Lawyers Delay Mediation Decision in Archdiocese's Bankruptcy Case
By Annysa Johnso
Milwaukee Journal Sentinel
May 14, 2015
Lawyers for the Archdiocese of Milwaukee and creditors in its bankruptcy have postponed until June a decision about whether to seek mediation in a lawsuit over the estimated $66 million it holds in a trust to care for its cemeteries.
At a brief hearing Thursday, U.S. District Judge Lynn Adelman offered to mediate the lawsuit or find a retired magistrate to do so.
James Stang, attorney for the creditors committee, which is composed of clergy sex abuse victims but represents all creditors, said he was open to Adelman's offer.
But archdiocese attorney Frank LoCoco suggested the parties remain too far apart for negotiations to be successful.
"We're not convinced that further mediation at this time would be fruitful," LoCoco told Adelman.
The Archdiocese of Milwaukee filed for Chapter 11 bankruptcy protection in January 2011 to address its sexual abuse liabilities dating back decades.
Adelman scheduled a June 16 hearing to pose the mediation question again.
The cemetery trust is the largest single asset potentially available to compensate sex abuse victims and a key element of the archdiocese's reorganization plan filed last year and now being revised.
The original plan called for the archdiocese to set aside just under $4 million to compensate 128 sex abuse victims of diocesan priests. It would be funded with $10.3 million in payments from its insurance carriers and a $2 million loan from the cemetery trust, although a large portion of that money would go toward legal costs. More than 400 others who filed abuse claims would receive no financial compensation.
If approved by U.S. Bankruptcy Judge Susan V. Kelley, it would be the smallest settlement in the 14 Catholic Church bankruptcies filed to address sex abuse claims to date.