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Stockton Catholic Diocese closer to bankruptcy filing; no decision made yet

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Posted: Sunday, September 8, 2013 4:31 pm | Updated: 12:33 pm, Mon Sep 9, 2013.

Stockton Diocese Bishop Stephen Blaire says it’s becoming increasingly likely that the Catholic diocese that serves the Lodi area will file for bankruptcy.

In a letter to parishioners throughout the diocese, Blaire said that it doesn’t look like the diocese has an option, especially to pay off or settle any more clergy abuse lawsuits. No decision has been made by diocese officials, Blaire said.

“I feel, however, that it is important to tell you that options other than filing for bankruptcy protection have not emerged,” Blaire said in his letter, which was inserted in the weekly bulletin at St. Anne’s Catholic Church in Lodi.

“It appears likely to me that the diocese will need to reorganize financially under the protection of the bankruptcy court,” Blaire added. “That is why I am meeting in the days and weeks ahead with your pastors and with others who may be affected by a bankruptcy filing by the diocese.”

The Stockton Diocese oversees Catholic parishes from Lodi to Turlock, plus Tuolumne, Calaveras, Alpine and Mono counties. The diocese covers 10,023 square miles and a population of 1.3 million. An estimated 250,000 of them are Catholic.

Local parishes in the Stockton Diocese include St. Anne’s in Lodi, St. Joachim’s in Lockeford, St. Michael’s in Morada and Mater Ecclesiae, a mission church in Thornton.

Meanwhile, leaders for an advocacy group on behalf of clergy abuse victims have requested that the diocese open its financial records to the public and conduct public meetings throughout the diocese before deciding whether to seek bankruptcy protection.

The Chicago-based Survivors Network of those Abused by Priests sent a letter to Blaire on Monday, asking him to allow independent auditors to examine the diocese’s checking  savings accounts, stocks, bonds, property and insurance policies.

“Until you take this simple step toward being open and building trust, reasonable people will doubt your claims of ‘poverty,’ ” according to the letter sent by SNAP Director david Clohessy of St. Louis; Barbara Dorris, SNAP’s outreach director, also from St. Louis; and Joelle Casteix of Newport Beach, SNAP’s western regional director.

Blaire was unavailable for comment Monday, but someone from the diocese said that an independent audit of the diocese finances for the 2011-12 fiscal year is on its website. To access the audit, visit http://tinyurl.com/apunlxe.

Blaire announced in June that diocese leaders were contemplating bankruptcy after reaching a $1.75 million settlement that month with a former parishioner who said he was sexually abused by defrocked priest Oliver O’Grady.

O’Grady was a priest at St. Anne’s from 1971 through 1978. He also served at parishes in Stockton, San Andreas and Hughson before being arrested in San Andreas. He served seven years at Mule Creek State Prison in Ione after pleading guilty to four counts of sexual abuse with children under 14 in Calaveras County while he a priest in San Andreas. He was paroled from Mule Creek in 2000 and deported to his native Ireland.

In late 2010, O’Grady was arrested on charges of possessing thousands of photos of child pornography. He was sentenced to three years in an Irish prison after pleading guilty to three counts of possessing child pornography.

Another local priest, Father Michael Kelly of St. Joachim’s, was removed from his position in 2012 after the diocese settled with former Stockton resident Travis Trotter for $3.75 million. Another lawsuit against Kelly and the diocese was filed in November 2012.

Kelly left the country for his native Ireland shortly after the diocese settled with Trotter.

Blaire said in his letter to parishioners in his letters to parishioners on Saturday and Sunday that if the diocese files for bankruptcy, it will not affect individual parishes, Catholic high schools, Catholic cemeteries, the Madonna of Peace retreat center, Church of Tomorrow, Catholic Charities, SEEDS and other Catholic entities.

Contact reporter Ross Farrow at rossf@lodinews.com.

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