Minnesota Archdiocese Bankruptcy Case Headed Back to Mediation
Thursday, January, 4, 2018
A request from the Archdiocese of St. Paul and Minneapolis to reorganize through bankruptcy was recently denied. The original request was filed in bankruptcy court in 2016, followed by the Creditor’s Committee’s request that the archdiocese assets be consolidated. Originally, both plans were OK’d by the court, but more than 400 abuse victims rejected that original reorganization plan.
The plan was amended after the original to require a contribution of $80 million into the pool of money that would be paid to the group of creditors, which included the victims. The plan also required the release of the investigative report concerning the former Archbishop, and required an end to the payments being made to priests who faced credible accusations of sexual misconduct. This amended plan was accepted by creditors, but rejected by the court.
The judge then ordered the archdioceses, parishes, insurance companies, and the Creditor’s Committee, that includes abuse victims, to return to mediation.
According to an attorney of the abuse victims, the ruling to return to mediation is considered a small victory for his clients. One victim told reporters he felt as if his voice had been heard because of the ruling.
A statement released by the Chair of the Reorganization Task Force of the Archdiocese of St. Paul and Minneapolis stated:
"The judge’s decision bolsters our resolve to move forward in the bankruptcy process. We are guided by his words from earlier this year, that the longer this process continues, the less money will be available for those who have been harmed…”