In Revised Reorganization Plan, Archdiocese Allocates More Than $133m to Victims

By Jessica Trygstad
Catholic Spirit
November 17, 2016

After months of negotiations with insurance carriers, the Archdiocese of St. Paul and Minneapolis filed an amended plan for Reorganization Nov. 15 that increased compensation for victims of clergy sexual abuse to more than $133 million. A court-appointed mediator facilitated the negotiations.

In a press conference after filing the plan, Charles Rogers, an attorney with Briggs and Morgan representing the archdiocese, said it had reached settlements with 11 of the 13 insurance carriers involved in the bankruptcy proceedings; negotiations continue with the remaining two, which, if resolved, will add additional funds to the total settlement. He described the amended plan as “holistic” and producing the best possible insurance settlements given the circumstances.

“Our goal all along has been to promote healing, to bring forth good will and to express our good will in actions and not our words,” Rogers said.

In its initial plan filed in May, the archdiocese identified more than $65 million in assets to compensate victims/survivors, with the potential for that amount to grow as settlements were reached with insurers.

Insurance settlements account for nearly $100 million of the proposed compensation plan. The remainder of the funds include $13.8 million in archdiocesan assets, most of which derived from the 2016 sale of archdiocesan properties, including three chancery buildings on Cathedral Hill. The plan also establishes a trust for sexual abuse claimants, with a court-approved allocation protocol.

Rogers noted that the $133 million plan includes the largest insurance settlement of any reported diocesan bankruptcy, and it would be the second largest total reported diocesan bankruptcy resolution in the country. The Diocese of San Diego paid more than $198 million to 144 victims in 2007. At the same time, he cautioned against comparing bankruptcies because dioceses all have different assets, and all situations are unique.

“The bankruptcy laws of our country will assure that we compensate to the best of our abilities those who have been harmed,” Rogers said. “We’re hoping that the revised plan will bring an opportunity for greater healing without subjecting claimants to further delay and further erosion of the resources available for their compensation.”

He reiterated that the archdiocese’s plan for Reorganization includes three major components: the child protection protocols with Ramsey County, which are being implemented; a $500,000 fund for victim/survivor counseling services; and $133 million in immediate compensation for victims/survivors.

By a court-established claim deadline in August 2015, more than 400 claims of clergy sexual abuse had been filed against the archdiocese.

A judge is scheduled to review the archdiocese’s plan at a Dec. 15 hearing.

Jeff Anderson, an attorney for sexual abuse claimants, said the archdiocese’s new plan lets insurers “off the hook” and accused the archdiocese of vastly under-reporting its ability to pay. Rogers noted that the archdiocese’s initial plan provided $65 million for a victim fund and would have allowed counsel for claimants to negotiate with carriers or litigate after the plan was approved. That plan was rejected by claimant representatives, so the archdiocese’s counsel pursued negotiations with its carriers and, according to Rogers, obtained “reasonable, good faith settlements.” Counsel for claimants approved the settlement amounts reached with six of the 11 settling carriers.

Rogers said all available assets that the archdiocese does not need to fulfill its core missions have been made available in the plan, and he looks forward to the court’s confirmation that the archdiocese has provided a fair accounting of its assets. Counsel for sexual abuse claimants earlier sought to consolidate the assets of more than 200 independent Catholic schools, parishes and charitable institutions into the bankruptcy proceedings, and the motion was denied as a matter of law by the bankruptcy court.

“It is unfortunate that claimants’ counsel is seeking to inappropriately divert vital resources from the charitable missions of these organizations,” he said.

The archdiocese entered Reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2015 as a means to distribute assets equitably and fairly among victims of clergy sexual abuse while maintaining its ability to fulfill its mission.








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