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Sex abuse claims push N.M. diocese into bankruptcy

| Tuesday, Sept. 3, 2013, 5:51 p.m.

GALLUP, N.M. — The Diocese of Gallup plans to petition for Chapter 11 reorganization in federal bankruptcy court because of mounting clergy sex abuse legal claims, according to Bishop James Wall.

In a statement read in parishes during the weekend, Wall said the filing “is the most effective and thoughtful course to take in light of the claims from those who were abused.

“Under Chapter 11, the Diocese will have the opportunity to present a plan of reorganization that provides for a fair and equitable way to compensate all those who suffered sexual abuse as children by workers for the church in our Diocese those who are currently known, those who haven't yet made the decision to come forward, and those who might come forward in the future,” Wall added.

The bishop promised to “be open and transparent” during the bankruptcy process. Wall said he would be available to meet with concerned individuals or groups, and he invited people to email or write him about the decision.

“It is very important to me that you all understand that I have not taken this step to avoid responsibility for what happened or to hide anything,” he said.

The diocese includes parishes in six counties in New Mexico, three counties in Arizona and seven American Indian reservations.

The Gallup diocese will become the ninth Roman Catholic diocese or archdiocese to seek bankruptcy protection since the clergy abuse scandal erupted in 2002.

Two Catholic religious orders have done so.

The other dioceses or archdioceses to file for Chapter 11 are in Milwaukee; San Diego, Davenport, Iowa; Fairbanks, Alaska; Portland, Ore.; Spokane; Tucson; and Wilmington, Del.

There was no immediate word on Tuesday on whether the diocese had filed the petition.

Robert Pastor, a Phoenix attorney who has filed 13 clergy sex abuse lawsuits against the diocese, said he was surprised because he hadn't received notice from diocesan attorneys about their intent to file the Chapter 11 petition.

The Gallup Independent reports that Pastor's first lawsuit over abuse allegations is scheduled to go to trial in February.

“If the diocese files a petition for bankruptcy, typically any case pending in any state or federal court will be stayed or put on hold,” Pastor told the newspaper.

“Chapter 11 bankruptcy was designed to help companies restructure debt,” Pastor added. “Bankruptcy was never intended to be a tool to help Catholic Bishops hide other perpetrators or the knowledge it had about pedophile priests working in the diocese.”

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