In a blistering, six-page statement, a judge is threatening to throw the San Diego Catholic diocese's bankruptcy case out of court because of a financial report that found problems ranging from parishes withholding money to the diocese failing to report the fair market value of properties.Judge Louise DeCarl Adler has set a Sept. 6 hearing for the diocese's attorneys to show cause why the 6-month-old case should not be dismissed.
Among the concerns cited in her order issued Friday afternoon:
“Some parishes are actively and deliberately hiding assets . . . or inappropriately designating donations as restricted to circumvent or evade the direction of the diocese and/or the court.”
“Bank accounts have not been fully disclosed on the diocese's bankruptcy schedules.”
The diocese “failed to disclose material facts to the court.”
The diocese “failed to disclose in any documents filed with this court that prior to filing its bankruptcy, it had represented to its auditors . . . that the diocese owned the funds now deposited” in the parish trust fund.
Attorneys for the diocese could not be reached for comment but court observers described Adler's action as a major one that could hasten a settlement.
The diocese has offered $95 million to settle roughly 150 cases involving men and women who say they were sexually abused as minors by priests and other church workers.
That amount is about half of what the Los Angeles archdiocese recently paid out to victims there.
“It's a very, very big deal,” said Venus Soltan, an Orange County attorney who represents 18 plaintiffs here.
“It is so unusual for a judge to consider this in this type of a bankruptcy.”
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