JURIST - Paper Chase: Bankruptcy judge rejects Spokane clergy sex abuse settlement

[JURIST] Judge Patricia Williams of the US Bankruptcy Court for the Eastern District of Washington [official website] on Thursday rejected a $45.7 million settlement agreement [JURIST report] offered by the Roman Catholic Diocese of Spokane [diocesan website] to 75 clergy sex abuse [JURIST news archive] complainants in February. William ruled that because the settlement only covered 75 of approximately 185 abuse complaints against the diocese, which is only one of three US dioceses to declare bankruptcy due to abuse allegations [Seattle Times report], it did not satisfy the standard for an equitable settlement under bankruptcy law. Williams urged lawyers in the case to enter into mediation to reach a deal that accounts for the named plaintiffs and future complainants. Reaction to the settlement rejection has been mixed, with some parties favoring the intent of the court to ensure fairness for all victims, while others are disappointed with the continuation of the case and need for more mediation.

The Spokane diocese filed for bankruptcy in December 2004 in the face of sex abuse claims for $76 million against assets of $11 million. Earlier this week, the complainants not covered by the settlement proposed an alternative plan that would assess parish land at two-thirds of its value so that the parishes could avoid foreclosure. AP has more. The Seattle Times has local coverage.

For a one-stop snapshot of the latest legal news that matters, with breaking documents, new legal videos, live law-related webcasts, commentary by expert law professors and more - all updated through the day in real time, with no ads and no registration barriers - visit JURIST's homepage and check back often...