Court confirms Gallup diocese's bankruptcy plan

Albuquerque, N.M. — style="line-height: 20.8px;">U.S. Bankruptcy Judge David T. Thuma confirmed the Gallup, N.M., diocese's Chapter 11 plan of reorganization June 23, two days after he presided over the plan's confirmation hearing in Albuquerque, a hearing that concluded in dramatic fashion.

Much of the first half of the confirmation hearing was devoted to sorting through the plan's legal details and issues. Susan Boswell, the lead bankruptcy attorney for the Gallup diocese, reported that the clergy sex abuse claimants who had submitted timely ballots had voted to accept the plan.

Under the plan provisions, the Gallup diocese, seven other Catholic entities and three insurers will fund a trust of approximately $22,975,000. After professional fees and trust fees and costs are deducted, about $19,281,000 will remain to compensate most or possibly all of the 57 abuse claimants. However, some claimants may not receive a monetary settlement if their claim does not qualify under the allocation protocol.

"I think everybody would agree that given the financial circumstances of this debtor and the insurance picture at the time that we filed this case, that the settlement fund, the recovery, and where we are today is not something that -- certainly when we filed it back in November of 2013 -- we conceived could be achieved," Boswell said.

Related: Gallup diocese files bankruptcy plan

The second half of the hearing, however, took a dramatic turn when Bishop James Wall, as well as several abuse survivors, offered statements to the court about the sexual abuse that changed the course of the diocese's history and devastated the lives of countless children and their families across the sprawling, rural diocese that covers much of northwestern New Mexico and northeastern Arizona

"I want to first begin by acknowledging the reason why we're here today, and the reason is because bad people, bad men committed bad and sinful acts against good people," Wall said. "And there's no excuse for that. There never was and there never will be an excuse for that."

"These are men who are supposed to represent Jesus Christ and draw people into a deeper relationship with him," the bishop added. "And they did the complete opposite. So I want to start by saying I'm sorry for that."

Wall, who repeatedly referred to clergy sex abuse survivors in the Gallup diocese as "our survivors," thanked those in the courtroom for "helping us to shed the light on this darkness."

"Thank you for your courage to stand up, to come forward to tell your story," he said. "I know it wasn't easy. I know it was very difficult, but I'm grateful for your courage, so thank you very much."

Wall said he wanted to help heal past abuse, harms and hurt, and said he was looking forward to having healing services throughout the diocese and writing letters of apology to abuse survivors.

Attorney James Stang, legal counsel for the Official Committee of Unsecured Creditors that represents the interests of abuse claimants, also apologized for the shortcomings of the bankruptcy court system regarding clergy sex abuse cases.

"These folks will live with this experience obviously the rest of their lives," Stang told the court. "And I refer what happened to them as a generational crime."

"I want to apologize," he added. "I want to apologize because our system doesn't do justice to these folks."

Thuma allowed the small group of abuse survivors to gather in the front of the courtroom, at a table normally reserved for attorneys. Four abuse survivors, two men and two women, made statements to the bishop and the court. Phoenix attorney Robert E. Pastor, who represents nearly a third of the abuse claimants, was also allowed to read a statement on behalf of one of his clients.

Their statements -- sometimes very emotional -- included a few references to the dissatisfactions some abuse survivors have regarding the list of non-monetary provisions diocesan officials agreed to incorporate into the Gallup diocese's plan of reorganization. The list of 17 provisions was the result of lengthy negotiations and was one of the last documents to be added to the plan.

Although Pastor and a number of abuse survivors had called for the public release of the personnel files of credibly accused abusers, Wall refused to include that as a non-monetary commitment. A whistleblower protection provision was also apparently not accepted by the diocese, according to comments by an abuse survivor after the hearing.

In addition to the inclusion of some current policies and procedures, the list of non-monetary provisions does include the following new commitments by the Gallup diocese:

  • The diocese and its representatives will not refer either verbally or in writing to abuse claimants as "alleged" claimants, "alleged" victims or "alleged" survivors.
  • Although the personnel files of abusers will not be publicly released, abuse claimants will have electronic access to a read-only copy of their abuser's personnel file. That file cannot be viewed by anyone other than the claimant and may not be duplicated in any manner. Access to the files will end after one year, after which the copies will be destroyed.
  • Within 60 days after the effective date of the plan of reorganization, the bishop shall send letters of apology to all abuse claimants and/or, if requested, to immediate family members unless a claimant requests in writing that he or she does not wish to receive a letter.
  • The bishop will personally visit each Catholic parish or school in which abuse occurred or where identified abusers served, with a schedule to be published at least 30 days in advance of each meeting. This provision states the bishop "shall provide a forum/discussion during his visit to address questions and comments." Wall's intentions, however, may be something quite different. In a form letter to abuse survivors that follows the list of non-monetary commitments, the bishop states: "I would like to invite you to attend a Prayer Service, so that together, we can continue this very important healing process. Please join me at any of the following times, if you so choose to attend." Nothing in the letter refers to the forum/discussion format to address questions and comments as required in the non-monetary provisions.
  • For a period of not less than 10 years after the plan's effective date, the diocese will post, through a prominent link on its website homepage, its list of credibly accused abusers. Although Wall released a list of 31 names in December 2014, that list has not been updated since. The non-monetary provisions state the diocese will add additional names after the plan's effective date.
  • The diocese shall prominently and visibly display a plaque -- no smaller than 8.5 inches by 11 inches -- in each operating Catholic parish and school stating: "This Parish (or school) is strongly committed to the emotional, physical, spiritual and moral wellbeing of all of its members. Abuse of any kind will not be tolerated."
  • The diocese will provide a mechanism for survivors to tell his or her story, if requested by the survivor.
  • The diocese will include the current policies and procedures regarding child abuse and vulnerable person abuse prevention on its website.
  • The diocese shall publish these non-monetary stipulations on its website homepage for a period of five years after the effective date.     

[Freelance reporter Elizabeth Hardin-Burrola has been covering the Gallup diocese since 2002.]

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