Basilica sale, Chase the Ace cash could be included in archdiocese insolvency

The iconic Basilica of St. John the Baptist could be sold off, as the Roman Catholic Episcopal Corporation of St. John's deals with insolvency. 

That's according to new court filings, which shed more light on how the corporation plans to address liabilities related to historic sexual abuse cases.

Proceedings moved to the courtroom Thursday, where a judge was asked to approve the pending sale of a monastery, and begin the process of figuring out the fate of millions raised through a Chase the Ace fundraiser more than four years ago.

According to a trustee's report, work is underway to formalize a sales strategy for land holdings in St. John's.

Nineteen church properties — including the basilica — are included on that initial list.

The corporation is proposing to put properties up for tender, the document advises, and intends to seek court approval of the final process.

Last month, the corporation filed for creditor protection.

In an affidavit filed at Newfoundland and Labrador Supreme Court this month, Archbishop Peter Hundt said it "has faced significant and costly legal challenges dealing with claims of sexual abuse and the refusal of certain insurers to respond to such claims over the past number of years."

In 2018, a judge found the archdiocese was not liable for abuse suffered by four boys at Mount Cashel orphanage in the 1940s and 1950s. 

But that decision was overturned two years later, with the appeal court deeming the Catholic Church vicariously liable for the abuse perpetrated by the Christian Brothers who ran Mount Cashel.

The Supreme Court of Canada declined to hear the case, finalizing that decision.

Last year, the four victims filed a judgment at the sheriff's office to enforce a payment of $2.4 million.

According to filings in the ongoing creditor protection proceeding, the archdiocese has since received claims from law firms in St. John's representing more than 100 men who are expected to seek more than $50 million.

The Roman Catholic Episcopal Corporation of St. John's has also been named as a co-defendant in a proposed class action filed in the Supreme Court of British Columbia.

Questions about Chase the Ace cash

The episcopal corporation is seeking direction from a judge on whether millions raised as part of a high-profile Chase the Ace fundraiser at St. Kevin's Parish will be made available to creditors.

That event became a summer sensation in 2017, with tens of thousands of people descending on the Goulds area of St. John's the night the winning card was turned over.

The card contest paid out millions in prizes and raised a $5.8-million bonanza for the parish.

• Making money moves: St. Kevin's Parish cashes in $5.8 million in Chase the Ace earnings
• Ace caught on 2nd draw as tens of thousands swarm Goulds for final night of lottery

Now there are questions about whether that windfall for the parish is an asset that can be divided among creditors or used during the restructuring process. 

According to court filings, St. Kevin's has taken the position that the funds must be used for purposes set out in its lottery licence application.

An independent arbitrator — retired former chief justice David Orsborn — agreed.

But his opinion isn't binding on other parties, like creditors, and the judge in the insolvency proceedings will be asked to sort it out.

The trustee believes the funds are an asset of the corporation, and should be available to be divided among creditors.

A hearing is scheduled for Feb. 28, for the judge to hear submissions on the Chase the Ace issue.

Proposals for property sales 

At Thursday's Supreme Court hearing, the episcopal corporation received approval for the sale of Mount St. Francis Monastery on Merrymeeting Road in St. John's, although lawyers for the creditors expressed disappointment with the purchase price.

Details of the transaction were sealed by Justice Garrett Handrigan. All parties had voiced support for that.

Plans are in the works to put other properties on the market, but it's possible they could ultimately remain affiliated with the church.

"The bishop, in consultation with select parishioners, is actively pursuing options that would allow the parishioners … to participate in the proposed tender process and or subsequent sales initiatives as a means to purchase select real properties through a competitive court supervised sales process," the trustee noted in its report.

"The parishioners are logical buyers for certain of the unique church properties identified subject to adequate fundraising initiatives being achieved."

The trustee notes that the full liquidation of real estate is anticipated to be through a mix of buyers.

Handrigan also issued an order allowing an extension of the timelines for the archdiocese to file a proposal under insolvency laws. It has been pushed back 45 days, to early March.

There are 34 parishes under the umbrella of the episcopal corporation. 

The parishes operate as separate unincorporated entities, and are each responsible for their own operations. But they are all subject to the direction and oversight of the archbishop.

In addition to the sexual abuse claims, Hundt's affidavit notes financial challenges linked to changing parishioner demographics and COVID-19 pandemic restrictions.

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