Clergy abuse victims will also vote on bankruptcy payment plans

ST. PAUL—Competing bankruptcy payment plans drawn up by the Archdiocese of St. Paul and Minneapolis and victims of clerical sexual abuse will go to the victims as well as...

ST. PAUL—Competing bankruptcy payment plans drawn up by the Archdiocese of St. Paul and Minneapolis and victims of clerical sexual abuse will go to the victims as well as parishes, vendors and other creditors for a vote. Judge Robert Kressel, presiding over the archdiocese’s case in U.S. Bankruptcy Court in Minnesota, ordered lawyers on both sides Thursday to start preparing documents and ballots that will be sent to creditors in the case, including hundreds of survivors of clergy sexual abuse. The vote is expected early next year.

The archdiocese plan calls for a proposed trust fund for claimants of about $150 million, the bulk of which will come from settlements with insurance carrier groups. The archdiocese would also contribute about $14 million in direct cash and other assets from the church to the trust fund, and $500,000 for a counseling fund for victims of sexual abuse.

The competing plan developed by the survivors’ committee calls for the archdiocese to pay about $80 million of its own money or money it would raise through borrowing. The plan developed by lawyers for about 450 victims also would allow the victims to pursue claims against the insurance companies which survivors’ lawyers believe will exceed the amount being offered in the archdiocese plan. The victims’ plan also would allow the survivors to continue to seek claims in lawsuits against individual parishes.

In a Thursday hearing before Kressel, the lawyers on both sides sparred on which plan was more electable by creditors.

Richard Anderson, a lawyer for the archdiocese, said the plan proposed by the survivors’ committee includes requirements on the archdiocese that would control church governance in ways that could violate constitutional protections. He also said the survivors’ plan painted an unrealistic picture of how much the archdiocese could raise to pay creditors through borrowing or fundraising.

Kressel, however, said he wanted descriptions of both plans developed by the attorneys to be sent to the creditors followed by ballots that would give the creditors the option to approve one or none of the plans. A voter would also be able to approve of both plans but indicate which plan that voter preferred, Kressel said.

The language of the descriptions will be discussed again in court Jan. 12.

Mike Finnegan, a lawyer for the abuse survivors, said he expected voting to happen early next year. But any plan approved by voters would still need to be confirmed by the court before it went into effect.

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Catholic clergy sex abuse

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