Judge denies Twin Cities archdiocese bankruptcy plans

|Associated Press

ST. PAUL, Minnesota — An attorney for victims of clergy sex abuse said Thursday that a judge has ordered all sides back to mediation in the years-long bankruptcy case of the Archdiocese of St. Paul and Minneapolis, but he said the ruling will quicken the process of getting payments to victims.

The judge denied both the archdiocese’s reorganization plan and a competing plan submitted by a creditors’ committee before ordering all sides back into negotiations, St. Paul attorney Jeff Anderson said. The archdiocese filed for bankruptcy protection in 2015, as it faced an onslaught of new abuse allegations.

Anderson said the judge’s decision means “there will be a speedier resolution” than either plan could have offered.

In a statement Thursday, the chair of the archdiocese’s reorganization task force, Tom Abood, said the decision “bolsters our resolve to move forward in the bankruptcy process.” Abood said the archdiocese looks forward to participating in mediation “to bring a prompt and fair resolution.”

The plan from the archdiocese included a fund of more than $155 million for abuse victims who filed claims in bankruptcy court. The bulk of that money comes from insurance payments. A plan by the survivors’ committee calls for the archdiocese to increase its contributions to the victims’ fund to at least $80 million.

In May, an overwhelming majority of the abuse victims voted in favor of a plan submitted by the creditors’ committee.

In his orders denying both plans, U.S. Bankruptcy Judge Robert Kressel cited the abuse victims’ overwhelming rejection of the archdiocese’s plan, and said the creditors’ committee plan relies heavily on the success of future litigation to fund the plan and pay some creditors.

Last year, Kressel declined to include parishes and other church properties among assets in the archdiocese’s bankruptcy. The committee representing abuse victims wanted to consolidate the assets of various entities in the archdiocese, which would have meant more money to pay victims’ claims.

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