Oregon archdiocese ends bankruptcy with abuse deal

PORTLAND, Oregon Fri Apr 13, 2007 4:15pm EDT

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PORTLAND, Oregon (Reuters) - The Roman Catholic Archdiocese of Portland formally emerged from bankruptcy on Friday with a $75 million settlement plan after 2-1/2 years of court wrangling over how to pay victims of alleged sex abuse by priests.

The archdiocese, facing mounting potential financial claims from 175 people who accused clergy of sex abuse, filed for bankruptcy protection in July 2004, the first in the nation to do so.

Four other dioceses followed suit in the wake of the priest abuse scandal, which erupted in Boston in 2002 and has affected almost every Catholic diocese in the United States.

"All of the known child sexual abuse claims that precipitated the filing of the bankruptcy petition have either been disallowed or are settled and will be paid in full on the effective date of the plan," the opinion issued by Judge Elizabeth Perris of the U.S. Bankruptcy Court in Oregon said.

The parties are still under a gag order until several more legal steps are completed and declined to comment on the settlement on Friday. The plan "was accepted overwhelmingly by the creditors," the opinion said.

Friday's settlement calls for church insurance companies to pay $52 million. The archdiocese has a $40 million credit line from Allied Irish Bank and "additional unrestricted assets" so that parish assets and schools will not need to be sold. The plan establishes a $20 million pool for future claims.

The archdiocese ministers to nearly 400,000 Catholics in Western Oregon.

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