MILWAUKEE — A status conference was held Thursday, Oct. 18 in the courtroom of Judge Susan V. Kelley of the U.S. Bankruptcy Court for the Eastern District of Wisconsin, following a failed mediation attempt to reach a settlement in the Archdiocese of Milwaukee’s Chapter 11 Reorganization process.
In a recording of the status conference, the judge said she appreciated that all parties tried to reach an agreement, but admitted she was disappointed that it failed.
“I continue to believe that a negotiated settlement is going to be the best result for everybody here, but we tried – I appreciate that,” Kelley said of the mediation effort that took place July 20 to Sept. 18 with Randall J. Newsome, retired Chief Bankruptcy Judge of the Northern District of California, as mediator. “And now we’re going to get back on the litigation track that is going to be very prompt indeed.”
A written summary of disposition from the status conference said that James Stang, counsel to the Official Committee of Unsecured Creditors, advised the court of various claims the committee intends to pursue “including a declaratory judgment action to determine whether there is insurance coverage available under policies issued by Lloyd’s of London and Stonewall Insurance.”
Julie Wolf, director of the Communications Office of the archdiocese, told your Catholic Herald Monday that a written statement was sent to parish priests to keep them up to date on the Chapter 11 proceedings, in which Kelley issued a number of deadlines to move the case along.
“During the status conference, the creditors’ committee’s attorney acknowledged that the archdiocese does not have money to pay claims, and asked the court for permission to preserve possible claims against the parishes, the Faith In Our Future Trust and the owner of the Cousins Center that are about to expire. In response, the archdiocese’s attorneys told Kelley that it would be a waste of time and money to allow the committee to try to preserve the claims which the archdiocese’s attorneys described as frivolous,” it said. “We wanted to share this with you to ensure that the complete statement is available to you in the event that you receive questions from parishioners.”
Fr. Ralph Gross, pastor of St. Bruno Parish, Dousman, said one parishioner asked him if money that was pooled into the parish deposit account could be taken from them. “My response to that is that we’re a separate corporation; just because we pooled our money to get a better return does not mean that that was archdiocesan money; it is not,” he said. “It belongs to the each parish. It belongs to the people at each parish.”
Fr. Gross said he was unsure how the creditors’ committee planned to secure a way into individual parish money.
“I feel badly that they’re wasting money; the creditors’ group is wasting money trying to break through that particular protection that’s been given to us as independent corporations,” Fr. Gross said.
Fr. Yockey, pastor of St. Jerome Parish, Oconomowoc, told your Catholic Herald that he talked for a few minutes during announcements at the weekend Masses about the failure of the mediation, and just a couple of people had questions concerning their contributions to the Faith in Our Future trust.
“I just repeated what I said during my remarks that we’ve had first-rate lawyers downtown Milwaukee, structure this thing and analyze it carefully even after the whole procedure got underway, and it’s as watertight as legally possible, so they were satisfied with that,” he said, noting that he gives parishioners updates anytime there’s “breaking news.”
Kelley has scheduled a hearing at 1 p.m. on Wednesday, Oct. 31.