Archdiocese bankruptcy costs so far: nearly $16 million — in legal fees alone

By Sarah Horner
Pioneer Press
September 18, 2017

http://www.twincities.com/2017/09/18/st-paul-archdiocese-minneapolis-bankruptcy-priest-sexual-abuse/

Attorney Jeff Anderson fields a question from the media during a news conference in St. Paul on Tuesday, May 9, 2017. His client, Ron Vasek, right, says he was sexually abused at the hands of The Rev. Roger Grundhaus during a trip to Ohio in 1971, when Vasek was 16. Photo by Robb Jeffries

More than two and a half years after the Archdiocese of St. Paul and Minneapolis filed for bankruptcy following a torrent of sexual abuse claims made against its clergy, the legal costs are mounting into the tens of millions.

Details on the compensation earned to date by law firms representing parties involved in the bankruptcy proceedings were revealed Friday after the federal judge overseeing the case ordered the disclosures.

U.S. Bankruptcy Judge Robert Kressel requested financial information on the amounts owed through the end of August to lawyers representing the archdiocese, the committee of parishes and the creditors, including sexual-abuse survivors, which make up the largest class of creditors in the case.

Combined, the legal costs are estimated to be approximately $16 million.

The archdiocese has paid about $5.3 million to the seven firms it retained to help navigate bankruptcy court since filing for Chapter 11 in January 2015, according to the financial disclosure it filed Friday.

It still owes another $4.1 million, bringing its estimated total costs for legal services in the case through Aug. 31 to about $9.4 million, court documents say.

The parish committee has so far paid about $2 million in legal costs, but still owes another $1 million for work done through the end of August.

Meanwhile, the creditors in the case, including the group of sexual-abuse survivors, have doled out about $1.3 million to the two firms representing their interests. The group still owes another $2.7 million for work completed through Aug. 31, according to its financial breakdown.

Not included among the disclosures was the amount owed to Jeff Anderson and his team, the lead attorney representing individual sexual abuse survivors’ civil claims against the archdiocese and its parishes, according to Mike Finnegan, an attorney with Anderson’s law firm in St. Paul.

Finnegan said no money has or will be paid to the law firm until survivors get paid.

“The only way we get money is if they get money,” Finnegan said.

An anonymous letter recently filed with the court suggested Anderson was intentionally trying to prolong the bankruptcy proceedings to increase his earnings.

Anderson did not respond to a call for comment. But Finnegan shot down that notion.

“It’s not accurate,” Finnegan said. “Jeff’s work and our work over decades of representing courageous survivors speaks far more than anything else about what Jeff and our firm has been about, and that is, number one, to ensure that no further abuse happens.”

Two such survivors who spoke to the media recently praised Anderson’s representation to date.

Kressel recently heard arguments from the various parties in the case about what financial plan should ultimately dictate the payout to survivors.

One of the plans was crafted by lawyers for the archdiocese and rejected by the group of survivors. The second was submitted by attorneys for the survivors.

The major difference between the plans is the amount of money accessible to survivors, with a key sticking point centering on how much exposure the archdiocese’s insurers should have.

Kressel took the arguments under advisement and is expected to issue his decision in the coming weeks.