This small Newfoundland parish has contributed millions to a Catholic insolvency

St. Kevin’s Parish in the Goulds area of ​​St. John’s has set the standard when it comes to fundraising in recent years. But most of that money — one parishioner put the figure at $6 million — was confiscated or willingly given to a bankrupt Catholic Episcopal body trying to compensate dozens of abuse victims.

No one in the community is speaking publicly about a court sealing order, but CBC News has received a copy of a financial update recently distributed to community members. It paints a picture of how a community once awash with cash – swollen by a hugely successful lottery and land sales – how its bottom line changed dramatically as the Catholic community on the Avalon and Burin peninsulas experienced an unprecedented upheaval.

But like any bankruptcy, this is a complex story that involves much more than asset and liability numbers on a bank statement.

St. Kevin’s garnered a national spotlight in 2017 when a Chase the Ace lottery began drawing thousands of people each week, with the community eventually raking in $5.8 million. The parish donated $250,000 to the archdiocese, with the remainder being invested in a mutual fund.

The community also sold a large tract of agricultural land purchased by the provincial government for $1.2 million.

While the money was raised by the congregation, it is ultimately owned and controlled by the Episcopal Body of the Diocese, established in 1897, as are all properties of the Roman Catholic Archdiocese of St. John’s.

A year ago, the provincial Supreme Court granted the episcopal body bankruptcy protection while it found a way to compensate more than 100 abuse victims at the notorious Mount Cashel Orphanage in St. John’s, a figure that could reach $50 million.

As part of the bankruptcy, the company sold churches, vicarages, vicarages and other properties — a process that has raised nearly $35 million so far — on the Avalon and Burin peninsulas, including iconic structures like the Basilica of St. John the Baptist in St .John’s.

The company also confiscated cash reserves from congregations, leaving each a basic amount as working capital, a move that forced several churches to close because they could no longer pay the bills.

And that $1.2 million made from the sale of land by St. Kevin’s Parish? It was also adopted by society.

Out of court settlement for Chase the Ace Money

But the millions raised by Chase the Ace proved to be a more complicated matter as an arbitrator ruled the funds were not held in escrow for the community. However, retired Judge David Orsborn also ruled that the money could be used only for the purposes described in the lottery license application, which did not include paying liabilities of the episcopal body for sexual assault claims.

Last winter, the congregation, the episcopal body, and the attorneys representing the victims reached an out-of-court settlement that allowed the congregation to use a portion of Chase the Ace’s money to compensate victims and the congregation to retain ownership of St Kevin’s Church, Parish Hall and Cemetery.

Details of that settlement remain sealed by a court order, but the financial statements show that St. Kevin’s Parish posted a loss of $5.6 million for the first nine months of this year, a significant number for a parish between 50 and 100 people for Saturday evening mass.

It’s not clear how everything collapses, but the loss involves the transfer of $1.1 million to a new holding company — St. Kevin’s Parish Inc. — formed to manage the parish’s affairs.

So it looks like more than $4 million of Chase the Ace’s profits will be used to fund bankruptcy proceedings and pay abuse victims.

The congregation also had a $1.23 million loss in 2021, largely because the episcopal body used the money from the sale of congregational land for its operations.

Church calls on believers to help fundraise

In a letter to parishioners, the finance committee wrote: “We are very grateful that we were able to preserve the church, cemetery and meetinghouse through the settlement agreement and without having to ask parishioners for donations to purchase them from the parish [episcopal corporation].”

But instead of having millions in the bank, the newly formed church has $1.1 million in cash set aside for upkeep and is now calling on church members to offer renewed support through fundraising and donations.

According to the Finance Committee letter, the community needs more than $300,000 annually to support operations.

“We ask that you be as generous as you can to help us keep our community financially self-sufficient. Your continued support is essential.”

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