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What Will Happen if the Boston Archdiocese Declares Bankruptcy?
Aired December 02, 2002 - 11:04 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Kendal Coffey is a legal analyst and frequent contributor to CNN. He joins us now here in Atlanta. Nice to see you for once face to face.
When you heard this news here, did this make sense to you at all considering what Bill jst said about the fact if this does happen, almost no one will be happy about it and the church will have to open its books?
KENDAL COFFEY, CNN LEGAL ANALYST: It's a risky thing for everyone. It's like sitting at a negotiating table and putting a hand grenade out on the table, not pulling the pin yet but telling everybody that if we can't make a deal on something that I like, we may have an explosion here that's mutually destructive for everyone.
I think at this point it ought to be seen as part negotiating strategy and part trial Balloon. The church has left itself plenty of outs as to whether bankruptcy will actually be filed.
HARRIS: If bankruptcy is filed when happens then? Is the Boston Archdiocese saying it can't afford to pay any real settlements and therefore would (UNINTELLIGIBLE) perhaps the Vatican have to step up and actually make good on any settlement reached?
COFFEY: From the standpoint of the Archdiocese of Boston, they would have in a sense a more defined process. There would be a cutoff for claims, there would be a single class of claims -- of creditors to negotiate with. That's better for them.
On the other hand it it doesn't eliminate the ability of people to sue the church and Vatican nor does it eliminate the ability of people to proceed against individuals such as Cardinal Law.
And that filing abnkruptcy does is it can take control away from the church from its own destiny. They wouldn't be just reporting to the Vatican anymore, they would be reporting to a U.S. bankruptcy judge.
HARRIS: Is there any kind of precedent for that?
COFFEY: Nothing of a church of this magnitude has happened before. And certainly from their standpoint, the scope of this litigation that they're confront is unprecedented. The anology that some people have looked to, for example cases in asbestos scenarios where there were so many victims of asbestos litigation, that some of the companies had to file bankruptcy in order to deal with the numerous cases on a class basis.
HARRIS: Considering that as a model here, what happens with victims who as we heard in this piece, victims who still want their stories told or at least want them investigated here? Does this sort of thing come to a stop if the bankruptcy goes through?
COFFEY: Temporarily, yes, and certainly there's going to be a panic among the victims because most people hear they're diagnose to get five, ten cents on the dollar in bankruptcy. That's the popular belief.
But the truth is that potentially all of the assets of the church in Boston could be exposed, that could be as much as 1.3 billion which could be enough to pay the claims. And individuals will still have some process for having their individual rights heard even in a bankruptcy court.
HARRIS: So if you're a betting man, would you bet this would go through or not?
COFFEY: My bet is no bankruptcy but a lot more, even harder nosed negotiations than ever before.
HARRIS: It sounds like that's already started. Kendall Coffey, good to see you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Bankruptcy?>
Aired December 2, 2002 - 11:04 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Kendal Coffey is a legal analyst and frequent contributor to CNN. He joins us now here in Atlanta. Nice to see you for once face to face.
When you heard this news here, did this make sense to you at all considering what Bill jst said about the fact if this does happen, almost no one will be happy about it and the church will have to open its books?
KENDAL COFFEY, CNN LEGAL ANALYST: It's a risky thing for everyone. It's like sitting at a negotiating table and putting a hand grenade out on the table, not pulling the pin yet but telling everybody that if we can't make a deal on something that I like, we may have an explosion here that's mutually destructive for everyone.
I think at this point it ought to be seen as part negotiating strategy and part trial Balloon. The church has left itself plenty of outs as to whether bankruptcy will actually be filed.
HARRIS: If bankruptcy is filed when happens then? Is the Boston Archdiocese saying it can't afford to pay any real settlements and therefore would (UNINTELLIGIBLE) perhaps the Vatican have to step up and actually make good on any settlement reached?
COFFEY: From the standpoint of the Archdiocese of Boston, they would have in a sense a more defined process. There would be a cutoff for claims, there would be a single class of claims -- of creditors to negotiate with. That's better for them.
On the other hand it it doesn't eliminate the ability of people to sue the church and Vatican nor does it eliminate the ability of people to proceed against individuals such as Cardinal Law.
And that filing abnkruptcy does is it can take control away from the church from its own destiny. They wouldn't be just reporting to the Vatican anymore, they would be reporting to a U.S. bankruptcy judge.
HARRIS: Is there any kind of precedent for that?
COFFEY: Nothing of a church of this magnitude has happened before. And certainly from their standpoint, the scope of this litigation that they're confront is unprecedented. The anology that some people have looked to, for example cases in asbestos scenarios where there were so many victims of asbestos litigation, that some of the companies had to file bankruptcy in order to deal with the numerous cases on a class basis.
HARRIS: Considering that as a model here, what happens with victims who as we heard in this piece, victims who still want their stories told or at least want them investigated here? Does this sort of thing come to a stop if the bankruptcy goes through?
COFFEY: Temporarily, yes, and certainly there's going to be a panic among the victims because most people hear they're diagnose to get five, ten cents on the dollar in bankruptcy. That's the popular belief.
But the truth is that potentially all of the assets of the church in Boston could be exposed, that could be as much as 1.3 billion which could be enough to pay the claims. And individuals will still have some process for having their individual rights heard even in a bankruptcy court.
HARRIS: So if you're a betting man, would you bet this would go through or not?
COFFEY: My bet is no bankruptcy but a lot more, even harder nosed negotiations than ever before.
HARRIS: It sounds like that's already started. Kendall Coffey, good to see you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Bankruptcy?>