St. Paul-Minneapolis Archdiocese Files Revised Bankruptcy Plan

by San Antonio Attorney

The revised bankruptcy plan of St.  Paul-Minneapolis archdiocese would likely double the money allocated for its creditors to about $133 million.  Notwithstanding that increase, lawyers for the 440 survivors claim that the archdiocese’s payment to the trust is not enough considering it has more than $1 billion in assets.

The revised plan would place $126 million and $133 million in a trust fund for victims of sexual abuse by clergy.  The majority of that, less than $100 million, would be derived from archdiocesan insurers.  A maximum of $6 million would be derived from the church’s general insurance fund, plus $13.7 million would be provided by parishes’ insurers.

The archdiocese is going to provide $13.8 million to the trust, plus $500,000 counseling fund for the survivors.

If the total contributions reach its maximum, the updated plan would significantly increase the settlement amount proposed by the archdiocese in May.  The additional funds would come from the insurers of archdiocese.  The archdiocese has reached 13 insurers, and 11 of them have already reached a settlement with the archdiocese.

According to court filings of the archdiocese, the unsettled claims against the two insurers could reach many millions of dollars, and would be placed to the creditor’s trust once it is paid out.  It also said that the committee of unsecured creditors found that 6 of the 11 insurance settlements — which are subject to the court’s sanction of the bankruptcy plan — are acceptable.

While initially the revised plan looks like there is lots of money, it is quite small when compared to payouts in other dioceses, according to the lawyer of creditors.

The archdiocese filed a petition for reorganization under Chapter 11 of the bankruptcy code in January 2015.  That happened soon after escalating clergy molestation scandal that resulted in the resignations of many high-level officers, many task forces, recommendations and restructurings, and criminal charges filed against the Twin Cities archdiocese.

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