Bankruptcy judge rejects Spokane clergy sex abuse settlement

[JURIST] Judge Patricia Williams of the US Bankruptcy Court for the Eastern District of Washington [official website] on Thursday rejected a $45.7 million settlement agreement [JURIST report] offered by the Roman Catholic Diocese of Spokane [diocesan website] to 75 clergy sex abuse [JURIST news archive] complainants in February. William ruled that because the settlement only covered 75 of approximately 185 abuse complaints against the diocese, which is only one of three US dioceses to declare bankruptcy due to abuse allegations [Seattle Times report], it did not satisfy the standard for an equitable settlement under bankruptcy law. Williams urged lawyers in the case to enter into mediation to reach a deal that accounts for the named plaintiffs and future complainants. Reaction to the settlement rejection has been mixed, with some parties favoring the intent of the court to ensure fairness for all victims, while others are disappointed with the continuation of the case and need for more mediation.

The Spokane diocese filed for bankruptcy in December 2004 in the face of sex abuse claims for $76 million against assets of $11 million. Earlier this week, the complainants not covered by the settlement proposed an alternative plan that would assess parish land at two-thirds of its value so that the parishes could avoid foreclosure. AP has more. The Seattle Times has local coverage.

 

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.