Diocese Bankruptcy Settlement 'Best Opportunity for Healing'

By Gregg Hennigan
The Gazette
December 3, 2007

The Roman Catholic Diocese of Davenport would pay up to $37 million to sexual abuse victims under a plan revealed Monday that paves the way for the diocese to emerge from bankruptcy protection after 14 months.

The agreement, which still must be approved by a judge, was reached at 1 a.m. Nov. 29 after four days of mediation in Chicago between attorneys for the diocese and the case's creditors committee, which is made up of alleged abuse victims. Bishop Martin Amos also was involved.

The diocese and its insurance carriers would pay the money, and some individual parishes may also contribute. The agreement also includes several non-monetary terms, including Amos agreeing to write a personal letter to any victim, or relatives of victims, who requests one.

"The settlement provides the best opportunity for healing and for the just and fair compensation of those who have suffered sexual abuse by priests in our diocese," Amos said in a statement.

A reorganization plan, which will detail the settlement, will be filed with the U.S. Bankruptcy Court for the Southern District of Iowa in the "near future," both sides said. Judge Lee Jackwig still must approve the plan, which the diocese said in a news release it expected to occur around April 1.

If Jackwig OK's the plan, most of the money would go to the 156 people who filed claims in the case, saying they were abused by the diocese's priests at some point during the past several decades. Payments are not expected to begin for at least several months.

Almost every one of the alleged victims has remained anonymous. One who has not, Mike Uhde of Davenport, who is co-chairman of the creditors committee, declined to comment but said there may be a news conference Tuesday.

In a news release, the committee said, "As most of the survivors have stated repeatedly, 'This was never about the money. This was and still is abut justice, prevention and accountability.'"

The diocese filed for Chapter 11 bankruptcy protection Oct. 10, 2006, after saying it did not have the money to settle the claims stemming from its clergy sexual abuse scandal.

At the time, the diocese had just lost a $1.5 million case brought by Uhde and was soon to go to trial for another case. Those actions were put on hold because of the bankruptcy filing, though the diocese had already paid about $10.5 million in settlements to abuse victims since 2004.

The diocese has 105,000 parishioners and covers 22 counties in southeast Iowa.

The Davenport diocese was just the fourth in the nation to file for bankruptcy because of the clergy sex abuse scandal that has rocked the Catholic Church much of this decade. It joins those in Portland, Ore., Spokane, Wash., and Tuscan, Ariz., all of which have emerged from bankruptcy. Those settlements ranged from $22.3 million in Tucson to $75 million in Portland, according to media reports in those cities.

In February, the San Diego diocese became the fifth diocese to file for bankruptcy. A judge dismissed the case last month after the diocese agreed to pay $198 million to its accusers.

In Eastern Iowa, the diocese and the creditors committee have repeatedly said in court filings that they hope to work together to avoid some of the animosity found in the other bankruptcy cases.

The diocese pledged to liquidate all of its assets, including it's property. On Monday, it said it would sell its headquarters, the St. Vincent Center in Davenport.

It was not immediately clear how much of the $37 million settlement would be paid by the diocese and how much its insurance would cover. The insurance companies have asked that their contribution be kept secret for now, though it could come out in court, said Craig Levien, a Davenport attorney who has represented many of the alleged victims and was part of the mediation leading to the bankruptcy agreement.

The diocese, in its news release, said all Catholic entities — including schools and parishes — would be released from liability for abuse cases that occurred before the bankruptcy filing.

Still to be determined is any contributions from individual parishes, diocese spokesman Deacon David Montgomery said. He declined further comment.

Levien believes the parishes are going to be asked to contribute something because, he said, the amount the diocese is paying is more than what it has said it has in assets.

The agreement came after four days of mediation that Levien described as "very difficult and very much marathon" sessions overseen by a retired Chicago judge. Amos was personally involved, the diocese said.

The non-monetary portions of the settlement, in addition to the letters from Amos to victims, include the diocese publishing the names of all known abusers, visits by Amos to the parishes where abuse occurred, counseling for victims, and the publication of the stories of victims in the diocese's newspaper, the Catholic Messenger.

If the settlement is approved by Judge Jackwig, most of the money would go to the victims. Attorneys fees would be taken from that sum.

An arbitrator will decide how much each victim gets on a case-by-case basis, Levien said. The diocese said money would begin to be distributed around July 1, but Levien said it may take until October.

Also, a fund will be set aside for future claims, though how much will go in it will need to be determined.

David Clohessy of St. Louis, national director of the Survivors Network of those Abused by Priests, said abuse victims don't come forward for the money.

"Virtually every single one of the thousands of people who have contacted us say, 'I just want to make sure that it doesn't' — sorry, I get choked up about this," he said, pausing for a moment, "'I just want to make sure it doesn't happen to one more kid.'"



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