Diocese Settlement Plan Expected in February

By Olivier Uyttebrouck
Albuquerque Journal
January 20, 2016

http://www.abqjournal.com/708964/abqnewsseeker/diocese-settlement-plan-expected-in-february.html

Attorneys in the Diocese of Gallup bankruptcy case told a judge Tuesday that they plan to submit a proposed settlement plan in early February.

U.S. Bankruptcy Judge David T. Thuma said he hopes to schedule a confirmation hearing in April to finalize the settlement and resolve the 26-month-old case.

An attorney representing 57 alleged victims of sexual abuse said in a phone interview Tuesday that the settlement may include a release of church documents by the diocese.

Two members of the claimants’ committee are negotiating with the diocese about “nonmonetary” issues such as document disclosures and policy changes, said James Stang, a Los Angeles attorney who represents alleged victims.

The Diocese of Gallup in November 2013 became the ninth Roman Catholic diocese in the U.S. to file for Chapter 11 reorganization bankruptcy in response to lawsuits alleging sexual abuse of children by clergy.

Attorneys told Thuma that a proposed settlement plan was circulated last week to parties who participated in two-day mediation in December.

Susan Boswell, an attorney for the Diocese of Gallup, told Thuma that attorneys hope to file a settlement plan with the court by the first week of February. Stang called Boswell’s estimate “achievable.”

All funding sources and the amounts they provide will be identified in the settlement agreement, Stang said after the hearing.

Stang said a committee representing alleged victims is forming a trust fund and a plan for allocating money to claimants. A settlement also must pay for legal and professional fees that exceed $3.2 million in the two-year-old bankruptcy case.

Key funding sources include Catholic Mutual, which insured the diocese from 1970 to 1990, and the New Mexico Property and Casualty Guaranty Association, which inherited responsibility for insurance policies issued to the diocese from 1965 to 1977 by Home Insurance Co.