ST. FRANCIS – The Archdiocese of Milwaukee has “reached in principle” a settlement with Lloyd’s, London and London Market Companies, both of which operate under London Market Insurers (LMI), that will be part of the plan of reorganization that the archdiocese will file with the U.S. Bankruptcy Court Eastern District of Wisconsin.
The agreement was noted in a motion to extend the stay on motions the archdiocese and LMI had filed earlier in the Chapter 11 bankruptcy proceedings. The most recent motion was filed jointly Nov. 11 by attorneys for LMI and the archdiocese in the U.S. District Court for the Eastern District of Wisconsin.
“Details of the settlement agreement will be documented in writing, executed by the parties; we’ll have an agreement in writing and incorporated into the plan of reorganization,” Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, said Tuesday, Nov. 12. “The dollar amount will be disclosed in the plan of reorganization along with the non-monetary (elements) – best described as the actual agreement.”
LMI’s attorney Catalina J. Sugayan wrote in a statement of support for the motion that LMI “would agree to make a buyback payment and a release payment (from the archdiocese) … in exchange for a buyback and release of all possible liabilities relating to any claims that have been made or could be made against the LMI and other London Insurers relating to or connected with the LMI policies and other London policies…”
“We’re relinquishing our claims of coverage for any and all things that are covered under the policies,” Topczewski said. “In exchange, they’re providing financial compensation for the plan of reorganization; how abuse survivors are treated under the plan will be disclosed in the plan of reorganization just like any other creditor and how they would be treated in the plan.”
He termed the agreement with LMI “a major step” in the reorganization, but by no means the last one.
“The settlement with Lloyds is just one part of a complex plan of reorganization that addresses how all the creditors would be treated in the plan, but it’s a very important step. Why? Because we have already indicated that the archdiocese has very few remaining assets,” Topczewski said.
He noted insurance policies are “the one remaining asset we have.” Referring to a point made in the joint motion, he said the archdiocese will continue to talk with Stonewall Insurance and “a half dozen or so smaller insurers.”
“The more we can get that finalized, the better the plan will be when it is proposed to the court, and the more likely it will be confirmed at some point to allow us to emerge from Chapter 11,” Topczewski said. He could not provide a specific date for when the plan of reorganization would be filed with the court.
Topczewski explained why settlements with the insurance companies are critical.
“Assets of the archdiocese have to not only pay the costs of Chapter 11 for the attorneys on both sides, which are staggering amounts of money, as well as try and provide some pool of money that would be directed to the creditors, including the abuse survivors,” he said. “With no assets remaining, we want to put pressure on insurance companies so those resources are available.”
Attorney costs have totaled more than $4 million since the archdiocese filed for bankruptcy on Jan. 4, 2011. Brian T. Olszewski