Sex abuse lawsuit seeks $70 million in assets from Montana diocese

Attorneys for victims of sex abuse have filed a lawsuit against a bankrupt Catholic diocese in Montana last week to ensure that more than $70 million in assets will be available to their clients.

A committee representing eight sex abuse victims filed a complaint against the diocese of Great Falls-Billings in the U.S. Bankruptcy Court on Dec. 18 in an attempt to reach a negotiated settlement in the dispute over the matter of $70 million worth of diocesan assets.

According to Fox News, the diocese filed for bankruptcy protection in March as part of sex abuse settlements in a lawsuit involving over 400 victims.

The officials said at the time that the diocese and its insurers would set up a fund for the victims and additional money will be provided for those who have yet to come forward.

Church officials have contended that the disputed assets should not be made available because they are held in trust for diocese's parishes and thus not part of the bankruptcy estate.

Attorneys for the victims argued that the parishes are not separate legal entities from the diocese and therefore have no exclusive claims to the trust.

Great Falls Tribune reported that the victims are also seeking access to the Gergen Trust, a batch of investments and mineral rights that were transferred by a priest to the diocese during the 1970s. The asset was supposed to be distributed to parish schools in Great Falls and Billings after a period of time.

The victims said that abuse was taking place at the St. Thomas Home in Great Falls and at St. Labre Indian School on the border of the Northern Cheyenne Indian Reservation when the property was transferred to the diocese in 1978.

California attorney James Stang, who represents the committee, said that the complaint is part of the process and that his clients are hoping to reach a settlement.

Since 2004, Stang has represented unsecured creditors in 11 other Catholic church bankruptcies and all cases resulted in a negotiated resolution.

Bishop Michael Warfel said that the latest complaint was an "unfortunate and unnecessary distraction" in the church's efforts to resolve the issue.

"This is a most unfortunate and unnecessary distraction from the tasks at hand in the bankruptcy, in creating and ultimately distributing a fair and just settlement to the abuse victim[s]," Warfel said. "The diocese will continue in its commitment and efforts to reach a fair resolution of these claims in the bankruptcy," he added.

Church officials noted that the diocese has been implementing abuse prevention programs for more than two decades. The measures that were put in place include screening and training for employees, volunteers, priests and seminarians and an independent board to review claims.