Victims object to Wis. archdiocese bankruptcy plan

  • Article by: M.L. JOHNSON
  • Associated Press
  • April 4, 2014 - 6:25 PM

MILWAUKEE — Attorneys representing sexual abuse victims filed an objection Friday to the Archdiocese of Milwaukee's bankruptcy reorganization plan.

The archdiocese filed for bankruptcy in 2011, saying it would not have the money to pay if lawsuits filed by victims of clergy sexual abuse went against it. Hundreds of victims then filed claims in bankruptcy court, accusing the archdiocese of covering up abuse and moving priests to new churches without warning parishioners.

The reorganization plan filed by the archdiocese in February would set aside about $4 million to compensate nearly 130 people abused by priests who worked for the archdiocese. It would be one of the smallest per-victim settlements yet in about a dozen bankruptcy cases involving Roman Catholic dioceses, and would pay nothing to people abused by lay people or priests assigned to religious orders — even if they worked in the archdiocese.

The $4 million would come from a roughly $8 million settlement the archdiocese reached with a group of insurers known as Lloyd's of London. The rest of the settlement would go toward the archdiocese's bankruptcy costs.

The archdiocese has said it does not have more money to pay victims because properties like its lakefront headquarters are already mortgaged. Victims and their attorneys have insisted the archdiocese is hiding money, pointing to such things as its transfer of about $50 million into a cemetery trust fund.

The documents filed Friday in federal bankruptcy court reiterated victims' claim that the money should be available to help pay them and note that their attorneys' appeal of a court order ruling it off-limits has yet to be decided.

They also question the archdiocese's claim that many of its parishes are poor and raising money from them in annual assessments is difficult. Victims' attorneys say the archdiocese has refused to turn over parish financial statements, making it hard to determine the parishes' worth.

Archdiocese spokesman Jerry Topczewski said that the parishes are independent of the archdiocese, and the victims' attorneys would have to seek the documents from the parishes' attorney. The bankruptcy court previously ruled that property belonging to parishes could not be used to settle claims against the archdiocese.

Victims' attorneys also say the archdiocese had about $11 million on deposit with J.P. Morgan in September 2012 that its board designated for other purposes, but which could be used for victims. The archdiocese has said much of its money was given by donors for specific purposes, but victims' attorneys said it exaggerated the amount.

Topczewski said he wasn't sure of the status of that account and could not comment on those claims.

The archdiocese spokesman had said earlier in an email that most of the objections were not new and the lawyers were "simply re-arguing points that the court has already ruled upon."

"The committee's objections have been clearly addressed, in great detail, in the disclosure statement," he said. "After three and one-half years, we have turned a corner in this proceeding and it is time for both the archdiocese and the community to move forward by bringing the Chapter 11 to its conclusion."

Attorney Jeff Anderson, who represents many of the sexual abuse victims, did not immediately respond to a message left Friday.

He and other attorneys have disputed the archdiocese's claim that it is not responsible for the actions of lay people or priests who worked in the archdiocese but were assigned to religious orders. It is not uncommon for religious order priests to serve in Wisconsin parishes.

A group of insurers also have filed an objection, saying the plan doesn't adequately detail how money from the Lloyd's settlement will be distributed and doesn't clearly outline the liability the insurers could face.

A hearing on the reorganization plan is scheduled for April 17.

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