by Bryan Denson and Nancy Haught
The Oregonian
Wednesday February 18, 2009

The ink on the Northwest Jesuits’ bankruptcy filing was still drying Wednesday when wrangling over the value of the Catholic order’s assets commenced.

Officials at a handful of Jesuit-sponsored institutions said they don’t belong to the Jesuits and aren’t subject to their legal problems, while lawyers who represent people sexually abused by priests said the province has grossly underestimated its worth.

Kelly Clark, a Portland lawyer who has represented victims of Jesuit priest abuse, said he was surprised to read that the Jesuits declared assets of just $4.8 million in their Chapter 11 bankruptcy filing late Tuesday in Portland. And he expects a legal fight over properties commonly associated with the Society of Jesus, Oregon Province, better known as the Jesuits.

"They’re going to say that they don’t own Jesuit High School, Gonzaga University, Seattle University and maybe other institutions — even though those institutions were Jesuit established, Jesuit dominated," Clark said. "I think the legal question will be, are they Jesuit controlled for purposes of determining equitable ownership? So there are going to be a number of hard-fought legal battles."

Clark said the Jesuits’ estimate of assets isn’t unprecedented. In 2004, he said, the Roman Catholic Archdiocese of Portland underestimated the value of its assets in its initial bankruptcy filing, a calculation that — after much legal wrangling — was corrected by the court. He predicted a similar battle ahead for the Jesuits.

The Oregon Province of Jesuits, including its leader, the Rev. Patrick J. Lee, would not comment on the bankruptcy on Wednesday, said spokesman Pat Walsh. But the leadership of Jesuit High School, St. Andrew Nativity School and the Jesuit Volunteer Corps said their institutions are not owned, financed or governed by the Jesuit province and that the bankruptcy won’t affect their programs.

"We have never shared assets with the province," said John Gladstone, president of Jesuit High School in Beaverton. The school has been separately incorporated since its founding in 1956, he said. Expecting that the Oregon Province might declare bankruptcy, the school consulted its own attorneys. "They looked at our bylaws, how we’re set up financially and structurally … and they told us we’re very safe," he said.

In a letter sent to the parents of Jesuit High’s 1,160 students Wednesday, Gladstone and Principal Sandy Satterberg said there were no pending claims against any Jesuit High priest and that the school is "not at risk in any way as a result of the province’s bankruptcy filing."

Lawyers who represent victims of alleged abuse by Jesuit priests scoffed at Tuesday evening’s comments by Lee, who had described the order’s decision to file for Chapter 11 reorganization as the only way to offer a fair settlement to claimants.

"Does anybody really believe that the Jesuits, who’ve raped hundreds and hundreds of Native (American) kids, are filing bankruptcy to help them?" asked John Manly, a Newport Beach, Calif., lawyer who represents native Alaskans who have accused Jesuit priests and their colleagues of sexual abuse.

Tuesday’s filing wasn’t an altruistic endeavor, he said, describing it as a calculated effort to prevent more victims from coming forward, halt the legal discovery process — and the bad press that comes with it — and downplay the order’s assets.

"I’ve been litigating with these guys for the better part of 10 years," Manly said. "I’ve never seen them try and help a victim. Their idea of help is to file a motion for summary judgment and dismiss. They fought the Alaska Supreme Court to get these cases dismissed and lost, and that’s why they’re in bankruptcy — not to help people, (but) because essentially their legal options have run out."