Abp. Listecki on SNAP/creditors sniffing around parishes for money

SNAPs vision of Milwaukee parishes

Whenever there is news on our Chapter 11 bankruptcy proceeding, I try to keep you updated. I don’t want to overwhelm you with constant emails, but I am trying to be mindful of the need for the people of the archdiocese to have up-to-date information directly from me.

Several things have happened over the past weeks. A variety of motions have been filed and media has reported about the creditors trying to expand their demands onto parish assets and monies.

The parishes are separately incorporated entities and have been since the 1800s. The separate incorporation status and structure of parishes is actually directed by Wisconsin State Statutes, originally adopted in 1876, so any attack on them is frivolous. That being said, it’s not surprising that these efforts are underway since the assets of the archdiocese are very limited. It is the cost of these legal maneuvers that is disappointing. It is the parishes that have to absorb the added expense of acquiring legal counsel for something they had nothing to do with.

The way bankruptcy works is the “debtor” (in this case, the archdiocese) pays the lawyers on both sides. Every time the creditors’ committee files a motion, we are obligated to respond. Then a hearing is scheduled, discovery or research is undertaken, “experts” are hired by the creditors’ committee, and witnesses are called to testify. So while the case drags on, the archdiocese is forced to spend literally millions of dollars on attorney fees for the lawyers representing the archdiocese, as well as those representing the creditors’ committee.

Typically in a Chapter 11 proceeding, the creditors’ committee legal fees are about 20 percent of the total fees of the proceeding because it is the debtor that directs the majority of the process. However, in this proceeding, the creditors’ committee attorneys and their experts have already tallied more than $4 million in fees. That’s more than 50 percent of the $7 million-plus already spent on legal and professional fees.

Some have said this wouldn’t be the case if the archdiocese wasn’t fighting the creditors at every opportunity. But here’s the truth. The creditors’ committee is represented by attorneys from California who have followed a similar legal strategy in other diocesan bankruptcies across the country. Also involved is Jeffrey Anderson, a tort attorney from Minnesota who has been suing the Catholic Church for decades. He will receive his 40 percent contingency fee from whatever is the final settlement.

Some people have said we should simply pay people a settlement. Arriving at a settlement figure was one of the reasons we entered into mediation earlier this fall and also back in 2010 before we were forced to file for Chapter 11. Before Chapter 11, we offered 15 claimants $4.6 million dollars. Suffice it to say, today the demands have grown. Simply put, we cannot pay money we don’t have or attempt to use money that doesn’t belong to us in order to meet the demands of the creditors’ committee. Even the creditors’ committee attorneys have acknowledged the limited and dwindling resources of the archdiocese.

The crime of sexual abuse is a heinous one and the actions of the priests who committed these crimes were horrific. That such abuse was perpetrated by priests and that some of these priests were reassigned was covered extensively in the media in the 1990s, long before the frenzy of media coverage re-emerged in 2002.

We understand the effects of the abuse people suffered are long lasting. Even though the abuse claims would not have stood the test of the statutes of limitations, the archdiocese voluntarily instituted an independent mediation system (in 2004) to provide support and attempt to bring resolution to those who had been harmed. Many abuse survivors (almost 200) [tragic] received spiritual, therapeutic and financial assistance. In fact, one of the first motions filed by the archdiocese in the Chapter 11 proceeding was to ask the court for permission to continue to pay therapy costs and structured settlements for abuse survivors.

continue at ArchMil