MINNESOTA
Fox 9
ST. PAUL, Minn. (KMSP) – The Archdiocese of St. Paul and Minneapolis has filed a bankruptcy reorganization plan that creates an initial fund of $65 million to pay victims of clergy abuse. The plan also includes a $500,000 fund to cover counseling services for survivors of abuse. Attorney Jeff Anderson, whose firm represents hundreds of abuse victims, called the plan “egregious.”
Tuesday, the victims of abuse and the creditors’ committee filed a motion in federal bankruptcy court that claims the archdiocese is hiding assets from the court and the victims. They claim the archdiocese and its parishes have more than $1.7 billion in assets — far more than the $45 million divulged in court documents last year.
In a letter to the Catholic community, Archbishop Bernard Hebda said he believes the plan is fair, but “we also know that some well-intentioned people may raise objections.”
Letter from Archbishop Hebda
Dear Brothers and Sisters,
On January 16, 2015, the Archdiocese filed for bankruptcy. Today, I write to tell you that we have filed a Plan of Reorganization as part of that bankruptcy process. Filing the Plan is an important and required step on our path to a fair resolution.
In preparation for filing the Plan, the Archdiocese sold available real estate assets, including our properties in Saint Paul, we will be leasing less expensive office space, and we have continued to cut our budget. For over a year, we have worked cooperatively with others. We have also participated in mediation to help determine the value of insurance coverage. Although progress has been made, the insurance companies and attorneys for those asserting claims of sexual abuse have not been able to agree on the proper value of the insurance proceeds for the claims. According to attorneys for claimants, the claims are worth hundreds of millions of dollars. The insurance companies disagree and place the value much lower.
Our Plan stands on three pillars. First, the unprecedented Settlement Agreement last December with the Ramsey County Attorney, which is incorporated into the Plan to ensure that we continue to do all we can to protect children. Second, the funding of a $500,000 victim counseling fund to promote healing for those who have suffered abuse. And third, the creation of an independent Trust. The Archdiocese has proposed that the Trust will initially be funded by $65 million or more in proceeds from Archdiocesan cash and the sale of our properties, proceeds from insurance settlements, and contributions of insurance settlements from our parishes. In addition, all insurance proceeds, including those that have not yet been agreed upon between the insurance companies and those filing claims, will be put in the Trust. A court-appointed Trustee will then control the Trust and have the authority to pay claimants.
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