$21 Million Settlement Announced in Diocese of Gallup Bankruptcy
By Olivier Uyttebrouck
March 21, 2016
Attorneys in the Diocese of Gallup Chapter 11 bankruptcy filed a reorganization plan today that contains cash contributions of $21 million from 11 funding sources to settle claims filed by 57 alleged victims of clerical sexual abuse.
The settlement also will be used to establish a trust to pay for future claims filed against the diocese.
And it will pay legal and professional costs in the 28-month-old case that have totaled more than $3.5 million. The two primary law firms in the case have agreed to a $416,000 reduction in fees, the lead attorney for the diocese, Susan Boswell of Phoenix, told a judge on Monday.
Boswell outlined major features of the reorganization plan for U.S. Bankruptcy Judge David T. Thuma of Albuquerque at a hearing this morning.
The reorganization plan and other details of the settlement agreement will be considered by Thuma at a hearing scheduled next month. The plan also must be approved by members of a committee representing claimants in the case.
James Stang, a Los Angles attorney representing the claimants’ committee, said “non-monetary” terms of the settlement remain under negotiation. Those terms often include issues such as records disclosures, apologies, and diocesan policies to protect children.