DULUTH (MN)
Forum News Service
January 5, 2018
By Tom Olsen
DULUTH, Minn. — A judge overseeing the Diocese of Duluth’s bankruptcy has signed off on two insurance company settlements that will pump nearly $10 million into the case.
The agreements, approved by U.S. Bankruptcy Judge Robert Kressel at a hearing in Minneapolis on Thursday, will provide almost $9 million to victims of child sexual abuse and allow officials to pursue additional compensation.
The settlements with Catholic Mutual Relief Society of America and Fireman’s Fund Insurance Co. resolve two-fifths of a federal lawsuit filed in June 2016 that has stalled the bankruptcy proceedings.
The diocese, which filed for Chapter 11 protection in December 2015 in the wake of a $4.9 million verdict, brought the suit against five insurers in an effort to force coverage of claims received from 125 people who said they were abused by priests.
Nebraska-based Catholic Mutual in November agreed to contribute $8.95 million to victims, becoming the first insurance company to resolve its role in the case after prolonged litigation and mediation.
Representatives of both the diocese and the victims said the settlement marked a “major step forward” in moving the bankruptcy case toward a global resolution that will adequately compensate victims and allow the diocese to emerge from Chapter 11 protection.
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