Archdiocese files for Chapter 11 Bankruptcy

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Guam – Its official the Archdiocese of Guam has filed for Chapter 11 bankruptcy to ensure they have enough money to settle the scores of sexual abuse cases against the Catholic Church but according to the Church the Catholic Faithful have nothing to worry about.

Archbishop Michael Byrnes made it a point to pass on the message that complete justice can’t be brought to the victims of sexual abuse within the Catholic Church because the crimes against these victim survivors can’t be compensated as it will never be enough. But the Archdiocese of Guam hopes that some amount of justice is achieved through the path chosen by the Church, a path they formally embarked on this morning, Chapter 11 Bankruptcy re-organization.

“We are here just to announce in the last several minutes we completed our filing in the District Court and again our motivation for going to this measure has been and still is to bring the greatest measure of justice in consolation to those who suffered at the hands of clergy,” reassured Archbishop Michael Byrnes.

With the number of sexual abuse claims filed against the Church now over 200 the Church’s Bankruptcy attorney Ford Elsaesser provided a breakdown of what will happen next, now that Church has filed for bankruptcy.

“There are three principal aspects to the reorganization of the AOA and it is all focused as Archbishop stated in the Archdiocese attempts to bring the maximum amount of justice to survivor’s of abuse. The first part of bankruptcy the first part of the reorganization process which will be approx the next six months will be to provide broad notice to anyone who may have a claim against the archdiocese of agana but has not filed yet. They will have the opportunity to file up until a deadline date which will probably be sometime in the May to June time frame,” explained Elsaesser.

During this period the AOA legal counsel will be working with the claimants attorneys through a committee appointed by the bankruptcy court to attempt to settle non-essential properties for the best prices possible to help fund the re-organization and compensation of abuse survivors.

“Second part of the bankruptcy once that deadline has passed in May or June we will go as soon as possible to mediation with our insurers, with the representative of abuse claimants and their legal representatives and perhaps with other defendants in hoping to craft an overall settlement that will be utilized in the bankruptcy to compensate the victims,” continued Elsaesser.

Once the settlement is achieved Elsaesser shares that the next move would be to incorporate that settlement in a Chapter 11 Re-organization plan.

“That is a plan that is democratic process which the actual abuse claimants will be voting on whether to confirm the plan and if the plan is successful and approved by the bankruptcy court after the claimants. Elsaesser continued, in that third piece that is when the compensation will be distributed to the claimants.”

So how much money will the AOA need to fork out to settle? While that number is still up in the air, as it stands today the AOA identifies 22.9 million in current assets. And although a bit hesitant to provide an exact figure for liabilities, calling it a moving target, Elsaesser stated that the Church’s liabilities are estimated to be 45.6 million. Interestingly the Bankruptcy petition indicates each liability for the sexual abuse claims as $100,000. PNC will be further examining the 143-page petition.

Meanwhile Thursday, the Church will go before the federal court to seek the courts approval to continue operations as normal throughout the Archdiocese.

“At that time the Archdiocese will have some motions to continue the routine operations at the diocese such as making payroll keeping our bank accounts open and allowing the financial transactions so that the Archdiocese can continue to operate in a normal and usual fashion,” stressed the Church.

This means that the Catholic Schools, parishes and Church missions such as Catholic Social Services and cemeteries will remain unaffected by the bankruptcy. Then in about three to seven weeks a Section 341 meeting of creditors will convene on island to question under oath Archbishop Byrnes and the Church’s financial team.

“To ask questions about the financial condition and of the operations of the Archdiocese. There will also be hearings on the motions some of them which will be heard tomorrow to finalize those orders which we hope will be approved tomorrow on an interim basis,” explained Elsaesser.

 

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Jolene Toves
Jolene joined the PNC team in 2017, as a producer, co-anchor and investigative reporter covering law enforcement, courts and crimes. Notable coverage includes the Ehlert case, the Mark Torre Jr. trial, the Allan Agababa trial, exclusive pieces on the Life of a Drug Dealer/Addict, and Life behind bars...the story of Honofre Chargualaf and Kevin Cruz. In 2019, she was promoted to Assistant News Director and Lead Anchor. From 2015 to 2017 she served as Public Relations and Promotions Manager, for the Hotel Nikko Guam handling local radio and advertorial promotions, as well as produced and directed tv commercials for the hotel. Prior to this she worked with KUAM for three years as a reporter and segment host. She began her journalism career in 2012, working with Glimpses of Guam contributing to the Guam Business Magazine, R&R magazine, MDM magazine and the Marianas Business Journal.