Chapter 11, Verse 1

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--THE SURPRISE NON--STICKING POINT? Though the very idea of a court controlling church finances seems to raise church-state issues, the judge will strive to avoid disrupting the diocese's worship life. If schools or parishes are sold to meet creditors' demands, it will be by Vlazny's choice, not hers. Since bankruptcy is voluntary, many experts feel an archbishop entering it can hardly complain of government intrusion.

--WILL OTHERS FOLLOW SUIT? Mark Chopko, general counsel for the U.S. Conference of Catholic Bishops, calls the bankruptcy an "act of desperation," though one a "handful" of dioceses might consider. They might be wise to hang back awhile. True, Portland may rationalize its debt, keep discussion of its sins to a relative minimum and set a limit on future claims against old offenses--in other words, extract itself from the nightmare still facing other dioceses. But the hearings could also become high theater, the diocese's fiscal and administrative exposure could breed further investigation, and a loss on the parish-assets issue could establish a cataclysmic precedent for the church. In Rome, the Unconsulted are venting their displeasure. "Someone in Portland," sniped a high-ranking official, "got some bad legal advice." Someone in Portland is praying that is wrong. --With reporting by Jeff Israely/Vatican City and Sean Scully/Los Angeles