Archdiocese legal fees exceed $2.3M in bankruptcy

Church is seeking to reach settlement with 385 accusers in sexual abuse cases

A nearly 3-year-old bankruptcy case filed amid hundreds of child sexual abuse allegations has cost the Archdiocese of Santa Fe more than $2.3 million in legal fees alone.

Federal court records show the Roman Catholic institution has used the services of at least four law firms with expertise in cases involving clergy sexual abuse and bankruptcy. The archdiocese seeks to reach a settlement with 385 claimants in its December 2018 Chapter 11 filing with the U.S. Bankruptcy Court in Albuquerque.

This archdiocese and many dioceses across the nation, including the one in Gallup, have claimed bankruptcy in the Catholic Church scandal that began to receive attention in the early 1990s.

U.S. Bankruptcy Court records show the Albuquerque firm Walker & Associates this week billed the Archdiocese of Santa Fe $374,999 for work done over 13 months ending

in July. Including bills for two previous periods, Walker’s billings have totaled about $907,200.

Representatives from the firm didn’t respond to a phone call requesting comment.

Walker & Associates meticulously detailed its phone calls, meetings, projects, time spent and amount billed in a 165-page court document. Depending on which attorney or staffer worked on a matter, the firm’s fees ranged from $75 to $295 an hour.

The court reviews the charges and has final say on whether they are reasonable.

The lead attorney for the archdiocese, Idaho-based Ford Elsaesser, argued the fees are appropriate and necessary for lengthy, complex cases like these.

“And we wish it wouldn’t be this long, but there’s a large number of claims,” Elsaesser said.

“I’ve been involved in cases of this type beginning with the Diocese of Spokane in 2004,” he added. “I would suggest to you that the fees in this case are very much lower than in a number of them.”

Attorneys haven’t disclosed the amount of money needed to settle the sexual abuse claims, some of which date back decades. A federal judge wrote in a February ruling that more than $150 million could be involved, and that was only for a portion of the assets victims might receive.

The archdiocese hopes to gather enough money for a settlement through insurance, donations, the sale of properties and an auction of small, vacant parcels. It aims to avoid the sale of churches, schools, assembly halls and other properties it considers essential.

Elsaesser’s firm hasn’t submitted its bill yet for 2020-21, but its total from two previous periods was about $737,425.

Two other firms haven’t filed their bills this year, either. The Blank Rome firm, with offices around the country, submitted one in 2020, totaling $442,830. The Stelzner firm of Albuquerque submitted bills in the previous two years, totaling about $258,875.

Other professional fees the institution has incurred in the bankruptcy case involve real estate, surveying, accounting and appraising. It hired an auctioneer this year to conduct two online auctions of hundreds of small parcels from Sept. 21-28 and in November.

“The bankruptcy process is expensive, and this case has taken a long time,” said James Stang , a California attorney who represents some of the claimants who have alleged abuse by priests and other clergy. “The trade-off on time is hopefully a better result for survivors. … Our goal is to get the most money possible for survivors.”

The case is on its second mediator. The first was dismissed for not making adequate progress.

Insurance companies are expected to cover a large portion of the payouts, and Stang said attorneys are struggling with them.

But the archdiocese is “working on getting certain assets sold, which is good and we’re glad it’s finally happening,” he said.

Merit Bennett, a Santa Fe attorney who represents four victims, said all efforts now should be aimed at compensating those with claims.

“It’s not a quick fix, unfortunately. It never was,” Bennett said. “And money will never fix it totally.”

Elsaesser said there is less contention and litigation between the two sides at this point and that the property sales are evidence of progress. The goal, he said, is to achieve a resolution with the victims while the archdiocese, its schools and its parishes can move on.

“I have a good degree of optimism that we’re getting there,” he said.