11:25 AM MST on Thursday, July 1, 2004

By Stephanie Innes / Arizona Daily Star

During the last 13 months, the Roman Catholic Diocese of Tucson, which is considering filing for Chapter 11 bankruptcy protection, has sold or transferred assets reportedly worth $5 million - primarily to other Catholic corporations.

Attorneys representing plaintiffs in pending civil actions against the diocese are concerned the diocese is shifting its assets to affiliated Catholic entities to avoid compensating victims of sexual abuse by local clergy. Another result of shifting assets to other Catholic groups is that on paper the diocese will appear to have less wealth than it really has, the lawyers say.

The diocese says its transactions from the past year were in good faith and part of regular church business.

Last month, Diocese of Tucson Bishop Gerald F. Kicanas wrote a letter to parishioners saying that filing for Chapter 11 bankruptcy protection "now appears to be the only option" for the diocese, which serves about 350,000 Catholics in nine counties and has already paid out an estimated $16 million in settlement costs related to priests abusing children.

The largest sale, of the East Side Regina Cleri Center for $3 million, according to diocese officials was done to square up debts related to the multimillion-dollar payout in 2002 to 10 men who said they were abused by four members of the local clergy. To suggest otherwise is an "outrageous misrepresentation of the facts," diocese spokesman Fred Allison said Wednesday.

Tucson attorneys Kim E. Williamson and co-counsel Lynne M. Cadigan on Wednesday filed a motion in Yuma County Superior Court asking for a hearing about the legality of the recent asset sales and transfers, citing the state's Uniform Fraudulent Transfer Act, which protects creditors trying to collect debts.

"This looks highly suspicious given the timing. Where is the cash? We're seeing key assets being moved to corporations affiliated and controlled by the diocese and we're not seeing a sign that the terms of the transfer are really fair," Williamson said.

"At the same time that the diocese is saying, 'We are poor, we need to file bankruptcy, continue our court cases,' there are land transfers going on, and the transfers are going to associated diocese entities."

The motion was filed in connection with a lawsuit filed by three young men who say they were abused by the Rev. Juan Guillen, a now-suspended diocesan priest from Yuma who is serving 10 years in state prison for sexual abuse of a minor.

The lawyers cite five asset transactions involving the diocese within the last 13 months:

● The June 9 sale of Regina Cleri Center, 8800 E. 22nd St., to the new St. Augustine Catholic High School for $3 million, according to documents filed with the Pima County Recorder's Office. The school began operations last August.

● On May 27 the diocese transferred a deed to a local Catholic entity called De Porres Inc., a nonprofit corporation that feeds the homeless. The diocese says the transaction involved no property or money. Officials say the diocese helped De Porres get started in 1998 and acted as a partner in its operations but this year decided to give up its partnership and allow De Porres to assume full control.

● On May 13 the diocese sold the St. Nicholas Center, 349 W. 31st St., to a private local family on behalf of Blessed Kateri Tekakwitha Catholic Church, 507 W. 29th St., which owned the center, for $145,000. Officials say money from the sale of St. Nicholas neighborhood center, which had been on the market for a year, will go to Blessed Kateri's religious education fund for Pascua Yaqui tribal members' children.

● On March 1 the diocese sold property on behalf of St. Monica's Catholic Church, 212 W. Medina Road, valued at $255,000 to the San Miguel of Tucson Corp., which oversees the new San Miguel Catholic High School that's scheduled to open in August. The money from the sale will go into the St. Monica's parish building fund, according to the diocese.

● On June 30, 2003, the diocese sold its Downtown headquarters at 111 S. Church Ave. to the separately incorporated Catholic Foundation for the Diocese of Tucson for $1.65 million to secure debts from the 2002 settlement.

Diocesan property director John Shaheen said he is surprised that Cadigan and Wil-liamson would question the sale of the East Side Regina Cleri Center, since the proceeds are going toward paying off the 2002 settlement to men those attorneys represented. The other sales are all part of regular church business, he stressed.

"We are performing the mission of the church. That is our only intent," Shaheen said. "We are feeding the poor, helping the homeless, trying to educate our students."

Since reaching the out-of-court settlement in 2002, the diocese has faced 19 new civil actions over alleged sexual abuse. Three of the lawsuits were recently dismissed and the other 16 are pending.

One case, involving a Phoenix man who says he was abused by Monsignor Robert C. Trupia, a suspended diocesan priest, had been scheduled to go to trial this week in Tucson. But the case was continued to October after the diocese argued that it was making plans to file for Chapter 11 bankruptcy protection.

For more Arizona news, visit www.azstarnet.com or www.azfamily.com.

©The Arizona Daily Star, 2004