Sussman Shank's Non-profit Religious Organizations Practice Group has represented various religious organizations including a Catholic religious order and an Archdiocese. We have advised religious organizations on insolvency-related issues that arise before, during, and after a chapter 11 filing, and have advised other clients that have not filed chapter 11. We have significant experience in understanding religious organizations' special needs and requirements when we address the variety of legal issues they face.
The firm's practice group, headed by partners Tom Stilley and Howard Levine, represented the Archdiocese of Portland in Oregon and the Society of Jesus, Oregon Province, the first Archdiocese and the first Catholic religious order to file chapter 11 in the United States. In both of these cases, the firm helped successfully resolve hundreds of tort claims, assisted in recovering funds from insurance carriers that were used to pay claims, confirmed their respective chapter 11 reorganization plans, and restructured their operations consistent with their reorganization plans and governing religious law.
In the Archdiocese of Portland case, the firm successfully litigated restrictions on charitable trust assets and the ability of bankruptcy courts to estimate personal injury tort claims, as part of a reorganization strategy that ultimately resulted in settlements with known tort claimants and the funding of a future claims trust. That same model has been followed in subsequent chapter 11 cases filed by religious organizations in other states.
Archdiocese of Portland in Oregon
We served as lead counsel to the Archdiocese of Portland in the first Chapter 11 bankruptcy case filed by a Roman Catholic diocese in the United States. We developed and implemented a strategy that considered the interplay of First Amendment religious rights, charitable trust, and bankruptcy law in proposing and confirming a reorganization plan that resulted in the settlement and payment of over 250 known clergy sex abuse claims, provided a trust for the liquidation and payment of future abuse claims, and preserved the assets and operations of 124 parishes and three Catholic high schools.
Cottage Grove Community Hospital
We represented an ad hoc committee of community leaders in this Chapter 11 case, whose goal was to ensure that the citizens of Cottage Grove, Oregon, did not lose local access to emergency and acute medical care. Our involvement in the case ensured that the community's concerns were met, ultimately resulting in Peace Health, a major health care provider organization, agreeing to erect a new community medical center to address the citizens needs.
Society of Jesus, Oregon Province
This was the first Chapter 11 bankruptcy case filed by one of the provinces of a Roman Catholic religious order in the United States. Relying on our experience from the Archdiocese of Portland case, and facing new issues relevant only to a religious order, we were able to implement a strategy for resolving and paying over 500 clergy sex abuse claims through the use of insurance coverage and other assets. This resulted in a plan that was overwhelmingly accepted by all creditors, which included $119 million in contributions from the debtor's insurers and allowed the province to continue its mission throughout Alaska, Idaho, Montana, Oregon, and Washington.