IMAGE: CNS photo/Dave Hrbacek, The Catholic Spirit
By Maria Wiering
ST. PAUL, Minn. (CNS) — The
Archdiocese of St. Paul and Minneapolis has reached a consensual plan with a
committee representing clergy sexual abuse survivors to resolve its bankruptcy,
offering $210 million for restitution to claimants.
The settlement is the largest
ever reached in a bankruptcy case related to clergy sex abuse.
“By means of this consensual
plan, the archdiocese and its parishes bring definitive resolution to this
matter in a way that avoids further litigation and expense, and that allows the
local church to carry on with its mission of spreading and living the Gospel
Jesus Christ,” said Archbishop Bernard A. Hebda during an afternoon news
conference announcing the agreement May 31 at the archdiocese’s central offices
in St. Paul.
Archbishop Hebda expressed
gratitude for the survivors who have come forward.
“Without their courage and
persistence, today could not be possible,” he said. “I’ve been humbled by their
willingness to share their stories with me. To those of you who have done so, I
thank you for that gift.
“I recognize that the abuse
stole so much from you — your childhood, your innocence, your safety, your
ability to trust, and in many cases, your faith. Relationships with family and
friends, relationships in your parishes and communities were harmed. Lives were
forever changed. The church let you down, and I’m very sorry.”
At an earlier news conference
May 31, St. Paul attorney Jeff Anderson, who represented most of the abuse
survivors, also announced the settlement, calling it “a story of trauma to
triumph.”
“This is some affirmation, as
well as accountability,” he said of the plan while standing with several sexual
abuse survivors, their advocates and other attorneys, many of whom wiped away
tears throughout the press conference. “This all represents hope, help,
healing, and ‘ courage in the pursuit of truth.”
Speaking at Anderson’s news
conference, Jamie Heutmaker, a survivor who is part of the Unsecured Creditors
Committee, which represents survivors in the bankruptcy process, expressed his
gratitude for people who have supported him in the nearly five decades since he
was abused.
“Today is a great day for us and
all survivors,” he said. “There’s still work to be done, but we’ve obviously
done some really good work here, which I’m really proud of.”
The consensual plan includes
more than $50 million in increased funding from the archdiocese’s previous plan
of reorganization, which offered $156 million for restitution. The additional
funds came from insurers, archdiocesan funds and parish contributions. The
approximately $170 million contribution from insurers is the largest
contribution from insurance carriers in the history of diocesan abuse settlements,
according to Anderson.
Pending court approval, the
plan’s $210,290,724 settlement, minus administrative expenses including
unpaid attorneys’ fees, will be administered for survivor restitution through an
independent trustee. As part of the plan, parishes will receive a channeling
injunction which ends all litigation against them arising from this matter.
The funds will be available for
distribution upon its approval by Judge Robert Kressel, who is overseeing the
archdiocese’s bankruptcy proceedings.
Archdiocesan leaders hope the
bankruptcy can be completely resolved within a matter of months.
The consensual plan was the
result of years of mediation between the archdiocese, insurers, parishes and
representatives of survivors.
The archdiocese filed for
bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in January 2015 amid
mounting claims of clergy sexual abuse going back decades against priests and
others associated with the church in the archdiocese.
Archdiocesan leaders said reorganization
would ensure abuse survivors would be equitably compensated while the
archdiocese continued its mission. Mediation began immediately.
In May 2016, the archdiocese
filed a plan of reorganization, initially offering $65 million for abuse
survivor remuneration. Over the following months, that amount increased to $156
million, primarily through additional insurance company settlements.
As part of its bankruptcy, the
archdiocese sold its three chancery buildings on Cathedral Hill in St. Paul, as
well as a fourth property it owned near Northfield. It later moved its offices
to St. Paul’s Dayton’s Bluff neighborhood to rental property.
In August 2016, the Unsecured
Creditors’ Committee filed a separate plan for the archdiocese’s
reorganization, asserting that the assets of 187 parishes in the archdiocese’s
boundaries, three Catholic high schools and the Catholic Community Foundation
of Minnesota should be merged with the archdiocese’s assets in a plan for
reorganization. Kressel later ruled that the other organizations’ assets did
not legally require consolidation. The UCC appealed the ruling twice, but it
was upheld by the U.S. District Court in December 2016 and the 8th U.S. Circuit
Court of Appeals in April 2018.
While 11 other U.S. dioceses had
filed for bankruptcy related to claims of clergy sexual abuse between 2004 and
the archdiocese’s filing, the archdiocese’s reorganization was the first to
include competing plans. In March 2017, both plans were sent to creditors,
including abuse claimants, for a balloting vote. Abuse claimants voted
overwhelmingly for the UCC plan, while other claimants voted overwhelmingly for
the archdiocese’s plan. The decision for plan approval ultimately rested with
Kressel.
In December 2017, Kressel denied
both plans and ordered the archdiocese and UCC to return to mediation with the
goal of reaching a consensual plan.
In a memorandum explaining his
decision, Kressel expressed concern about the eight abuse claimants who had
died between then and when the archdiocese entered bankruptcy in January 2015,
and about others who might die as the reorganization process “drags on.”
The archdiocese, insurance
carriers, parish representatives and UCC returned to mediation, ultimately
arriving at the consensual plan May 30.
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Wiering is editor of The
Catholic Spirit, newspaper of the Archdiocese of St. Paul and Minneapolis.
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