================================================================= CATHOLIC CHURCH BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2004 (ISSN XXXX-XXXX) July 7, 2004 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- CATHOLIC CHURCH BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in chapter 11 restructurings involving the Roman Catholic Church in the United States. New issues are prepared by Julie Anne G. Lopez, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of CATHOLIC CHURCH BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO CATHOLIC CHURCH BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF PORTLAND ARCHDIOCESE [00002] PORTLAND ARCHBISHOP'S LETTER ANNOUNCING CHAPTER 11 FILING [00003] ARCHDIOCESE OF PORTLAND CHAPTER 11 DATABASE [00004] LIST OF THE DEBTOR'S 20-LARGEST COMMERCIAL CREDITORS [00005] LIST OF THE DEBTOR'S 20-LARGEST TORT LITIGATION CREDITORS [00006] DEBTOR'S APPLICATION TO EMPLOY SUSSMAN SHANK AS COUNSEL [00007] DEBTOR'S APPLICATION TO EMPLOY SCHWABE AS SPECIAL COUNSEL [00008] ORGANIZATIONAL MEETING TO FORM OFFICIAL COMMITTEES KEY DATE CALENDAR ----------------- 07/06/04 Portland Archdiocese Chapter 11 Petition Date __/__/04 Organizational Meeting with UST to form Committees 07/21/04 Deadline for filing Schedules of Assets and Liabilities 07/21/04 Deadline for filing Statement of Financial Affairs 07/21/04 Deadline for filing Lists of Leases and Contracts 07/26/04 Deadline to provide Utilities with adequate assurance 09/04/04 Deadline to make decisions about lease dispositions 10/04/04 Deadline to remove actions pursuant to F.R.B.P. 9027 11/03/04 Expiration of Debtors' Exclusive Plan Proposal Period 01/02/05 Expiration of Debtors' Exclusive Solicitation Period 07/06/04 Deadline for Debtors' Commencement of Avoidance Actions First Meeting of Creditors pursuant to 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO CATHOLIC CHURCH BANKRUPTCY NEWS ----------------------------------------------------------------- CATHOLIC CHURCH BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. Coverage begins with the chapter 11 filing by the Archdiocese of Portland in Oregon and includes other Archdioceses if, as and when they seek chapter 11 protection. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the debtors' cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CATHOLIC CHURCH BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving CATHOLIC CHURCH BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 572 Fernwood Lane Fairless Hills, PA 19030 Telephone (215) 945-7000 Fax (215) 945-7001 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. Currently, we provide similar coverage about the restructuring proceedings involving Pegasus Satellite, RCN Corporation, Adelphia Communications and Adelphia Business Solutions, WorldCom, Global Crossing and Asia Global Crossing, Winstar, 360networks, Solutia, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Safety-Kleen, Laidlaw, Halliburton's DII Industries and Kellogg, Brown & Root units, Parmalat Finanziaria, S.p.A., Vlasic Foods, Air Canada, United Airlines, US Airways Group, ANC Rental, Mirant Corp., PG&E National Energy Group, Pacific Gas and Electric Company, Enron Corp., NRG Energy, Covanta Energy Corp., Bethlehem Steel, Weirton Steel, Kaiser Aluminum, WestPoint Stevens, Pillowtex, Burlington Industries, Fleming Companies, Kmart Corp., Ames Department Stores, Spiegel, Inc. (and its Eddie Bauer and Newport News subsidiaries), GenTek, Federal-Mogul, Hayes Lemmerz, Exide Technologies, National Century Financial Enterprises, Integrated Health Services, Mariner Post-Acute & Mariner Health, Reliance Group Holdings & Reliance Financial, The FINOVA Group, Inc., Loewen Group, and SK Global. ================================================================= [ ] YES! Please enter my personal subscription to CATHOLIC CHURCH BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) CATHOLIC CHURCH BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. Coverage begins with the chapter 11 filing by the Archdiocese of Portland in Oregon and includes other Archdioceses if, as and when they seek chapter 11 protection. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the debtors' cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CATHOLIC CHRUCH BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF PORTLAND ARCHDIOCESE ----------------------------------------------------------------- Roman Catholic Archbishop of Portland in Oregon, and successors, a corporation sole, aka Archdiocese of Portland in Oregon 2838 E. Burnside Street Portland, OR 97214 Telephone (503) 234-5334 Fax (503) 234-2545 http://www.archdpdx.org/ Catholic Information Network explains the structure of the Roman Catholic Church this way: Parishes: The lowest level of government in the Roman Catholic Church is the parish. A parish typically consists of a church, a school, and sometimes a convent. In charge of the parish is a priest. Larger parishes may have assistant priests. The priest has jurisdiction over the parishioner-members of his parish as their religious superior. It is his obligation to enforce the laws of the church, administer the sacraments, preach the word of God and, in short, carry out the Church's work within his parish. Dioceses: The next division of the Church's government is the diocese, consisting of a number of parishes under the jurisdiction of a Bishop. Dioceses are also territorial, and the size of the territory will depend on the density of the Catholic population. In the United States, a diocese may embrace an entire state. In New York City, there are two dioceses -- New York and Brooklyn. The Bishop stands in relation to the diocese much as the priest to the parish, his jurisdiction is more important, his powers broader, and his responsibility far greater. The See-City: The capital city of the diocese is called the see-city, where the see or throne of the Bishop is located. Here is the head church of the diocese, called the cathedral. Here, too, the Bishop maintains the various offices and departments of this ecclesiastical unit. He has what is called the chancery office with various assistants to maintain the acts of administration necessary in the diocese. Archdioceses: Some of the more important dioceses are called archdioceses. Ordinarily, there is no difference between an archdiocese and a diocese, but the Bishop of an archdiocese is also known as an Archbishop. To each archdiocese some of the surrounding dioceses are attached. The dioceses are then called suffragan sees, "subsidiary sees," while the archdiocese is the metropolitan see, the "capital see." In practice, this does not affect the government of each individual Bishop, who is wholly in charge of his own diocese. It means simply that certain administrative details are carried out between the metropolitan and the suffragan sees. The Holy See: The Pope is the chief Bishop of the Church. The central headquarters of the Church are in the ancient city of Rome, in a section known as Vatican City, which is independent of the Italian government and of every other government in the world. Within this city are the administrative offices of the universal Church. This administration is carried out through various offices which are known as congregations. There is a congregation for Seminaries and Universities, another for Religious Orders, another for the Sacraments, and so on. These congregations are made up of priests and other officials who serve as the actual central government of the Church as delegates of the Pope. Matters referring to their various departments are forwarded to them from the Bishops of the world. The Roman Catholic Church boasts of 700 million members and more than two thousand dioceses throughout the world. The Archdiocese of Portland in Oregon covers 29,717 square miles in western Oregon, from the summit of the Cascades to the Pacific Ocean. The Archdiocese traces its history to July 1834 when French Prairie settlers sent their petition for priests. The Archdiocese of Portland is a fraction of the larger Catholic Church in the United States. Statistical data provided by the Archdiocese of Portland shows these national and regional facts and figures for 2003-2004: Catholic Church Archdiocese In the Of Portland United States In Oregon --------------- ----------- Cardinals: 11 0 Archbishops: 49 1 Bishops: 377 1 Diocesan Priests: 29,715 149 Religious Priests: 14,772 178 Permanent Deacons: 14,106 30 Brothers: 5,568 86 Sisters: 74,698 506 Parishes: 19,484 124 Missions: 2,988 24 Diocesan Seminaries: 70 1 Religious Seminaries: 143 -- Seminarians: 4,522 28 Colleges & Universities: 237 2 Colleges & University Students 749,512 4,813 High Schools: 1,376 10 High School Students: 686,651 4,967 Elementary Schools: 7,142 42 Elementary School Students: 1,971,394 9,026 Religious Education High School Students: 767,739 4,415 Religious Education Elementary Students: 3,582,943 12,336 Priests Teaching: 1,596 53 Brothers Teaching: 1,021 19 Sisters Teaching: 7,389 48 Lay Teachers: 161,775 1,436 Hospitals: 585 9 Patients Assisted: 83,921,898 2,115,960 Infant Baptisms: 1,005,490 5,911 Adult Baptisms: 81,013 802 Received into Full Communion: 82,292 631 Marriages: 241,727 1,131 Deaths: 477,702 2,008 Total Catholics: 66,407,105 356,037 Total Population: 290,446,533 3,010,800 Catholic Percentage: 23% 11.8% The "Roman Catholic Archbishop of Portland in Oregon, and successors, a corporation sole," first appears in the records maintained by the Secretary of State for the State of Oregon on September 23, 1874 (Registry No. 004619-13) and is set-up as a non-profit corporation under the laws of the State of Oregon. A corporation sole is a legal structure that bases its existence on a series of individuals holding an ecclesiastical (or monarchial) position. A corporation aggregate, by way of contrast, is made up of a number of individuals. Section 65.067 Oregon Revised Statutes instructs that a corporation sole can do everything a corporation can do, but is not governed by a board of directors, need not have officers and is managed by a single director who is be the individual constituting the corporation and its incorporator or the successor of the incorporator. The Roman Catholic Archbishop of Portland in Oregon, and successors, a corporation sole, paid its annual registration fee to the Oregon Secretary of State on September 2, 2003, and is in good standing. The Most Reverend John G. Vlazny is the Archbishop of Portland in Oregon, and serves as the corporate entity's Registered Agent and president. To file the chapter 11 petition, the Archbishop says, he secured prior approval from the Archdiocesan Finance Council, the Archdiocesan College of Consultors and others. Dennis J. O'Donovan serves as Secretary for the corporation sole. ----------------------------------------------------------------- [00002] PORTLAND ARCHBISHOP'S LETTER ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Archdiocese of Portland in Oregon Office of the Archbishop July 6, 2004 Dear brothers and sisters in Christ, Today I am doing something I hoped I would never have to do. The Archdiocese of Portland in Oregon is filing for Chapter 11 reorganization in bankruptcy court. When I first mentioned this possibility, in February 2003, I promised that we would do our very best to avoid taking this step. We have worked hard to prevent it. At this point, circumstances beyond my control have created great financial risk. If I am to be a prudent steward of our resources, I believe that the best choice is to seek protection in bankruptcy. This step should allow the Archdiocese and our parishes and schools to operate in normal fashion while difficult financial issues are resolved. This is not an effort to avoid responsibility. It is, in fact, the only way I can assure that other claimants can be offered fair compensation. We have worked diligently to settle claims of clergy misconduct. In the last four years, we have settled more than 100 such claims. Last year alone the Archdiocese paid almost $21 million from its own funds. Major insurers have abandoned us and are not paying what they should on the claims. Two cases are set for trials beginning today. One plaintiff seeks more than $130 million in compensatory and punitive damages, the other $25 million. We have made every effort to settle these claims fairly but the demand of each of these plaintiffs remains in the millions. I am committed to just compensation. These demands go beyond compensation. With 60 other claims pending, I cannot in justice and prudence pay the demands of these two plaintiffs. There is always risk in going to trial. Attorneys for the plaintiffs claim that the assets of all the parishes and schools and of various trust funds holding charitable contributions are available to pay their clients. Under canon law, parish assets belong to the parish. I have no authority to seize parish property. I have assured you that this is something I would not do. Neither can I, nor would I, use other assets held in charitable trust. Seeking the protection of bankruptcy is a just and prudent course of action. This action offers the best possibility for the Archdiocese: to resolve fairly all pending claims, to manage a difficult financial situation and to preserve the ability of the Archdiocese to fulfill its mission. It will also allow us to continue our good works without fear of an impending large verdict. The operation of our parishes and schools will continue as usual. We encourage you to continue your contributions as in the past. Before I made this decision, I sought the advice of the Archdiocesan Finance Council (mostly lay financial advisors), the College of Consultors (who represent the clergy of the Archdiocese), my attorneys and various others. I listened carefully to what they said and concluded that the step I am taking will best ensure the financial stability necessary for the continuation of the good work of the Church in Western Oregon. Once more, I express my profound apologies to those who have been harmed by abuse and I renew my commitment to help you to heal. This decision will help me to do that. Sincerely yours in Christ, Most Reverend John G. Vlazny Archbishop of Portland ----------------------------------------------------------------- [00003] ARCHDIOCESE OF PORTLAND CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor: Roman Catholic Archbishop of Portland in Oregon, and successors, a corporation sole, aka Archdiocese of Portland in Oregon 2838 E. Burnside Street Portland, OR 97214 Telephone (503) 234-5334 Fax (503) 234-2545 Chapter 11 Petition Date: July 6, 2004 Bankruptcy Case No.: 04-37154 Bankruptcy Court: United States Bankruptcy Court District of Oregon 1001 SW 5th Ave., Seventh Floor Portland, OR 97204 Telephone (503) 326-2231 Bankruptcy Judge: The Honorable Elizabeth L. Perris Circuit: Ninth Debtor's Bankruptcy Counsel: Thomas W. Stilley, Esq. William N. Stiles, Esq. Sussman Shank LLP 1000 SW Broadway, Suite 1400 Portland, OR 92705-3089 Telephone (503) 227-1111 Fax (503) 248-0130 Debtor's Special Counsel: Thomas Dulcich, Esq. Margaret Hoffman, Esq. James Finn, Esq. Schwabe Williamson & Wyatt PC Pacwest Center, Suites 1600 - 1900 1211 S.W. Fifth Avenue Portland, OR 97204-3795 Telephone (503) 222-9981 Fax (503) 796-2900 U.S. Trustee: Pamela J. Griffith, Esq. Assistant U.S. Trustee for Region 18 620 SW Main Street, Suite 213 Portland, OR 97205-3026 Telephone (503) 326-4000 Fax (503) 326-7658 Estimated Number of Creditors: 50 to 99 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $25,000,000 to $50,000,000 Reported Gross Income in the tax year prior to the Petition Date: N/A ----------------------------------------------------------------- [00004] LIST OF THE DEBTOR'S 20-LARGEST COMMERCIAL CREDITORS ----------------------------------------------------------------- Creditor Claim Amount -------- ------------ Arthur J. Gallagher & Co. FIIC #42163 P.O. Box 6000 San Francisco, CA 94160 $46,050 Black and Indian Mission Office 2021 H Street NW Washington, DC 20006 $5,500 Bob Nagel Distributing P.O. Box 14427 Portland, OR 97293 $858 Catholic Sentinel P.O. Box 5087-19 Portland, OR 97208 $1,251 Department of Consumer & Busin P.O. Box 14610 Salem, OR 97309-0445 $5,000 Hahn and Associates, Inc. 434 NW 6th Avenue #203 Portland, OR 97209 $5,710 Holy Family Catholic Church 3732 SE Knapp Portland, OR 97202 $5,000 Key Bank of Oregon 1211 SW Fifth Avenue #400 Portland, OR 97204 $22,300,000 Mexican American Cultural Center P.O. Box 28185 3115 W. Ashby San Antonio, TX 78228 $4,034 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $1,070 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $925 Oregon Education Technology Consortium 8995 SW Miley Rd., #101 Wilsonville, OR 97070 $1,538 Oregon State University Conference Services 102 Buxton Hall Corvallis, OR 97331 $1,962 Our Lady of Sorrows Catholic Church 5221 SE Knight Portland, OR 97206 $3,000 Rev. Wayne Forbes 7007 SW 46th Avenue Portland, OR 97219 $2,000 Sacred Heart Catholic Church 2411 Fifth Street Tillamook, OR 97141 $3,000 St. John Fisher Catholic Church 7007 SW 46th Avenue Portland, OR 97219 $1,000 St. Joseph School 630 W. Stanton Street Roseburg, OR 97470 $10,000 State Department of Oregon-Employment 875 Union Street NE Salem, OR 97311-0100 $25,000 United Pipe & Supply Co. P.O. Box 66490 Portland, OR 97290 $1,623 ----------------------------------------------------------------- [00005] LIST OF THE DEBTOR'S 20-LARGEST TORT LITIGATION CREDITORS ----------------------------------------------------------------- Creditor Claim Amount -------- ------------ B M L c/o Bradley O. Baker, Esq. 15545 Village Park Ct. Lake Oswego, OR 97034 $10,100,000 B V c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 C B c/o William A. Barton, Esq. Barton & Strever PC 214 Coast Highway P.O. Box 870 Newport, OR 97365 $135,050,000 Charles Naylor c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Curtis Grecco c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 D S c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Douglas De Jong c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 Earl New c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 G M c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $10,800,000 Greg Farris c/o Gary A. Bisaccio, Esq. 2125 SW 4th Avenue, Suite 600 Portland, OR 97201 $20,025,000 J C M c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,100,000 J D c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $24,300,000 J Doe 12 c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $36,500,000 John Smith c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,100,000 K N c/o David L. Slader, Esq. 806 SW Broadway, Suite 400 Portland, OR 97205 $10,800,000 L D c/o J. William Savage, Esq. Rieke & Savage PC 620 SW Fifth Avenue, Suite 1125 Portland, OR 97204 $10,200,000 M F c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $9,200,000 M M c/o Kelly Clark, Esq. O'Donnell & Clark LLP 1706 NW Gisan St., Suite 6 Portland, OR 97209 $5,050,000 P C c/o Scott Beckstead, Esq. 1310 SW Corona Ct. P.O. Box 700 Waldport, OR 97394 $10,200,000 Rodney Kessler c/o Daniel J. Gatti, Esq. Gatti, Gatti, Maier, Krueger Sayer & Assoc. 1781 Liberty St. SE Salem, OR 97302 $7,000,000 ----------------------------------------------------------------- [00006] DEBTOR'S APPLICATION TO EMPLOY SUSSMAN SHANK AS COUNSEL ----------------------------------------------------------------- The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy Court for permission to employ the law firm of Sussman Shank, LLP, in Portland, Oregon, as its bankruptcy counsel. Archbishop John G. Vlazny tells the Bankruptcy Court that Sussman Shank is well qualified to represent the Archdiocese. The Firm will perform all of the services necessary and desirable to the conduct of the Debtor's chapter 11 case. Within the year prior to the Petition Date, Sussman received $37,638.06 from the Archdiocese. Additionally, the Archdiocese paid a $200,000 retainer to Sussman. Sussman Shank will bill for postpetition services at its customary hourly rates: Partners $200 to $315 Special Counsel $210 to $240 Associates $150 to $185 Paralegals $70 to $125 Legal Assistants $50 Thomas W. Stilley, Esq., assures the Court that he, his partners and his firm are disinterested within the meaning of Section 101(14) of the Bankruptcy Code as required under Section 327. Out of an abundance of caution, Mr. Stilley discloses that his firm has represented Oregon Catholic Press since February 2003 in employment related matters. OCP is not currently one of the Debtor's creditors. Mr. Stilley also discloses that the Archbishop (or his designee) serves on boards overseeing Catholic Charities, Oregon Catholic Press, St. Mary's Home, and Village Enterprises. ----------------------------------------------------------------- [00007] DEBTOR'S APPLICATION TO EMPLOY SCHWABE AS SPECIAL COUNSEL ----------------------------------------------------------------- The Archdiocese of Portland in Oregon is named in 45 separate litigation matters involving alleged sexual abuse by various priests. From a monetary standpoint, the plaintiffs' claims constitute the majority of claims in the Debtor's chapter 11 case. "Representation of the Debtor in connection with these matters requires special knowledge of these claims," Archbishop John G. Vlazny tells the Bankruptcy Court. By this application, the Debtor seeks Judge Perris' permission to employ Schwabe Williamson & Wyatt, PC, in Portland, Oregon, as special counsel in its chapter 11 case. "Schwabe is infinitely familiar with these matters having represented the Debtor as lead counsel in all prepetition litigation," Archbishop Vlazny says. Schwabe has also served as the Debtor's general corporate counsel for many years. The four attorneys who'll work on this matter and their corresponding hourly rates are: Thomas Dulcich, Esq. $235 Margaret Hoffman, Esq. $235 James Finn, Esq. $235 Mario J. Madden, Esq. $185 Within the 12 months immediately preceding the Petition Date, the Archdiocese paid Schwabe $1,113,296 for legal services. This amount includes a $100,000 retainer. Mr. Dulcich assures the Court that he, his partners and his firm are disinterested within the meaning of Section 101(14) of the Bankruptcy Code as required under Section 327. Out of an abundance of caution, Mr. Dulcich discloses that his firm has represented, and received in the past 18 months, $13,873 from Oregon Catholic Press, $415 from Catholic Charities, and $51,044 from an unnamed insurance carrier on behalf of Catholic Charities. ----------------------------------------------------------------- [00008] ORGANIZATIONAL MEETING TO FORM OFFICIAL COMMITTEES ----------------------------------------------------------------- The United States Trustee for Region 18 plans to convene a meeting of the Debtor's largest unsecured creditors next week in Portland, Oregon, for the purpose of forming one or more official committees of unsecured creditors in the Archdiocese's chapter 11 case. An official committee of commercial creditors and an official committee of tort claimants is a predictable result in the Archdiocese's case. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtor and other core parties-in-interest. If negotiations break down, an Official Committee may ask the Bankruptcy Court to replace management with an independent trustee. If an Official Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 case to a liquidation proceeding. This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. That meeting, required in all bankruptcy cases, will be held at a later date. A representative of the Debtor may attend the organizational meeting and provide background information regarding the cases, but not under oath. Contact Pamela J. Griffith, Esq., at (503) 326-4000 to obtain a statement of willingness to serve on a committee and for any additional information about this meeting. Ms. Griffith cautions that in Region 18, non-creditors and creditors holding small claims are not permitted to attend. Additionally, the U.S. Trustee in Region 18 does not permit professionals without clients to solicit Committee Members for work at the Organizational Meeting. Professionals, of course, are free to attend with their creditor-clients. *** End of Issue No. 1 ***