MILWAUKEE – Amid the references to statutes, codes and judicial precedents, as well as statements from the bench and arguments and counter-arguments from attorneys for sexual abuse victims and the Archdiocese of Milwaukee, one phrase has regularly been heard during more than two years of the Chapter 11 reorganization proceedings: “Move forward.”
It was heard again Thursday, Feb. 21, when U.S. Bankruptcy Judge Susan V. Kelley ruled upon three motions – two filed by attorneys for the debtors (archdiocese) and one by the creditors (abuse victims). She approved an archdiocesan motion to continue making payments, as it has done the last two years, to 11 victims with whom settlements were reached prior to the start of the Chapter 11 reorganization. This year’s payments will total $92,000.
Kelley ruled in favor of the archdiocese on a motion, filed Jan. 24, that suspends payments to professionals involved in the case. Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, told your Catholic Herald Jan. 25 that how they would be paid would be stipulated in the reorganization plan.
Had the motion not been granted, the archdiocese’s operating cash projections would have been negative $488,352 by the end of April, according to an exhibit filed with the motion. Since the bankruptcy proceedings commenced Jan. 4, 2011, costs to the archdiocese have totaled more than $9 million.
The third motion, made by the creditors’ committee, sought to sequence claims, i.e., arguing “that the most expeditious and fair way to resolve matters is to decide if there is actually insurance money to cover claims before litigating the claims,” according to the summary of disposition provided by the court.
Maintaining a concern that the archdiocese has had throughout the proceedings, i.e., determining who is eligible to make a claim, archdiocesan attorneys noted that more information about the validity of the claims would be needed before insurance companies could be called upon to pay.
After archdiocesan attorneys assured the court and the claimants’ attorneys that the archdiocese did not dispute that abuse took place, and that it intended to make therapy available to all claimants, even those whose claims were barred by the statute of limitations, Kelley ordered that some of the claim objections could go forward.
Previously, the judge had ruled that communications from a mediated claim would be allowed regarding an objection to a claim filed by claimant A-282. She reconsidered.
“The court reasoned that the reconsideration and denial of this claim is the most expeditious way of obtaining appellate guidance on whether the communications from the mediation sessions can be introduced in response to the claim objections,” according to the summary of disposition provided by the court.
Kelley, directing her remarks toward claimants’ attorneys, said, “The fastest way to move this thing forward (for those who had settled claims with the archdiocese) … is to reconsider my decision and say you’re not allowed to use evidence from the mediation and then, therefore, the claim, it seems to me, would probably have to be disallowed and you could immediately appeal that.”
She continued, “You could take one appeal on that one case, which is a very compelling claimant that we’ve got. It’s a very compelling story you’ve got to tell. If I am listening to that story and open this up, and now we’ve got mediators screaming for protection, all the discovery, and all the problems, if I’m wrong, and the mediation statements shouldn’t be considered, we have spent a lot of time and a lot of money and a lot anxiety for nothing.”
Kelley said she did not dispute the fact that the claimant had been abused, noting that the claimant had been “very strong to come forward and file this claim. He needs to stay strong.”
In disallowing the claim, she emphasized, “It’s on a legal point.”
Turning toward the claimants’ attorneys, Kelley said, “You go to an appellate court, and you see what that court says. We do that; we put the rest of them on hold until we see what he (the appellate court judge) says. If you don’t like what he says, or they don’t like what he says, you could go to the Seventh Circuit. I think that’s the way to advance the agenda on this specific group.”
There is no timeframe for when an appeal will be filed, nor how long it could take the appellate court to issue a ruling.
