Bankruptcy judge may allow vote on two Archdiocese settlement plans

A federal bankruptcy judge has indicated he may allow all parties to vote on two competing clergy abuse settlement plans against the Archdiocese of St. Paul and Minneapolis.

In a packed courtroom filled with clergy abuse victims and attorneys, Federal Bankruptcy Judge Robert Kressel heard arguments on the disclosure statement in the case.    

Attorney Richard Anderson representing the Archdiocese told Judge Kressel that they have now settled with all of the Archdiocese’s insurance carriers on dollar amounts. He did not disclose the new amount, but on Nov. 15 the Archdiocese announced they had reached an agreement with 11 of 13 insurance underwriters to increase their settlement fund to $133 million.

Victims’ attorney Robert Kugler argued that the Archdiocese settlement is not reasonable. Kugler told the judge that he believes more money is available from the insurance companies and that survivors could not evaluate the settlement disclosure without the full knowledge how much could be paid out. Additionally, Kugler suggested that the Archdiocese could borrow $38 million, hold a fundraiser, and assess parishes for settlement fund money.

But in counter arguments before Judge Kressel, Richard Anderson called the victims’ plan confusing and said it offered no sources for where the Archdiocese would borrow money. Additionally, Anderson argued that the court couldn’t force parishes to pay because they are individual corporations and separate from the Archdiocese. 

“I believe the funding mechanism of the plan is fiction,” Anderson told the court.

There was no immediate ruling from Judge Kressel on the disclosure statement, but he did advise attorneys he wants to meet on Jan. 12 to finalize ballots to allow both creditors and victims vote on the competing settlement plans.  Attorney Jeff Anderson who represents many of clergy abuse victims in the case called the vote a positive development. 

“We see his indication as a very promising sign that the voices of the survivors and the votes of the survivors will have a chance to be heard about what’s fair and what’s right and that’s all they ever wanted and yes, this is a very positive development,” said Jeff Anderson. 

The vote results will not directly determine which settlement plan is chosen, but Anderson believes it will play an important factor.

“The judge has the final say ultimately,” said Anderson. “But, how the vote comes out, how the tally is weighs heavily on what the judge can do and influences heavily on what the judge will do under bankruptcy law.”