Bankruptcy Judge Confirms Milwaukee Archdiocese Reorganization Plan
By Bruce Vielmetti
U.S. Bankruptcy Judge Susan V. Kelley on Monday confirmed the Archdiocese of Milwaukee reorganization plan, marking a milestone in the longest-running and most contentious of the 14 Catholic Church bankruptcies filed since 2004 to address sexual abuse liabilities going back decades. "I hope a page can be turned," Kelley said at the end of the approximately two-hour hearing, "that there will be some peace for survivors and the archdiocese can go back to its important ministries." There was no sense of celebration among the many parties packing the courtroom — more a sense of relief, resignation and some bitterness that the proceedings were over, more than four years after the archdiocese filed for protection and three months after the outline of the plan was announced. The bankruptcy plan will pay about $21 million to survivors — of which their own lawyers will take a share — and set up a $500,000 fund for continued therapy. An additional $8 million will pay the archdiocese's legal fees plus those of the creditors' committee. That's on top of about $12 million already paid out. Two dozen attorneys appeared before Kelley on Monday. On the other side of the deal, the archdiocese, its parishes, schools and other institutions all get released from liability for future lawsuits relating to sexual abuse claims that were, or could have been, part of the Chapter 11 case. The archdiocese will emerge with $7 million of debt, according to Archbishop Jerome Listecki. Settlement money comes from various insurers that bought back their policies for about $11 million in return for being released from liability for any sex abuse claims. A trust fund established to care for Catholic cemeteries — the subject of fierce litigation within the case — is contributing $16 million. The balance will come from various other archdiocesan and parish funded resources, such as a continuing education fund for priests. Listecki attended Monday's hearing, and his lawyers asked if he could make a statement. He offered his thanks and admiration to Kelley and the lawyers who worked on the reorganization before recognizing the role of the many abuse survivors present.
"Again, I apologize to the victims and their families for what they've endured under clergy who executed criminal and immoral behavior toward them," he said, adding that their courage in coming forward raised the consciousness of the archdiocese. He said he hoped the end of the bankruptcy marked a turning point in the archdiocese's history and will allow it to refocus attention on more traditional missions. Formally, there were few objections to the details of the plan, but survivors in attendance generally opposed it in concept. Kevin Schultz told Kelley it was wrong to send victims 500 pages of legal documents and give them three days to decide whether to back the plan. Another man, a survivor who wouldn't give his name, called Listecki an apostate and said that if he really wants forgiveness, he should kneel, repent and beg for it. 575 claims of abuse Ultimately, 575 people made claims for sexual abuse suffered as children. The plan put them in different classes. More than 120 were disallowed because the claimants had reached an earlier settlement, the allegations didn't involve sexual abuse, or the perpetrator was not a priest or member of a religious order or layperson working for a Catholic entity. One hundred and four people abused by a priest not on a list of known abusers, or by someone working for some group that was not a Catholic entity, can get $2,000 payments. About 350 will get payouts determined by a mediator. If the remaining money were distributed evenly, they would each get about $58,500. Abuse survivors in the other Catholic bankruptcies have gotten an average of $300,000, according to advocates. One survivor, Charles Linneman, who chaired the creditors committee, doesn't expect there will be many takers on the therapy option. "Anyone inclined to that has probably already tried that," he said after the hearing, adding that many won't trust the therapy because "the archdiocese controls it." Though the general outlines of the reorganization plan were announced in August, lawyers were addressing details and filing hundreds of pages of documents right up through the weekend. After the hearing, several people who were abused as children at St. John's School for the Deaf by the Rev. Laurence Murphy held a news conference outside the federal courthouse. They had given Listecki a letter inviting him to join them in a meeting they hope to arrange with Pope Francis. Peter Isely, a spokesman for SNAP, Survivors Network of those Abused by Priests, deplored the fact that despite the lengthy bankruptcy proceeding, the victims' written claims remain under seal. He questioned whether 100 offenders newly named in those claims have been investigated, removed from ministry or referred to law enforcement. "You can see why we're alarmed," Isely said.
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