Archdiocese files bankruptcy settlement that will divvy up $21M among clergy sex abuse victims

MILWAUKEE — The Roman Catholic Archdiocese of Milwaukee on Monday, August 24th filed its bankruptcy reorganization plan, formalizing a recent settlement deal that will divvy up $21 million among more than 300 victims of clergy sex abuse.

The archdiocese filed for Chapter 11 bankruptcy protection in 2011 to address its sex abuse lawsuit liabilities. The bankruptcy plan is scheduled for review in November, and church officials are "hopeful this is approved by the judge," archdiocese spokesman Jerry Topczewski said.

"We're confident she will appreciate the work that's been done getting to this point," he added.

The creditors' committee, which comprises five abuse victims, is expected to endorse the deal, committee chairman Charles Linneman said.

Victims' advocates have criticized several aspects of the agreement, and Peter Isely, Midwest director of Survivors Network of those Abused by Priests, said he and others will work to address key issues, including getting more claims included in the settlement, before bankruptcy Judge Susan Kelley reviews the case.

"There's a window of time between now and November where we can make some things happen," he said.

Despite his misgivings, Isely acknowledges that many abuse survivors are ready to move on and will accept the deal to put the case behind them.

But SNAP officials do worry that if the plan is approved, 571 reports submitted by victims would be kept secret. That means hundreds of clergy members who committed these sexual assaults would also be kept secret, and SNAP officials are concerned they could harm more children.

"Some of them are going to be in ministry right now, who knows were? Some of them are going to be moved to other states. Some of them could be with other children right now. Some of them could be with families right now. Some could be on the pulpit somewhere right now. Who are these 100-plus offenders?" Isely said during a news conference in front of the Federal Courthouse in Milwaukee Tuesday.

SNAP officials are calling for an independent team of investigators that would be selected by both sides so that they could determine how many offenders there are, how many are guilty and where they are right now.

The settlement had been a sticking point that stalled a previous reorganization plan filed last year, but this agreement should conclude a yearslong process that has revealed the scope of the Milwaukee organization's involvement in a widespread clergy sex abuse scandal that has rocked the church.

In response to the crisis, which reached a boiling point in 2002, the church made sweeping reforms meant to stop molesters and help victims, including a pledge to investigate claims and oust abusers. Bishops also enacted safeguards for children, requiring background checks and special training.

A dozen Catholic dioceses nationwide have filed for bankruptcy in the past decade over abuse claims. Milwaukee's settlement, announced in early August, includes some of the smallest per-victim payments, another heavily criticized aspect of the deal.

"We weren't happy with the settlement amount," Linneman said, "but it was the most we were going to get."

Under terms of the deal, 330 abuse survivors will share $21 million, and a $500,000 therapy fund will be established for ongoing counseling. All of the archdiocese's parishes, schools and institutions, meanwhile, would be protected from lawsuits related to past abuse claims.

Below is a statement from Charles Linneman (chair, official committee of unsecured creditors) and Michael Finnegan (counsel for certain abuse survivors):

"The settlement the Archdiocese reached with the Creditors’ Committee on July 17 incorporated a claims classification review process that was and is still ongoing.  When the mediation settlement was reached, it included descriptions of different claims classifications for the various claims filed in the Chapter 11 proceeding.  The settlement allowed for a protocol for the Committee and lawyers for individual claimants to review the initial classification of any claim and to address any concerns to the Archdiocese, which has fully cooperated to review and examine each and every concern raised under the terms of the settlement agreement.

Attempting to remain true to the settlement agreed to in mediation, after a thorough claims review process, where the Archdiocese is working together with the Committee and the individual lawyers, many more claimants have been and will be moved into different classifications where they will now receive more or some form of compensation under the Plan.

The final class of claims receiving no monetary compensation is limited to the following categories of claims:

  • Claims previously settled through mediation or prior litigation (over half of the class)

  • Claims filed which are really duplicates of claims already filed

  • Claims from survivors alleging abuse by priests not associated with the Milwaukee diocese

  • Claims that do not involve sexual abuse of a minor

  • Claims which were withdrawn

We are satisfied with the work that has been and is being done in the claims review process and believe that we should continue to move forward in this bankruptcy."