M.L. JOHNSON, Associated Press July 30, 2014
MILWAUKEE — A federal judge ordered mediation Wednesday in the Archdiocese of Milwaukee’s bankruptcy case, saying she believed it was the best bet for resolving the hard-fought case and keeping more money from going to lawyers rather than sexual abuse victims.
The archdiocese filed for bankruptcy in January 2011, saying it would not have the money to pay if it lost lawsuits filed on behalf of victims of clergy sexual abuse. More than 500 abuse victims have since filed claims in bankruptcy court.
A reorganization plan proposed by the archdiocese earlier this year would give 128 victims roughly half of an $8 million insurance settlement. Others who have filed claims would receive nothing. Meanwhile, attorneys’ fees are now estimated at $13.7 million, and victims have been outraged by the idea that attorneys would receive more money than them.
Bankruptcy Judge Susan Kelley said during a morning hearing that she would likely issue a written order later in the day for mediation to take place in early September.
“The point of this is to try to negotiate a resolution quickly and stop the legal fees,” she said.
A mediation attempt in 2012 failed, in part because the archdiocese maintained there were too many issues to hash out. A sticking point this time could be whether the archdiocese’s former insurers participate.
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