Priest Abuse Victim Lawyers Reject Delaware Church Bankruptcy Payout Plan

By Steven Church
The Bloomberg
September 24, 2010

Lawyers for people allegedly sexually abused by priests in the Catholic Diocese of Wilmington, Delaware, rejected an offer that would pay victims as much as $75,000 each as part of a plan to end the local church’s bankruptcy.

Under the proposal filed yesterday in U.S. Bankruptcy Court in Wilmington, sex-abuse victims who sued the diocese in state court in Delaware would have their cases closed and moved either to federal court or put before a special mediator named by the Diocese.

Should the mediator find the claim is legitimate, the victim would be allowed to collect as much as $75,000 from a trust fund the diocese proposed to set up. The diocese didn’t say how much money it would put into the trust or whether the fund would have enough money in it to cover all claims.

“This plan is a mean-spirited, vindictive, hypocritical act, maliciously intended to prolong the suffering of survivors,” said attorney Thomas Neuberger, who represents 98 of the 151 sex-abuse victims with claims against the diocese in bankruptcy court.

The diocese filed bankruptcy last year with plans to settle lawsuits by current and former parishioners who say they were sexually molested by priests. Since then, lawyers for the diocese and those for more than 140 abuse victims have fought in court over everything from the cash pool to which sex-abuse lawsuits should be allowed to go to trial.

“While the plan is not supported by all creditors at this time, its filing comes after months of negotiations with the official creditor committees and other constituencies,” Bishop W. Francis Malooly said in a statement yesterday.

The case is In re Catholic Diocese of Wilmington Inc., 09- 13560, U.S. Bankruptcy Court, District of Delaware, (Wilmington).

To contact the reporters on this story: Steven Church in Wilmington, Delaware at

To contact the editor responsible for this story: David E. Rovella at


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