The bankruptcy case of the Archdiocese of St. Paul and Minneapolis reaches a critical point this week, when a judge will be asked to reverse his decision to move up the deadline for filing clergy abuse claims.
The victims' committee will argue Thursday that the archdiocese didn't publicize the deadline as ordered and that the Aug. 3 date for the archdiocese will complicate a timely settlement, because the 187 parishes can still be sued until May 2016.
The archdiocese insists that it has complied with the publicity plan and that the Aug. 3 deadline will speed up its financial reorganization.
Both sides are in uncharted territory. The Twin Cities is the first place in the nation where a court has cut short a filing deadline despite a state law that allows all other abuse survivors to file claims considerably later.
Even so, 228 abuse claims have been filed against the church as of this week.
"There is not an ideal solution," said University of Minnesota law Prof. Christopher Soper. "There's a tension between getting this bankruptcy resolved as quickly as possible and realizing that this isn't a typical bankruptcy case."
The court must walk a fine line between the rights of victims, he said, and the archdiocese's interest in reorganizing quickly.
The archdiocese filed for Chapter 11 bankruptcy in January following a wave of clergy abuse lawsuits. The lawsuits were sparked by the Minnesota Child Victims Act, a law that opened a three-year window for people abused as children to file claims that could go back decades.
That window closes May 25, 2016.
U.S. Bankruptcy Judge Robert Kressel, however, ruled in April that the archdiocese could have an Aug. 3 deadline, a decision designed to speed up financial reorganization. Claims against other Minnesota dioceses could still be filed until next May.
The court ordered the archdiocese to publicize the new deadline on four separate dates in key national and local publications ranging from USA Today to the St. Cloud Times. But the first notices were placed in the more obscure legal-notices sections, prompting Kressel to order a more prominent placement.
Later notices were placed in more reader-friendly locations. The archdiocese also asked its parishes to post notices of the new filing deadline at churches and in the church bulletins. It contends that it has followed the publications order and that 88 percent of the parishes have complied.
"The archdiocese has worked diligently to faithfully comply with each court-approved notice and publication requirement in its concerted effort to reach potential sexual abuse claimants," wrote archdiocese attorney Richard Anderson in a court document.
But the victims' committee says that precious time was lost because the archdiocese "buried' the first notices in the legal section. The group also monitored the online newsletters of 89 churches that had informed the archdiocese they were complying with its notification requests. Rob Kugler, attorney for the victims'' committee, said that only 33 had complied fully as of June 24. Twenty-five failed to publish any notice.
"We already lost almost a year of time for archdiocese victims to step forward [with the early deadline]," said Jim Keenan, an abuse survivor who heads the committee of unsecured creditors. "Then they didn't aggressively get the word out, which just burned up more time."
The archdiocese argues that it was required only to request parish notices, not mandate.
At the Thursday hearing, the victims' committee also will argue that the Aug. 3 deadline is unlikely to result in a swifter financial reorganization because parishes can be sued through May 2016. Although parishes are separate corporate entities from the archdiocese, their insurance policies are often intertwined, attorneys say.
Insurance companies would want to settle all claims, not be faced with an unknown number filed in the future, they said.
But Mary Jo Jensen-Carter, the attorney for about 119 Catholic parishes, said that "parishes already are working with the Aug. 3 bar date" and that provisions to protect parishes from unforeseen future claims could be part of the bankruptcy negotiations.
The archdiocese also argues that a longer deadline would jack up professional fees and "impair the ability of the archdiocese to generate income."
The archdiocese relies on "the faithful" for its financial support, the archdiocese attorney noted. "The longer this case proceeds, the more that support is put in jeopardy."
Kugler, meanwhile, sees Thursday's hearing as "a significant moment in the case."
Said Kugler: "We're at a fork in the road."
Jean Hopfensperger • 612-673-4511