Minnesota Bankruptcy Court approves St. Cloud Diocese’s reorganization plan

Minnesota Bankruptcy Court approves St. Cloud Diocese’s reorganization plan

In this 2014 file photo, U.S. dollar bills are seen at the Bureau of Engraving and Printing in Washington. (Credit: Gary Cameron/Reuters via CNS.)

Less than six months after the Diocese of St. Cloud filed its Chapter 11 bankruptcy petition, the Minnesota Bankruptcy Court has approved a plan for reorganization jointly submitted by the diocese and the creditors' committee of clergy abuse survivors.

ST. CLOUD, Minnesota — Less than six months after the Diocese of St. Cloud filed its Chapter 11 bankruptcy petition, the Minnesota Bankruptcy Court has approved a plan for reorganization jointly submitted by the diocese and the creditors’ committee of clergy abuse survivors.

This reorganization plan, approved Dec. 3, “represents the culmination of several years of respectful negotiations among all the parties involved,” St. Cloud Bishop Donald J. Kettler said in a statement. The “rapid process” for its approval “reduced the administrative expenses that would have been incurred in a longer process and preserved more funds for the survivors,” he said.

The plan provides for a $22.5 million trust to compensate survivors of clergy sexual abuse. The funds will be made up of insurance coverage settlements, $14 million; property sales, including the St. Cloud Children’s Home, $5.25 million; and contributions from parishes and a line of credit, $3.25 million. The plan also includes non-monetary protocols for the protection of children.

“I again want to apologize on behalf of the church to the survivors of clergy sexual abuse,” Kettler said. “Coming forward took a great deal of courage. The church failed them, and I hope this helps them to move further along the path of healing and peace. I remain committed to ensuring the church does everything it can to prevent sexual abuse.”

The Diocese of St. Cloud filed a voluntary petition June 15 for relief under Chapter 11 of the bankruptcy code after the diocese and abuse survivors reached agreement in May on a framework for a resolution of all clergy sexual abuse claims against the diocese and area parishes.

The diocese has a special webpage with the order confirming its Chapter 11 reorganization plan: www.stcdio.org/reorganization. The webpage includes other reorganization-related information, such as public statements, legal documents, frequently asked questions, a list of clergy likely to have abused minors, how to report abuse and safe environment resources.

In a May 26 news release, the diocese announced it had reached an agreement with survivors of clergy sexual abuse on a framework for a resolution of all clergy sexual abuse claims against the diocese and area parishes.

The agreement included anticipation of the diocese filing for Chapter 11 bankruptcy, which then took place June 15.

“This framework for resolution represents the diocese’s commitment to finding a fair resolution for survivors of sexual abuse while continuing its ministry to those it serves throughout the 16-county diocese,” the May release said.

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