FAIRBANKS -- The Fairbanks Catholic Diocese has filed a reorganization plan with the U.S. Federal Bankruptcy Court.

The filing Tuesday comes 13 months after the diocese declared Chapter 11 bankruptcy.

The plan calls for the diocese to mortgage or sell church properties and commit to fundraising and donor appeals to establish a fund to be used primarily for paying the claims of victims of sexual abuse.

"This is just the first step that we feel we can come up with," said Robert Hannon, diocesan chancellor. "We project we can offer claimants more than $8.6 million."

Hannon said the projected insurance coverage is estimated at more than $20 million.

The diocese filed for reorganization in March 2008 after it failed to settle with 140 people alleging sexual abuse by clergy or others associated with the diocese, formally known as the Catholic Bishop of Northern Alaska.

The number of people claiming abuse has more than doubled to about 300 since then.

"We are looking forward towards reconciliation and healing," Bishop Donald Kettler said in a statement. "We recognize the process will continue and the claimants will offer suggestions as we meet in mediation next month. Yet, I remain hopeful that we are on the road to closing one chapter on a sad part of our past."

Ronnie Rosenberg, litigation coordinator for the diocese, said a successful mediation is in the best interest of the victims.

"The more time this goes on, the less money we have," she said. "To pursue litigation and appeals is extremely costly, and we are not a wealthy diocese."

If accepted by the court, the reorganization plan would allow, among other measures, the diocese to mortgage the $1.1 million chancery, which houses its main offices, and the Kobuk Center, which serves as a conference center and residence for the bishop and priests. The Catholic Order of Foresters, a benevolent fraternal organization, would be the mortgage holder.

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