Bishop Thomas on Reorganization Approval


To the People of the Diocese of Helena

March 9, 2015

My Sisters and Brothers in Christ,

I am writing to update you on the progress of the civil litigation against the Diocese of Helena involving claims of years-old child sexual abuse and the Diocese consequent filing for reorganization under Chapter 11 of the US Bankruptcy Code.

I am pleased to report that on March 4, 2015, the final hearing in our bankruptcy case was conducted by US Bankruptcy Judge Terry Myers. At the hearing, Judge Myers ratified our Plan of Reorganization, signing the appropriate Orders the following day. It is noteworthy that the Ursuline Sisters of the Western Province have reached a settlement with the Plaintiffs, which is incorporated into the Diocese of Helena final Plan. It is significant to note that the Plan was approved by more than 98% of the victim-survivors and 100% of the creditors.

In his closing statement, Judge Myers commended the Diocese for assiduously avoiding a scorched earth resolution. He characterized the Diocese approach to this bankruptcy as “professional, diligent and enlightened.” The Judge’s words were of great consolation and approbation to me, in light of our decision to pursue these matters based on mediation and pastoral care rather than protracted and acrimonious litigation. In the course of the hearing, on behalf of the entire Diocese, I expressed our apology and sorrow to those who have been victims of sexual abuse at the hands of clergy, religious and lay leaders. I thanked the victim-survivors for their courage in coming forward, telling their stories, and seeing the process through to its conclusion.

In the months ahead, our Virtus training and vigilance will be redoubled so that no child suffers abuse by any of our clergy, religious, lay leaders or volunteers. I assured the Judge in open court that should any complaints come forward in the future the Diocese will cooperate fully with law enforcement, provide background checks on all employees and volunteers, and maintain a phone contact for the Diocesan Victim Assistance Coordinator (406-459-0513).

We are presently in the midst of a mandatory 24-day waiting period before the Plan is fully executed. Distributions to the Plaintiffs in the case should begin in early April, at which time the Diocese will initiate the “non-monetary” provisions of the Plan. The non-monetary provisions include publishing on the diocesan website information about those accused in the lawsuits, along with the names of priests against whom accusations of child abuse have been made to the Diocese in the past.

Before the close of the calendar year, I will be inviting you and victim survivors to reconciliation prayer services, which will be conducted in various areas of the Diocese.

The Plan provides that funds from the insurance carriers, the Ursuline Province, and the Diocese will be deposited into a Trust account managed on behalf of the Bankruptcy Court by a firm specializing in the administration of such Trusts. A consultant, secured by the Plaintiffs’ attorneys, will see to the equitable distribution of settlement funds to the Plaintiffs and those who filed a Claim prior to the bar-date. A retired Federal Judge, approved by the bankruptcy Court, will oversee administration of the Channeling Injunction (which requires that any claims arising in the future and involving sexual abuse prior to January 31, 2014, must be resolved in the manner outlined in the Plan). The final documentation is available on the diocesan website: www.diocesehelena.org/reorganization-filing

Additionally, the Plan addresses on-going operations of the Diocese of Helena, and provides assurances that we will now be able to move into the future with balanced budgets and safeguards assuring fiscal accountability. I am deeply grateful to our Financial Services Director, Jim Carney, for his conscientious work in assuring that the financial requirements of the bankruptcy process were completed.

Another significant element of the reorganization Plan includes the establishment of a separate Trust for the gradual and systematic restoration of the Diocesan Deposit and Loan. In the years leading up these massive lawsuits, the Diocese was already facing financial instability due to expenses related to the education of seminarians, medical bills not funded through premiums during the time the Diocese was self-insured, unpaid parish-related premiums, indebtedness related to Catholic Schools, the continuance of diocesan pastoral programs, and the support of needy parishes. It is our hope and intention to restore the Deposit and Loan to the greatest degree possible, and to reestablish parish balances which have been zeroed out during the time of bankruptcy. This process is ongoing and will take many years to accomplish, and will be overseen by the appointment of independent Trustees.

Over eighteen months ago, the financial circumstances of the Diocese required the reduction of Chancery staff by nearly 50%, with an attendant reduction in central services to the parishes. It is important to underscore the reality that these services cannot be restored in the foreseeable future, until that time when we regain sufficient fiscal stability.

Throughout this process I have conducted exhaustive consultation and consent procedures with our Diocesan Finance Council and College of Consultors. Both groups have been tremendously supportive and their discernment, sensitivity and insight were key elements in making the difficult but necessary decisions over these past years.

We have been blessed, as well, with a very competent cadre of civil attorneys, whose advice and expertise have been invaluable to the resolution of these matters. With their assistance, the Diocese has been able to emphasize pastoral care and mediation, rather than the rancor which often accompanies these kinds of cases.

Throughout these challenging years, I have daily commended our Diocese to the maternal care of the Blessed Mother, asking her to carry our needs and petitions to the Heart of her Son.

I continue to count on your prayerful support during the upcoming months as we move into a future full of hope.

Asking God’s abundant blessings upon you and your families, I remain

Sincerely yours in Christ,

Most Reverend George Leo Thomas