ST. PAUL, Minn. (KMSP) - The Archdiocese of St. Paul and Minneapolis has filed a bankruptcy reorganization plan that creates an initial fund of $65 million to pay victims of clergy abuse. The plan also includes a $500,000 fund to cover counseling services for survivors of abuse. Attorney Jeff Anderson, whose firm represents hundreds of abuse victims, called the plan “egregious.”
Tuesday, the victims of abuse and the creditors’ committee filed a motion in federal bankruptcy court that claims the archdiocese is hiding assets from the court and the victims. They claim the archdiocese and its parishes have more than $1.7 billion in assets -- far more than the $45 million divulged in court documents last year.
In a letter to the Catholic community, Archbishop Bernard Hebda said he believes the plan is fair, but “we also know that some well-intentioned people may raise objections.”
Letter from Archbishop Hebda
Dear Brothers and Sisters,
On January 16, 2015, the Archdiocese filed for bankruptcy. Today, I write to tell you that we have filed a Plan of Reorganization as part of that bankruptcy process. Filing the Plan is an important and required step on our path to a fair resolution.
In preparation for filing the Plan, the Archdiocese sold available real estate assets, including our properties in Saint Paul, we will be leasing less expensive office space, and we have continued to cut our budget. For over a year, we have worked cooperatively with others. We have also participated in mediation to help determine the value of insurance coverage. Although progress has been made, the insurance companies and attorneys for those asserting claims of sexual abuse have not been able to agree on the proper value of the insurance proceeds for the claims. According to attorneys for claimants, the claims are worth hundreds of millions of dollars. The insurance companies disagree and place the value much lower.
Our Plan stands on three pillars. First, the unprecedented Settlement Agreement last December with the Ramsey County Attorney, which is incorporated into the Plan to ensure that we continue to do all we can to protect children. Second, the funding of a $500,000 victim counseling fund to promote healing for those who have suffered abuse. And third, the creation of an independent Trust. The Archdiocese has proposed that the Trust will initially be funded by $65 million or more in proceeds from Archdiocesan cash and the sale of our properties, proceeds from insurance settlements, and contributions of insurance settlements from our parishes. In addition, all insurance proceeds, including those that have not yet been agreed upon between the insurance companies and those filing claims, will be put in the Trust. A court-appointed Trustee will then control the Trust and have the authority to pay claimants.
Victims/survivors cannot be compensated until a Plan of Reorganization is finalized and approved. The longer the process lasts, more money is spent on attorneys’ fees and bankruptcy expenses; and, in turn, less money is available for victims/survivors. In other dioceses, that approval process has taken years. For example, in Milwaukee, the process took more than five years and only $21 million was available to compensate claimants. We are submitting our Plan now in the hope of compensating victims/survivors and promoting healing sooner rather than later.
While we believe that this Plan is fair, we also know that some well-intentioned people may raise objections. Reorganizations sometimes involve modifying an initial Plan. We are committed to working earnestly with everyone involved to find a fair, just and timely resolution.
This week, some attorneys claimed that we failed to disclose all of our assets in the bankruptcy case. Let me be clear: The Archdiocese has disclosed all of our assets and has followed all of the rules set forth by the Court and all directives from the judge. I know that for at least the last 11 months we have been working extremely hard to marshal and maximize our assets with the hope of providing the most for the most.
We will never be able to undo the harm caused, but, we will compensate those harmed, help in any way we can with their healing, and create and maintain safe environments for all children today and always.
I thank you for your support as we move forward with full awareness of our past and a commitment to a better future, and I ask for your continued prayers and support for all victims of sexual abuse and their families.
Sincerely in Christ,
Most Reverend Bernard A. Hebda
Archbishop of Saint Paul and Minneapolis
Statement from Jeff Anderson and Associates
Today, in United States Bankruptcy Court, the Archdiocese of Saint Paul and Minneapolis filed its reorganization plan. The plan outlines several egregious proposals, including a contribution of approximately $30 million dollars, less than two-percent of the Archdiocese and its parishes assets, to compensate survivors of child sexual abuse.
These actions have proven the Archdiocese’s pledge to put survivors first to be hollow and their pledge to be transparent to be shallow. After the Archdiocese pledged to care for the survivors and treat them fairly through the bankruptcy process, the plan filed today makes it glaringly clear that the Archdiocese is continuing its underhanded ways to avoid transparency and accountability.
In the court filing today, the Archdiocese values the Cathedral of St. Paul at $0, but insurance documents from 2008 that were not publicly disclosed, lists its value at $68 million. The plan also lists Benilde-St. Margaret’s, Totino-Grace, and De La Salle High Schools as having no value. Additionally, the Archdiocese releases several entities from the bankruptcy, including all parishes and other Catholic entities.
On Tuesday, the Creditors’ Committee and survivors filed a Motion for Substantive Consolidation in response to multiple legal maneuvers the Archdiocese used to hide and shield its assets from the court, survivors and the public. The evidence showed the Archdiocese and its parishes have over $1.7 billion in assets.