Archdiocese to Seek Bankruptcy Protection

PORTLAND, Oregon, JULY 6, 2004 ( The Portland Archdiocese said it would file for bankruptcy because of the costs stemming from clergy sex abuse lawsuits, an unprecedented step among U.S. Catholic dioceses.

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The planned move delays the start of the trial of two lawsuits seeking a total of $155 million, Archbishop John Vlazny told reporters.

He said the Chapter 11 bankruptcy filing would allow the Church to pay all claims without selling off parish assets. A Chapter 11 bankruptcy filing frees a group from the threat of creditors’ lawsuits while it reorganizes its finances.

The archdiocese has paid $21 million from its own funds to settle claims in the last four years, the prelate said, but insurance companies have refused to cover some 60 current claims.

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