Attorneys for the Official Committee of Unsecured Creditors, which includes victims of sexual abuse by priests, are asking for interim payment of fees and reimbursement of expenses to themselves and professionals they have hired to represent the committee in the Archdiocese of Milwaukee’s Chapter 11 reorganization.
In a motion filed July 11, in the court of Judge Susan V. Kelley of the United States Bankruptcy Court for the Eastern District of Wisconsin, the attorneys – Pachulski Stang Ziehl & Jones, and Howard, Solochek & Weber – state, “…for an order reinstating the payment of interim fees and reimbursement of expenses to the Committee’s (creditors) Chapter 11 professionals in accordance with this Court’s prior order setting interim payment procedures, or in the alternative, that the Court direct the Debtor to pay all fees and expenses of Committee professionals which were the subject of previously filed requests that were not objected to, but have not been paid, in accordance with the terms of its prior order for interim compensation…”
In a prepared statement, Julie Wolf, spokesperson for the archdiocese, said that the Bankruptcy Reform Act of 1988 stipulates that a debtor, i.e., the Archdiocese of Milwaukee, is required to pay all professional fees as part of its Plan of Reorganization.
“When the plan is approved, all fees would be paid,” she said. The archdiocese is responsible for the fees of the creditors’ attorneys, as well as for the fees of its own counsel.
The Archdiocese of Milwaukee has until July 25, to file a response to the motion, scheduled to be heard by Kelley on July 30. Unlike the attorneys representing the creditors, the attorneys representing the archdiocese – Whyte Hirschboeck Dudek – have not sought interim payment of fees and reimbursement of professional expenses.
On Jan. 24, 2013, attorneys for the archdiocese filed a motion to suspend payment of professionals because the archdiocese was running out of money. The court approved that motion on Feb. 21, 2013.
As of July 22, 2014, fees billed by the creditors’ attorneys to the archdiocese totaled in excess of $6.447 million.
In her statement, Wolf, reiterating that counsel will get paid, asked why attorneys for the creditors’ committee “are spending more of the archdiocese’s money on themselves in making such a motion when it simply continues to drain the money available for abuse survivors.”
“They want to spend more money to try and get paid first, at the expense of the creditors they are supposed to be representing,” she said.
Near the conclusion of their motion, the attorneys for the creditors state, “The debtor can and should pay the expenses associated with its Chapter 11 case to have the right to use the bankruptcy process and attempt to confirm a plan and obtain the unprecedented and extraordinary relief it seeks through the plan. The debtor should not be permitted to avail itself of the privileges of Chapter 11, financed by the committee professionals, while ‘dangling’ payment of outstanding fees and expenses only on the condition that a highly controversial and hotly contested plan which is repugnant to the committee and the survivors, is confirmed.”
Wolf refuted that statement.
“The archdiocese has never offered to pay the creditors’ committee’s attorneys if the committee supported the plan,” she said. “It did not and will not.”