Judge keeps eye on Archdiocese legal bills

02/22/2005

Associated Press

U.S. Bankruptcy Judge Elizabeth Perris is concerned that lawyers for the Archdiocese of Portland are eating away at money she wants preserved for creditors.

Earlier this month, the judge asked the archdiocese's lawyers to attend a Feb. 8 hearing on legal fees. In a letter, she suggested that the number of meetings among lawyers "may be excessive."

Perris also questioned whether the firms were dividing up responsibilities efficiently, whether they were doing unnecessary work and whether the bills complied fully with bankruptcy rules, The Oregonian reported in its Tuesday editions.

As of Jan. 31, the archdiocese has accrued almost $2.2 million in legal bills during the course of its 7-month-old bankruptcy.

At the February hearing, the archdiocese's lead bankruptcy attorney, Thomas W. Stilley, assured the judge that the number of meetings among lawyers was decreasing as they became more familiar with the complexities of the case, which has no legal precedent.

In July, the archdiocese became the first in the U.S. to declare bankruptcy following the clergy sexual abuse scandals. The church was faced with dozens of lawsuits from plaintiffs seeking more than half a billion dollars in damages.

"This case requires more communication than would normally be the case," Stilley said. "We're also dealing with issues that are novel and difficult to figure out."

Shortly after the archdiocese declared bankruptcy protection, the church's bankruptcy law firm, Portland's Sussman Shank, estimated that professional expenses in the case would approach $4 million.

"And unfortunately," Stilley told Perris, "I feel that's realistic."

The archdiocese has hired four law firms to guide it through the complex case. Besides its own law firms, the archdiocese is required by the federal bankruptcy code to pay its adversary in the case — Tonkon Torp, the Portland law firm that represents the claimants committee, which consists of sex abuse plaintiffs.

The archdiocese has thus far been able to keep up with the bills, said Bud Bunce, an archdiocese spokesman.

"We've been able to meet these financial costs through very careful financial management," he said. "We've done this by continuing with the reduced staff and budgets that we started in July 2003."