Judge laments $15M in legal fees in St. Paul-Minneapolis archdiocese bankruptcy

The judge overseeing the bankruptcy of the Archdiocese of St. Paul and Minneapolis expressed concern Thursday over the legal fees being racked up in the case — about $15 million to date.

“It bothers me so much that all these attorney fees are being run up,” U.S. Bankruptcy Judge Robert Kressel said at a hearing Thursday, adding that legal fees are consuming funds that could be directed to survivors of archdiocese clergy sex abuse.

In an attempt to curb the spending, Kressel ordered that no expert witnesses be hired for the time being. He also ordered a tighter schedule for both parties to argue their legal objections to each other’s compensation plans.

“I’m trying to save money and time and get this decided,” Kressel said.

Kressel’s remarks came in response to the archdiocese’s proposal to “retain certain experts” to advise on the competing victim compensation plans before the court, on the value of parish contributions to the settlement, on insurance settlements and other issues, according to a motion before the court.

So the MN state legislature declares war on Catholic dioceses and then when those dioceses attempt to defend themselves they are lamented for doing so.  Well that cute judge.  Has it occurred to Judge Kressel that perhaps SNAP's consistent rejection of anything short of complete annihilation of every Catholic entity in the archdiocese might have something to do with those mounting legal fees?  The whole point of bankruptcy is that the organization be permitted to exist after completion.  Why isn't SNAP also pressured to settle in the case he is so concerned with legal fees?  It's our job to complain about mounting legal fees, for a judge to do so seems to overstep a wee bit.

The fees are high compared to other bankruptcies nationally, and the process in the Twin Cities has been long, said Chuck Zech, a church finance expert at Villanova University in Pennsylvania. The Milwaukee Diocese, considered the “mother of all bankruptcies,” spent $23 million in a protracted battle to settle with abuse victims, plus $7 million for the victims’ attorneys, he said.

“Milwaukee is the poster boy for a disastrous way to do a bankruptcy,” said Zech. “It seems to me that St. Paul is approaching that status.”

...

Last week, 94 percent of the survivors voted against the archdiocese’s plan. The plan included a victims’ compensation fund of at least $155 million — about $120 million from insurance payments — and a court order to prevent victims from filing future lawsuits against the parishes and insurers involved.

The abuse victims voted in favor of their creditors’ committee plan, which would have the archdiocese paying $80 million of its own money into the fund. The plan also seeks far bigger settlements from the insurance companies covering the abuse.

Victims’ attorneys argue there are millions more dollars available from insurance assets that the archdiocese could tap.

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