Spokane, Wash., Apr 25, 2006 / 12:00 am (CNA).- A federal bankruptcy judge has decided that the nearly $46-million settlement between the Roman Catholic Diocese of Spokane and sex abuse victims is legally unacceptable.

In a hearing Friday, Judge Patricia Williams said the deal cannot be approved because it favors one group of victims over another, reported the Associated Press.

“This settlement violates a rule that requires fair treatment,” Williams said, adding that bankruptcy “can’t treat people differently.”

The diocese filed for Chapter 11 bankruptcy protection in 2004 because of sex abuse claims and has offered to settle the claims of 75 victims for $45.7 million. More than 100 other claims have been filed since.

The diocese is reviewing “claims of proof” filed by claimants not covered by the so-called “universal settlement,” but no sum has been attached to their claims, reported the AP.

Williams stopped short of ruling against the settlement offer, but warned attorneys for both sides that she expected the matter to be settled quickly. A hearing is scheduled for May 15.

Shaun Cross, a lawyer for the Washington diocese, told the AP he is confident the settlement can be restructured.

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