Oregon diocese first to declare bankruptcy

Declaration in lieu of proceeding with sex-abuse trial
In a first for U.S. Catholic dioceses, the Archdiocese of Portland, Oregon, announced its intent this month to file for Chapter 11 bankruptcy protection rather than proceed with a priest-abuse trial that was scheduled to begin the same day.

Archbishop John G. Vlazny said on July 6 that he attempted to seek a reasonable settlement in the case and another that was prepared to go to trial if the first one was settled. But Vlazny said he could not risk going to trial because the suit sought $130 million in damages.

“This is not an effort to avoid responsibility. It is in fact the only way I can assure that other claimants can be offered fair compensation,” Vlazny said. The archdiocese and its insurers already have spent more than $53 million to settle more than 100 claims of priest abuse, the second-highest settlement figure in the nation. “The pot of gold is pretty much empty,” Vlazny said.


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