MILWAUKEE – After seeking and receiving clarifications on several points in the Archdiocese of Milwaukee’s fourth amended disclosure statement for its Chapter 11 plan of reorganization, Chief Judge Susan V. Kelley of the U.S. Bankruptcy Court for the Eastern District of Wisconsin approved the statement, Wednesday, Sept. 30.
Her decision clears the way for the court to hold hearings on confirmation of the second amended plan of reorganization, starting Monday, Nov. 9.
Claimants have the opportunity to vote to reject or accept the plan until Tuesday, Nov. 3. Notice of the voting procedure for the plan will appear as a “publication notice” in 28 publications in Wisconsin and in other parts of the United States.
In approving an archdiocesan motion approving the disclosure statement and establishing procedures for soliciting and tabulating votes, the court stated it “will review a ballot report concerning votes cast for acceptance or rejection of the amended plan, along with objections to the confirmation of the amended plan and other evidence and arguments from parties in interest and will determine whether the amended plan is in the best interests of the creditors.”
In a letter to claimants represented by the Official Committee of Unsecured Creditors (the committee), James Stang of Pachulski, Stang, Ziehl & Jones, the law firm representing the committee, recommended claimants accept the amended plan of reorganization.
“The plan embodies settlements of hotly contested disputes, including the Cemetery Trust litigation and insurance coverage issues. These settlements were reached after protracted litigation and ultimately achieved as the result of multiple mediation sessions before a seasoned mediator,” he wrote.
Stang noted that recommendation to accept the plan “considered the risk of not prevailing in those disputes, the delay and expense of protracted litigation and inevitable appeals.”
He continued, “The recommendation to accept the plan is also based on the likelihood that additional delays could result in the disallowance of a large number of survivor claims through the claims objection process.”
During the Sept. 30 hearing, Kelley overruled an objection a claimant had filed to the disclosure statement, and to one filed by Fr. James Connell, a senior priest of the archdiocese.
“He is not a party of interest in this case. I cannot consider his objections,” she said of his filing whose contents were not revealed.
In asking attorneys for the archdiocese to clarify a $1 million contribution the Continuing Formation of Clergy fund is making to the settlement, Kelley said she had received a letter from someone concerned that there was no consultation about that contribution to the settlement.
Daryl Diesing, one of the attorneys representing the archdiocese, said, “What has happened is that to put the plan across finish line, there was a request they (the fund) contribute something.”
He added that the fund’s board, comprised of five or six priests, was consulted, and approved the contribution, as did Archbishop Jerome E. Listecki.
It was a “gesture of good faith” by the board of the fund, Diesing said.
Kelley replied, “The board was consulted and made its decision. That should take care of their concern.”