MINNESOTA
Seattle PI
ST. PAUL, Minn. (AP) — The Archdiocese of St. Paul and Minneapolis filed for bankruptcy protection Friday in what’s become a common move for dioceses around the country facing heavy financial pressure from sexual abuse claims. Some questions and answers about the news:
WHY DID THIS HAPPEN?
Minnesota state lawmakers opened a floodgate of new litigation with a legal change in 2013. It opened a three-year window setting aside the statute of limitations on sexual abuse, allowing attorneys to file claims that in some cases were decades old. In addition to some two dozen lawsuits filed since then, attorneys have given notice that more than 100 cases could also be filed. The archdiocese recognized it didn’t have enough assets to pay all potential claims and keep operating.
WHAT HAPPENS WITH ALL THOSE LAWSUITS NOW?
All victims’ lawsuits, including a few cases that are scheduled for trial later this month, will be halted and they will fold into the Chapter 11 reorganization process. The victims become creditors, and can look to payment from the archdiocese’s assets and insurers.
WHAT WILL VICTIMS GET?
Good question. Friday’s filing gave only a broad range of church assets (between $10 million and $50 million, with much more in liabilities). Some attorneys say the bankruptcy process can open a path to assets that might have appeared to be off-limits to abuse victims. It’s unclear if that will happen in the archdiocese case. Typically, payouts in bankruptcy court come from church assets and insurers. The archdiocese recently sued several of its insurers, asking a federal judge to order that the carriers cover claims and legal fees.
Victims will likely get different amounts, depending on the severity of abuse and harm suffered. It would likely be up to a trustee or creditor’s committee to allocate funds.
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