone affected by this controversy -- victims, the diocese and attorneys -- hope this decision will pave the way toward closure from the sins committed by a few clergy decades ago.
Hannon also said that the catholic school in Fairbanks should not be compromised by the bankruptcy filing nor does it expect to lay-off any staff.

Roosa said attorneys have always felt the Jesuits and the church were equally liable.

The Diocese is looking at millions of dollars in payments to victims. This is a church with 40 parishes or missions and an operating budget of only $6 million dollars. So Hannon said this will be a complex and challenging time for the diocese.