Bankruptcy judge confirms Milwaukee Archdiocese reorganization plan

Bruce Vielmetti reported on today's hearing in U.S. Bankruptcy Court, at the Milwaukee Journal Sentinel. Tens of millions went or will go for attorneys' fees, but there were also downsides.

"The bankruptcy plan will pay about $21 million to survivors — of which their own lawyers will take a share — and set up a $500,000 fund for continued therapy.

"An additional $8 million will pay the archdiocese's legal fees plus those of the creditors' committee. That's on top of about $12 million already paid out. Two dozen attorneys appeared before Kelley on Monday.

"On the other side of the deal, the archdiocese, its parishes, schools and other institutions all get released from liability for future lawsuits relating to sexual abuse claims that were, or could have been, part of the Chapter 11 case. The archdiocese will emerge with $7 million of debt, according to Archbishop Jerome Listecki."

A source of hard feelings is at the bottom line.

"About 350 will get payouts determined by a mediator. If the remaining money were distributed evenly, they would each get about $58,500. Abuse survivors in the other Catholic bankruptcies have gotten an average of $300,000, according to advocates."

The $20 million in legal fees works out to about equal to that $58,500 each.

For a more striking comparison, back in late August 2006 our Archdiocese settled a California case involving claims of ten people sexually abused by transferred priests for a total of $16.65 million. A little over half that was paid by its insurers, and paying the rest was what necessitated mortgaging the Cousins Center. (See Life after ‘terrible storm clouds of California’ by Brian T. Olszewski in the Milwaukee Catholic Herald, Sept. 7, 2006.) I note that that case also involved our Archdiocese coming up with a lot more money very late in the case.