This small Newfoundland parish has contributed millions to a Catholic insolvency

St. Kevin's Parish in the Goulds neighbourhood of St. John's has set the standard in recent years when it comes to fundraising. But most of that money one parishioner estimates the figure at $6 million has been seized or willingly passed over to an insolventCatholic episcopal corporation that's trying to compensate dozens of abuse victims.

No one in the parish is talking publicly because of a court sealing order, but CBC News has obtained a copy of a financial update that was circulated recently to parishioners. It paints a picture of how a parish once flush with cash swollen bya wildly successful lottery and land sales sawits bottom line change dramaticallyas the Catholic community on the Avalon and Burin peninsulas undergoesan unprecedented shakeup.

But like any insolvency, this is a complex story that involves much more than assetand liabilitynumbers on a statement.

St. Kevin's attracted a national spotlight in 2017 when a Chase the Ace lottery started attracting thousands of people each week, with the parish eventually banking $5.8 million. The parish donated $250,000 to the archdiocese, and the remainder was placed in an investment fund.

The parish also sold a large chunk of agricultural land that was acquired by the provincial governmentfor $1.2 million.

While the money was raised by the parish, it is ultimately owned and controlled just like all properties of the Roman Catholic Archdiocese of St. John's by the diocese's episcopal corporation, which was incorporated in 1897.

A year ago, meanwhile, the provincial Supreme Court granted bankruptcy protection to the episcopal corporation while it figured out a way to compensate more than 100 victims of abuse at the notorious Mount Cashel orphanage in St. John's, a figure that could reach $50 million.

As part of the insolvency, the corporationhas been selling off churches, parish halls, rectories and other properties a process that has so far raised nearly $35 million all over the Avalon and Burin peninsulas, including iconic structures like the Basilica of St. John the Baptist in St. John's.

The corporation also seized cash reserves from parishes, leaving each with a base amount of money for operating capital, a measure that forced several churches to close because they were no longer able to pay the bills.

And that $1.2 million earned from the sale of land by St. Kevin's Parish? Itwas also taken by the corporation.

Out-of-court settlement for chase the ace money

But the millions raised by Chase the Ace proved to be a more complicated matter, with an arbitrator ruling that the funds were not held in trust for the parish. However, retired justice DavidOrsborn also ruled that the money could only be used for purposes outlined on the lottery licence application, which did not include the payment of episcopal corporation liabilities for sexual assault claims.

Last winter, an out-of-court settlement was reached by the parish, episcopal corporationand the lawyers representing victims, allowing a portion of the Chase the Ace money to be used to help compensate victims, and for the parish to take ownership of St. Kevin's church, the parish hall and cemetery.

Details of that settlement remain sealed by a court order, but the financial statementreveals St. Kevin's Parishrecorded a loss of $5.6 million for the first nine months of this year, which is asignificant number for a parish that welcomes between 50 and 100 people to Saturday evening mass.

It's not clear how it all breaks down, but the loss includes the transfer of $1.1 million to a new holding company St. Kevin's Parish Inc. that was created to administer the parish's affairs.

So it appears more than $4 million of the Chase the Ace windfall will be used to fund the insolvency processand help pay abuse victims.

The parish also had a loss of $1.23 million in 2021, primarily becausethe episcopal corporation used the money from parish land sales for its operations.

Parish calls on faithful to help raise money

In a letter to parishioners, the finance committee wrote: "We are very grateful that we have been able to retain the church, cemetery and parish hall through the settlement agreement and without having to ask parishioners to fundraise to buy them fromthe [episcopal corporation]."

But instead of having millions in the bank, the newly formed parish has $1.1 million in cash that's been set aside for maintenance, and is now calling on parishioners to once again offer support through fundraising and donations.

The parish requires more than $300,000 annually to cover operations, according to the finance committee's letter.

"We ask that you be as generous as possible to help us keep our parish financially self-sufficient. Your ongoing support is essential."

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