Bishop Gerald Kicanas of Tucson must decide whether to file Chapter 11 bankruptcy for the diocese by the end of the month, before a series of potentially expensive lawsuits are scheduled begin sitting before a court.
The $14-million settlement, which the diocese had reached with 10 men who said they were abused by four clergy in 2002, has left the diocese "financially strapped," the bishop said in his weekly letter to the faithful last week.
"I have said many times that settlement is my hope, interest, preference and desire, but I cannot and will not put the diocese into an even worse position than we are in now," said Bishop Kicanas, who only arrived as the new bishop of Tucson after the 2002 settlement.
"As the steward of our diocese and for the good of our parishes, I cannot agree to a settlement that would strip the diocese of everything, especially because we believe it is very likely that more cases could be filed and that more victims could come forward seeking counseling assistance," Bishop Kicanas wrote.
Though it might delay the cases to be heard Sept. 29, bankruptcy would allow the diocese to continue operating. It would also ensure that all claims - current and future - are treated equally.
However, the diocese may choose to abandon the settlement and bankruptcy avenues altogether and risk going to trial.
One of the 21 civil lawsuits pending against the diocese and scheduled to go to court Sept. 29 was filed by Anita Rodriguez, her husband and three of her sons for abuse allegedly committed by Fr. Juan Guillen, reported the Arizona Daily Star.
In August 2002, the priest was arrested on 12 felony charges of sexually abuse and sent to prison after pleading guilty to the attempted molestation of two boys, including one of Rodriguez's sons.
Bishop Kicanas has written a letter to the Rodriguez family and has publicly apologized for past abuse by the diocese's priests.
Rodriguez's attorneys have been trying to reach a settlement with the diocese, though nothing has been settled yet.
The diocese is in the process of permanently removing Guillen from the priesthood and has put his name on a public list of 28 priests who have served since 1950 and who have "credible" allegations of sexually abusing children against them.