Archdiocese bankruptcy creditors raise concerns about excluded victims

By Annysa Johnson
Milwaukee Journal Sentinel
August 10, 2015

The Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy sex abuse cases, filed for Chapter 11 bankruptcy protection in 2011. As the case proceeds, we'll have updates, analysis, documents and more.

The creditors committee in the Archdiocese of Milwaukee bankruptcy is challenging the terms of the $21 million settlement announced by Archbishop Jerome Listecki last week, saying the church excluded about 73 victims who committee members believed would be compensated when they agreed to the deal, its chairman said Monday.

Charles Linneman, who heads the five-member committee, said members understood that the only survivors who would not be compensated were those who had received prior cash settlements from the church — about 84 people.

That contradicts the statement issued by the archdiocese last week that 157 individuals would not be compensated.

"We want some answers about who is really in this group," Linneman said.

Frank LoCoco, lead attorney for the archdiocese, said it is in talks with plaintiffs' attorneys to determine how their clients will be treated under the plan, which is scheduled to be filed Aug. 24. He said some of the 157 who were deemed to receive no cash payment could be compensated as a result.

"Some of the 157 'may' move into other categories," LoCoco said in an email to the Journal Sentinel.

The $21 million total compensation figure was not at issue in the concerns raised Monday. The archdiocese announced last week that it would pay $21 million to compensate 330 victims who were sexually assaulted as children by priests and others associated with the 10-county archdiocese as part of a plan to emerge from its over 4-year bankruptcy.

An additional 92 victims could accept a $2,000 payment or try to persuade U.S. Bankruptcy Judge Susan V. Kelley that they should be in the larger pool of compensated victims, the archdiocese said.

James Stang, an attorney who represents the committee, said all victims, regardless of where they are classified, would have an opportunity to challenge their treatment in the settlement agreement and reorganization plan.

"Everyone will have a chance to be heard on the classification scheme," Stang said. "No one's going to be told the court is closed to them."

Stang stressed that the committee "has not repudiated the settlement."

Linneman concurred but said that might change if certain claims are disallowed.

"If it stands the way the archdiocese is presenting it, I believe the committee would object to that."

The archdiocese's original classification scheme announced last week would have excluded several categories of claims, including those from victims who could not identify their abuser and cases that didn't involve sexual abuse.

Linneman and others takes issue with the church excluding individuals who sued in state court, only to have their cases thrown out because of the statute of limitations.

The archdiocese filed for Chapter 11 bankruptcy protection in January 2011. Kelley has scheduled a confirmation hearing on its reorganization plan to begin Nov. 9.




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