The Archdiocese of St. Paul and Minneapolis is attempting to block a $25 million clergy abuse settlement reached by the Crosier religious order, which would be the first bankruptcy settlement of its kind reached in Minnesota.
The archdiocese filed an objection to the plan Wednesday to protect itself from possible future judgments by the Crosiers, some of whom worked in archdiocese parishes. The objection comes a week before the Crosier plan is slated for a confirmation hearing before a bankruptcy judge.
“The Crosier settlement is the very first [bankruptcy] settlement since the Child Victims Act of 2013, and the archdiocese has put that at risk,” victims’ attorney Mike Finnegan said at a news conference Thursday. “They’ve had a year to try to work out something with the Crosiers, and now we’re seven days away from [the] confirmation hearing. This is a hardball legal tactic to block the settlement.”
The archdiocese said it filed the objection to ensure it “preserved its insurance rights regarding overlapping claims.” That would ultimately benefit the abuse victims in its bankruptcy case, it said.
“The Archdiocese fully expects that its objection, as well as the similar objections filed by the Crosiers in the Archdiocese case, will be resolved in a way that does not delay confirmation of a plan in either case,” said the statement by Tom Abood, chairman of the archdiocese bankruptcy reorganization task force.
Attorneys for the abuse victims said the new request from the archdiocese would have the effect of delaying individual settlements until after the archdiocese settles its bankruptcy proceedings.
Ben Januschka, a member of the survivor’s creditor committee in the Crosiers’ settlement, said he was shocked that the archdiocese was filing an objection now.
The settlement was reached in June, and he said he was grateful to have the emotional trauma of reliving memories and forging an agreement behind him.
“I can’t believe we’re at a point so close to this being resolved,” said Januschka, a retired Farmington school principal. “We want this resolved. All it will take is someone at the archdiocese to stand up and say ‘Enough is enough!’ ”
Januschka is among 67 abuse victims who filed claims in bankruptcy court against the Phoenix-based religious order, which has a community in the Minnesota town of Onamia.
The Crosier settlement was unusual in that it was reached between the religious order, insurers and the abuse victims before the order filed bankruptcy last year. The four Minnesota dioceses that also filed for bankruptcy in recent years because of abuse claims are working out settlements after the bankruptcy filing.
The formal papers agreeing to the Crosier settlement were slated for a March 22 confirmation hearing.
Abood’s statement focused on the importance of insurance payments to maximize victim compensation funds.
“The Archdiocese is committed to maximizing its resources available to compensate victims,” said Abood, “and to reach a prompt consensual result in its bankruptcy case through the mediation ordered by Judge [Robert] Kressel. The availability and value of its insurance is at the heart of these resources.”
But Finnegan said that the archdiocese’s objection has far more sweeping ramifications than insurance payments and avoiding overlapping lawsuits.
“It would block every single abuse survivor from reaching a resolution on their cases until the archdiocese has their case resolved,” he said.
The archdiocese objection comes at a time when it is under increasing pressure to reach a settlement with the 443 abuse victims who have filed claims in its own bankruptcy case. Settlement debates are now in year four, with the archdiocese racking up $17 million in attorney fees to date.
Court documents show that mediation between the archdiocese, its insurers and the victims are in full swing, with sessions slated for the entire first week of April.