Judge Sets May Deadline for Diocese of Duluth Abuse Claims

By Tom Olsen
Duluth News Tribune
January 7, 2016

http://www.duluthnewstribune.com/news/3919228-judge-sets-may-deadline-diocese-duluth-abuse-claims

Judge.jpg Judge Robert Kressel has set a May 25 deadline for victims of child sexual abuse by priests to file claims against the Diocese of Duluth in U.S. Bankruptcy court. (Steve Kuchera / skuchera@duluthnews.com)

Judge has set a May 25 deadline for victims of child sexual abuse by priests to file claims against the Diocese of Duluth in U.S. Bankruptcy court.

Judge Robert Kressel set the deadline, also known as a “bar date,” after a hearing Thursday morning in Minneapolis. The deadline gives victims the full benefit of the Minnesota Child Victims Act, which is set to expire the same day.

Kressel’s order allows victims to file claims anonymously. It also requires the diocese to reach out to potential victims and provide notice through regional and national media and other means.

The diocese filed for Chapter 11 bankruptcy protection last month after being hit with a $4.9 million verdict in the first case to go to trial under the Child Victims Act.

“Today's order helps the Diocese of Duluth fulfill its commitment to address all claims of sexual abuse by clergy,” said Kyle Eller, a spokesman for the diocese. “The goal is to help ensure that anyone with a claim can be addressed fairly in the bankruptcy process.”

The May 25 deadline was also supported by victims’ attorneys, who said it made sense to match the date set by the Legislature.

When the diocese filed for bankruptcy on Dec. 7, it reported six lawsuits and 12 additional claims stemming from abuse allegations. Attorneys, however, predicted that number would swell ahead of the filing deadline. The Archdiocese of St. Paul and Minneapolis, for instance, ended up with more than 400 claims in its ongoing bankruptcy case.

In subsequent filings, the Duluth diocese has reported $5.42 million in assets — mostly in properties. Its liabilities are listed at $4.98 million, but that figure does not take into account the dozens of additional victims expected to seek damages. The diocese has an annual operating budget of approximately $3.3 million.

The interests of victims will be represented by a three-person creditors’ committee appointed last week by the U.S. Trustee’s Office. The committee is chaired by Bill Weis, the plaintiff who received the $4.9 million award from a St. Paul jury in November.

Mike Finnegan, an attorney who represents dozens of victims through St. Paul law firm Jeff Anderson and Associates, said he is encouraged by the order that allows claimants to come forward confidentially. But he noted that time is running out.

“One of the big challenges for survivors is that first disclosure,” he said Thursday. “Most of them are suffering in silence. That’s why it’s so important to get the word out.”

Attorneys on both sides have expressed a willingness to reach a settlement through mediation. Finnegan said the parties have mutually agreed to work with with Gregg Zive, a U.S. bankruptcy judge in Nevada who has experience in diocesan bankruptcies, subject to court approval.

Settlements have been reached in all 14 previous diocese and religious order bankruptcies in the United States.

The diocese is due back in court in Duluth on Feb. 5 for what is known as a “341 meeting.” At the hearing, representatives are expected to testify under oath about the diocese’s finances.