Up to $64.3M ‘not guaranteed’ in new Guam clergy sex abuse payout plan

Guam Daily Post

July 11, 2022

By Haidee Eugenio Gilbert

Total available for settlements ranges from $37M to $101M

Amid objections, Guam’s Catholic Church and its bankruptcy creditors made changes to their joint plan to compensate more than 270 survivors of clergy sexual assaults, including a clarification that up to $64.3 million of the proposed payout is “not guaranteed.”

Without such a clarification, clergy abuse survivors may go on thinking that their total payouts could be $37 million to $107 million, according to those who filed objections to the original joint plan.

The contemplated payout has been reduced to about $37 million to $101 million under a newly amended joint plan that the Archdiocese of Agana and its Official Committee of Unsecured Creditors filed in bankruptcy court.

The amended joint plan notes “the risks and other factors that would reduce or eliminate” the ability to collect from certain entities, such as the Boy Scouts of America and archdiocese insurer Continental Insurance Co.

Up to 64% of that maximum amount of the revised payout plan could involve further negotiations, or even litigation, to obtain.

The “not guaranteed” amount includes:

  • $55 million that the archdiocese and its creditors said would come from the Boy Scouts of America, which earlier said it’s not contributing that amount and recommended that this should be made clear in order not to mislead clergy abuse survivors.
  • Up to $9.3 million in settlement money from Continental Insurance. In the initial joint plan, the contemplated settlement amount with the same insurer was “up to $15 million.” The trust and the claimants could also litigate to obtain judgments against this insurer.

The revised joint plan, or the “First Amended Joint Disclosure Statement,” says the compensation to survivors also includes:

  • $16.5 million to $23 million in estimated value of certain real estate property that the archdiocese owns and will transfer to a trust for the survivors.
  • $6.609 million in cash contribution from the archdiocese’s current bank accounts.
  • $18 million from the archdiocese’s insurer, AIG/National Union.
  • $200,000 in initial contribution from the archdiocese to the co-called unknown tort claim reserve.
  • Proceeds from the sale of the FHP/TakeCare real property in Tamuning and the Chancery real property in Agana Heights.
  • Some $332,500 worth of burial plots for abuse survivors. Specifically, these are 50 single-vault ground plots at the Pigo Catholic Cemetery.
  • Free Catholic school education, grades K through eight, for students related to clergy abuse survivors, for 10 years. They are nontransferable.

“Thus, between the various forms of funding for the Plan, it is expected the Tort Claimants will receive the grand total sum of between $37,019,033 and $101,000,000, which will be payable to the trust set up through the Plan and Disclosure Statement process,” the archdiocese and its creditors said in their amended joint plan.

On Wednesday, U.S. District Court Chief Judge Frances Tydingco-Gatewood will hold a hearing on the plan to get the archdiocese out of its more than 3-year-old bankruptcy.

The survivors, other creditors and the court still have to confirm and approve the proposed joint plan before any payouts can be made.

The archdiocese sought bankruptcy protection in January 2019 after a steady stream of former altar boys and others came forward, claiming their parish priests or others associated with the Catholic Church on Guam raped or molested them when they were minors, dating as far back as the 1950s.

Rounds of mediation to settle the claims have since been held. 

Prior to the filing of the joint plan, the creditors had to sue the archdiocese over its shielding of certain Catholic parishes and schools’ properties from being used to settle the claims. The court sided with the creditors.

Who’s the trustee?

The joint plan named finance expert Craig Wade as the trustee of the trust for survivors after interviewing other candidates for the job.

Wade has been the chief lending officer for Bank of Guam and other financial firms. He is currently president and chief finance officer of the JRV Group.

The joint plan also identified Kramer Law LLC, out of Minnesota, a law firm specializing in alternative dispute resolution, as the tort claims reviewer. The law firm has been involved in other diocesan bankruptcy cases.

Frank Pangelinan of Latte Stone Properties will serve as the real estate agent adviser for the trust, the joint plan said.