Archdiocese of St. Paul and Minneapolis Adds Money to Compensate Victims of Priest Abuse, but Some Say It Still Falls Short

By Tory Cooney
Duluth News Tribune
November 15, 2016

http://www.duluthnewstribune.com/news/4160117-archdiocese-st-paul-and-minneapolis-adds-money-compensate-victims-priest-abuse-some-say

The Archdiocese of St. Paul and Minneapolis has filed an updated bankruptcy plan with more money for victims of clerical sexual abuse, but critics claim it doesn't go far enough.

The new plan would raise the proposed trust fund for claimants from $65 million to more than $130 million.

That could amount to nearly $300,000 for each of the 440 victims, archdiocese attorney Charlie Rogers said during a news conference Tuesday in St. Paul.

"Our goal all along has been to promote healing... to express our goodwill in action not words," Rogers said. "And I hope this is seen as...evidence (of that)."

Court filings indicate most of the new money is coming from settlements with additional insurance carriers. The original plan included settlements with three carriers worth over $33 million. The archdiocese has now reached settlements with 11 of its 13 insurance carrier groups totaling over $92 million. The archdiocese says it still hopes to get "many millions of dollars" from the two remaining carriers that have not settled.

Victims' attorney Jeff Anderson said the new plan lets the insurers off the hook too easily and that the archdiocese still isn't being transparent about its assets.

"This is a sham," Anderson said during his own news conference Tuesday in Minneapolis. "The archdiocese ... pledged to put the survivors first, but what they've done here, in this plan, is put the archdiocese first."

DIRECT CASH CONTRIBUTIONS

The archdiocese plan said that in addition to the $92.5 million from insurance carrier settlements, the fund for sex abuse claimants will include $11.8 million in direct cash contributions from the archdiocese, $5 million to $6 million from a general insurance fund in which parishes and other Catholic organizations participate as well as $13.7 million from parish insurers.

The fund also would receive about $280,000 from other archdiocese property including a ring worth an estimated $230,000 that "will be sold as soon as reasonably practicable."

Under the plan, the archdiocese will be contributing a total of $13.7 million in direct cash and other assets from the church, which it claims "represents all of the Archdiocese's available cash and assets that is not needed for its core missions or that otherwise cannot be contributed because such funds are subject to restrictive donative intent."

"That is 1 percent of their ability to pay," said Anderson, who has claimed that the archdiocese vastly under-reported its true ability to pay and sheltered funds.

In August, the survivors, as the Creditors' Committee in the Archdiocese of St. Paul and Minneapolis, submitted a plan that would require the archdiocese to pay $80 million out of pocket to victims instead of the $13.7 million it proposed.

Rogers said all of the archdiocese's assets have been brought forward.

OTHER SETTLEMENTS

The disclosure statement said the proposed trust fund for clerical sexual abuse victims is more than the amount in 90 percent of other diocesan bankruptcies that have been resolved through a Chapter 11 plan. In other bankruptcy settlements, similar funds ranged from $88 million in Portland Ore., to $9.8 million in Fairbanks, Alaska, according to archdiocese officials.

The $92 million settlement with the archdiocese insurance carriers "represents the largest reported insurance settlement in any diocesan or archdiocesan bankruptcy to date," according to the archdiocese.

Anderson said that the plan provides significantly less for victims than in California and Delaware archdioceses where the state opened the statues of limitations in clergy sex abuse cases, similarly to Minnesota.

THE NEXT STEP

The next step in the legal process is a hearing on the amended settlement plan, scheduled for Dec. 15, during which the judge will hear any complaints against the amendment, Rogers said.

After the hearing, creditors — including more than 400 victims of clergy sexual abuse as well as some vendors — will vote on the plan. A majority is required to approve it.

If the plan is not approved, according to the archdiocese statement, there might be only about $13.8 million in assets immediately available to abuse victims, with the prospect of years of legal wrangling and "millions of dollars in professional fees" to recover more money.

Anderson said there would not be protracted legal difficulties if the archdiocese were cooperative and paid more money than included in its current plan. The victims should be able to negotiate with the insurance companies directly and not through the archdiocese, he said.

"I would not recommend to any survivor that they allow themselves to be betrayed and deceived ... the way they were as children," Anderson said.

The disclosure statement included with the amended archdiocese plan also said the bankruptcy plan will establish an additional $500,000 counseling fund for victims of sexual abuse. The plan will still require the archdiocese to implement child-protection protocols approved by the Ramsey County attorney's office, Rogers said.