Survivors of clergy sexual abuse were denied a motion for relief in the bankruptcy case involving the Archdiocese of Guam.
The Lujan and Wolff law firm and the Berman O’Connor and Mann firm filed a motion for relief of stay last December. The two law firms represent a total number of 210 survivors.
The motion seeks to allow litigation to resume against the Archdiocese of Guam and permit the survivors to add the Church’s insurers as parties to the pending litigation.
But District Court Chief Judge Frances Tydingco-Gatewood, in her decision and order, recognized that the bankruptcy code is designed to give debtors a breathing spell from their creditors and to stop all collection efforts.
Denying the motion, Tydingco-Gatewood stated: “The purpose of the automatic stay is to centralize all litigation involving the debtor in one court in order to grant the debtor temporary relief from creditors, prevent needless dissipation of the debtor’s estate, and allow for reorganization . . . to proceed in the most efficient manner possible. If the stay is lifted, these benefits will be lost. At this time, based on the current circumstances and the reasons stated herein, lifting the stay to litigate civil cases is not the most efficient manner to proceed in the bankruptcy case.”
She noted that litigation in the civil cases has not progressed to even the discovery stage. The judge described the proposal of a first trial in six months after lifting the stay as being “unrealistic.”
Initially, the motion requested that the stay be lifted in all of their respective cases. However, upon suggestion by the Official Committee of Unsecured Creditors, they agreed to limit the litigation to four cases.
But according to the Chief Judge, those four cases have not been identified.
“Movants noted that the survivors are ‘aging’ and ‘may die’ before debtor provides them with closure. Interestingly, however, what movants are seeking here would only prolong the closure process. Lifting the stay to litigate four cases will likely take at least a few years.”
The automatic stay was initiated on Jan. 16, 2019, when the Archdiocese of Guam filed for bankruptcy having been named in over 250 civil cases in the District Court of Guam and the Superior Court of Guam.