Mediation results in $21 million settlement for abuse survivorsRead Time 4 min

More than four years and eight months after the Archdiocese of Milwaukee filed for Chapter 11 bankruptcy, the result of failed mediation with 15 victim/survivors of clergy sexual abuse in which it offered a settlement of $4.6 million, the archdiocese and the Official Committee of Unsecured Creditors (the committee) have reached an agreement for a plan of organization. The agreement was the result of mediation, conducted by Paul Finn, a Boston attorney, founder of Commonwealth Mediation and Conciliation, Inc., and its president and CEO, in Milwaukee July 15-17.

The plan, announced Tuesday, Aug. 4, will be submitted to Chief Judge Susan V. Kelley of the U.S. Bankruptcy Court for the Eastern District of Wisconsin on Monday, Aug. 24. She is scheduled to rule on it in early November.

Survivors to share $21 million

Key numbers in the agreement are 330 abuse survivors will share $21 million. The amount for each will be determined by a court-appointed claims administrator, possibly Finn, who will evaluate claims in two of the four classes of abuse survivors listed in the plan, and make recommendations to the committee as to final compensation.

The four classes include 579 claims filed in Chapter 11. The first class includes 223 abuse survivors whose claims were against “an Archdiocese of Milwaukee priest with a previous substantiated allegation of sexual abuse of a minor,” according to information provided by the archdiocese.

The second class is comprised of 107 claims involving abuse by a religious order priest, brother, sister or lay employee who experienced the abuse at an archdiocesan parish, school or institution where the abuser worked.

Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, explained why those claims were included, even though they did not involve archdiocesan priests.
“To get a settlement, we compromised. We thought because this abuse occurred at an archdiocesan parish, school or institution where the abuser was working, we felt that was a compromise that was just,” he said.

The 92 claimants in the third class are those whose claims against the archdiocese are not substantiated or could not be substantiated, or where abuse occurred by someone at a non-archdiocesan organization.

“The creditors’ committee – and that’s an important distinction – is setting aside money to say to them, ‘We will give to them a small amount of money, $2,000 each, at our choice, out of the settlement,'” Topczewski said, noting it is a set amount not subject to review by the claims administrator.

The fourth class is comprised of 157 claimants whose claims were either disallowed or dismissed or whose claims are not for sexual abuse or do not identify the abuser. This group also includes claims filed by 84 individuals who had previously received a financial settlement from the archdiocese. None in this class receive payment.

Insurance settlements part of compensation

Part of the compensation for victim/survivors will come from insurance settlements totalling $11 million, including $7.4 million from Lloyd’s of London and $2.3 million from OneBeacon.

“The Cemetery Trust will voluntarily lend us $3 million – the same as they were going to do in the original plan (of reorganization),” Topczewski said.

The trust will reimburse the archdiocese $5 million for perpetual care that covers the last five years. The trust will contribute another $8 million “to settle all pending litigation to bring closure to the Cemetery Trust issue,” according to information provided by the archdiocese.

The market value of the Cemetery Trust has been listed as high as $65 million, providing it with the resources to continue providing the perpetual care for which people paid.

One of the concerns regularly mentioned by the court, attorneys and public throughout the proceedings was the cost of Chapter 11. More than $12 million has been paid to attorneys and other professionals, while another $6.5 million has been accrued but not paid. As part of the agreement, additional legal fees have been capped at $1.25 million.

Topczewski said, “Abuse survivors will receive more money than will be paid out in professional fees, which was important to abuse survivors and it was important to us, too.”

From the outset, Archbishop Listecki insisted any plan of reorganization had to include a therapy fund. That $500,000 fund, made possible by contributions from parishes, will provide abuse survivors with access to therapy and counseling for as long as they need it.
Other key provisions of the agreement, endorsed by the Archdiocesan Finance Council and College of Consultors, include:

∙ All Archdiocese of Milwaukee parishes, schools and institutions will receive a legal and binding release protecting them from future lawsuits relating to abuse claims that were filed or could have been filed in the Chapter 11 proceeding. This includes a suit that had been filed by attorney Jeffrey Anderson against St. Louis Parish, Caledonia.

∙ Archdiocesan offices will remain at the Cousins Center.
According to Topczewski, “It is not on market. Part of the plan was to stay here. Economically, there is no reason for us to move.”

∙ A new lease for the Milwaukee Bucks to use the Cousins Center as its training facility has been reached. No dollar amount was available.

∙ No legal action against the Faith In Our Future Trust, De Sales Preparatory Seminary or other Catholic institutions will occur.

∙ Once the plan is approved, the Cemetery Trust will voluntarily withdraw its request asking the U.S. Supreme Court to review the March 9 Federal Seventh Circuit Court of Appeals decision which said there was no First Amendment protection in Chapter 11 bankruptcy proceedings for the cemetery trust.
“We have a new day,” Topczewski said.