Divisions emerge over the process of selling Catholic church properties
The unprecedented process by which a Catholic archdiocese of St. John’s sells its properties in order to compensate victims of abuse was back before a judge on Friday, with opinions differing on what should happen next.
Lawyers for the archdiocese and its trustee, Ernst & Young, have asked that the process move to the Companies’ Creditors Arrangement Act, commonly known as the CCAA, to allow more time for an orderly liquidation of the assets.
Lawyers for the victims, however, filed a petition against the decision, saying the current process should continue.
After more than two hours of debate, Justice Garrett A. Handrigan of the Supreme Court of Newfoundland and Labrador ordered that the proposal process under the Bankruptcy and Insolvency Act remain in place until that he can make a decision at the end of May.
This is the latest chapter in a painful and heartbreaking time for the Roman Catholic Archdiocese of St. John’s and the hundred or so claimants who were abused while at the Mount Cashel Orphanage more than a half ago. -century.
Some properties have been sold
The archdiocese has been found vicariously liable for the abuses and has been granted creditor protection by the courts while it sells properties, including churches, to compensate the victims. While the amount of money needed to settle the claims is expected to be in the millions, the process of finalizing those claims is still in its early stages, the court said on Friday.
The Archdiocese announced Dec. 21 that it is seeking bankruptcy protection under the Bankruptcy and Insolvency Act to determine the value of its assets and liabilities and to develop a proposal for the settlement of victims’ claims, a process that usually lasts six months.
Since then, with court approval, the Archdiocese has sold several residential properties and is soliciting offers on a range of assets in the St. John’s area, including the Basilica of St. John the Baptist. The deadline for submissions is June 2.
In many cases, members of the congregation are expected to buy out their churches, although in some cases, churches that are no longer viable are likely to close and be sold to private interests.
Archdiocese sues insurer
A bidding package is expected to follow soon on church properties in other areas of the Avalon and Burin Peninsulas.
The archdiocese is also suing its insurer, which refuses to indemnify or defend the archdiocese, with a trial scheduled for November.
Solicitor for the archdiocese’s land arm, the Roman Catholic Episcopal Corporation of St. John’s, Geoffrey Spencer, told Handrigan that the proposal process would not be completed within the time allowed under the Bankruptcy Act. and insolvency.
As such, he said the restructuring should proceed through the CCAA process.
“No one can question the fact that the RCEC acted in good faith,” Spencer said. “The plaintiff has worked hard to move forward to meet the responsibilities he faces.”
If CCAA protection is not granted, he added, the archdiocese will face bankruptcy, “which would not be in anyone’s interest.”
If the archdiocese goes bankrupt or goes into receivership, he said, the locks will be changed on the properties, the church community will cease to maintain the properties, and the value of those assets will decline.
“It’s in everyone’s interest to have an orderly sale process to maximize the return for creditors,” he said.
Spencer said the CCAA process will also give church communities more time to raise funds to redeem their churches.
Spencer said there was “zero chance” a proposal would be completed by the June 21 deadline. He said it was not wise to wait until the last minute to seek CCAA protection because the archdiocese would risk “falling into bankruptcy.”
Lawyers for the victims, however, opposed the request.
Clifton Prophet said the current process should unfold, after which a wider range of options, including receivership, could be considered.
He said the outcome of the current bidding process will help chart the way forward and if the CCAA transition is approved, it will limit the options.
“The sale of these properties…if it turns out to be attractive, that’s fair enough. Otherwise, I want a fair chance to put this through a creditor-driven process, rather than a debtor-driven process,” did he declare.
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