The Archdiocese of St. Paul and Minneapolis has spent $3.3 million on lawyers' and professional fees in recent months, bringing to at least $5 million the costs incurred this year by attorneys handling the church's bankruptcy and related clergy abuse issues.
At a court hearing Thursday, U.S. Bankruptcy Court Judge Robert Kressel approved payments for dozens of law firm staffers who are addressing the archdiocese's deep troubles, including its financial reorganization, its 400-plus clergy abuse claims and two abuse cases pending with the Ramsey County attorney's office.
Most of the work was done between June and October.
Kressel listened as attorney after attorney explained why his firm should be paid from the archdiocese estate. While saying he appreciates the work being done to advance the archdiocese's financial reorganization, Kressel reminded the attorneys that he ordered the case to mediation specifically "to save money and speed up the process."
Acting Archbishop Bernard Hebda said the complexity of the case is a big reason for the legal fees.
"A process this complicated requires the participation of highly specialized legal experts — and that takes time and costs money," Hebda wrote in a written statement. "In the end, we hope the spirit of cooperation and good will among all parties … will help us reach the ultimate goal of a fair resolution of the claims as quickly as possible. … We believe that the legal expenses that have been incurred and approved by the court are a necessary part of achieving that objective."
The archdiocese failed to provide figures for total attorney fees and expenses before the $3.3 million allowed Thursday. However, court documents show Kressel approved $1.3 million for the Minneapolis law firm of Briggs and Morgan and $378,000 for the Minneapolis firm of Stinson Leonard Street earlier this year.
That's not to mention fees spent even before the archdiocese declared bankruptcy in January. They totaled $5.2 million in the fiscal year ending June 30, 2015, according to a new financial report made public last month.
By contrast, during the same fiscal year, the archdiocese spent $2.3 million on Catholic education and $1.9 million on parish service and outreach, according to the financial report. Total operating expenses were $22.9 million. The legal expenses were not part of that.
Big fees, sensitive cases
At Thursday's hearing, bankruptcy counsel Briggs and Morgan submitted the application for the most compensation — $1.39 million for work performed from June 1 to Oct. 31. Attorney Charles Rogers told the judge that his firm reduced its rates by 21 percent for the archdiocese. He also said the large number of hours reflected the challenges of working with more than 400 abuse cases and dozens of insurers spanning 70 years.
The next biggest payment approved, more than $1 million, was for attorneys at Maslon LLP, the firm representing the parishes in bankruptcy court. Another $418,000 was approved for lawyers with Stinson Leonard Street who are representing the victims' committee in bankruptcy.
Meanwhile, the Fredrikson & Byron law firm will receive $191,800. It is the archdiocese's criminal defense counsel in two high-profile cases filed by the Ramsey County attorney that allege failure to protect children from former priest Curtis Wehmeyer. Longtime archdiocese counsel Meier, Kennedy & Quinn will receive $91,700.
Christopher Soper, a University of Minnesota law professor who follows church bankruptcies, said big legal bills are typical of bankruptcies — and typically draw criticism.
The fees may be a more sensitive issue for the church than for a for-profit corporation, he said, "because there's so much emotion involved in the reason the church is going bankrupt."
That said, the public should know there are checks and balances in bankruptcy court, he said. The judge must approve — and analyze — any spending. Said Soper: "It's not as if the attorneys can do whatever they want."