17 May 2011

Catholic diocese bankruptcy settlement plan seeks to reinstate pensions for two priests who abused children

Associated Press   -  May 16, 2011

Judge holds hearing in Delaware diocese bankruptcy

Written by  RANDALL CHASE, Associated Press

WILMINGTON — A federal bankruptcy judge indicated Monday that he is willing to approve documents outlining the Catholic Diocese of Wilmington’s proposed reorganization plan, including a $77 million settlement with nearly 150 alleged victims of priest sex abuse, once certain revisions are made.

Among other things, the judge said at a hearing Monday that he wants the diocese to clarify its plans for paying pensions to priests, including those who are confirmed child abusers.

In 2009, the diocese requested authorization to provide pension and medical benefits to six priests who were among those identified by the late Bishop Michael Saltarelli as having substantiated allegations of child abuse. But alleged victims of priest sex abuse objected, and the diocese agreed not to provide benefits to those priests for the duration of the bankruptcy case.

But according to attorneys for the diocese, the settlement plan contemplates that two confirmed child abusers, Douglas Dempster and John Sarro, would have their pension payments reinstated.

Judge Christopher Sontchi said he wanted the diocese to add language to its disclosure statement, which explains the reorganization plan to creditors who must vote on it, to specifically address the restoration of benefits for abusive priests.

Sontchi also directed the diocese to spell out how much individual parishes are contributing to the settlement, and how much they stand to receive from a pooled investment account shared with the diocese. The judge ruled last year that funds held in trust by the diocese on behalf of the parishes were commingled with the diocese’s own non-trust funds and would be considered part of the diocese’s bankruptcy estate.

The judge also said Monday that the diocese needs to clarify the extent to which the parishes would be releasing legal claims against the diocese as part of the settlement.

But he declined a request by certain creditors to force the diocese to disclose the assets and net worth of each of its parishes, to help them decide if it made sense to grant the release of legal claims as envisioned in the settlement.

“I don’t believe that it would be helpful or necessary to supply the net worth numbers for the parishes, on a parish-by-parish basis,” Sontchi said.

Diocese attorney Robert Brady told Sontchi that simply listing the assets of each parish would be misleading as far as providing creditors accurate financial information, and he indicated that undertaking a valuation analysis for each parish would be a difficult proposition.

“How do you value a church property?” he asked.

At the close of the hearing, Brady said he hoped to provide the judge a revised disclosure statement that has the consent of other attorneys in the case later this week.

The diocese sought bankruptcy protection in October 2009, on the eve of a series of trials involving child sex abuse lawsuits.

In the proposed settlement, the diocese agreed to pay roughly $77 million to some 150 alleged abuse victims. In return, the diocese, its parishes and affiliated entities would be released from all legal claims related to the church sex abuse scandal.

In a key victory for abuse victims, church officials also agreed to turn over internal church documents detailing how the diocese handled pedophile priests, who in many instances were allowed to continue to prey on children for years after their abuse became known.

Brady said the non-monetary provisions included in the Wilmington diocese’s settlement plan were the most extensive in any Catholic diocese bankruptcy.

But Donald Detweiler, an attorney for the diocese’s official committee of lay employees, who are concerned about the future of their pensions, urged Sontchi to reject the diocese’s disclosure statement. He said it left creditors with too many questions unanswered, and that the reorganization plan is “patently unconfirmable.”

“The (abuse) survivors have finally gotten a settlement, and it’s long, long overdue ... but we have lay employees here and we have other creditors who are also entitled and have rights and claims in this case,” he said.

The Wilmington Diocese covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics.

This article was found at:


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  1. Catholic diocese to file for bankruptcy protection

    by Matt Volz, Associated Press January 31, 2014

    HELENA, Montana (AP) — The Roman Catholic Diocese of Helena planned to file for bankruptcy protection Friday as part of a proposed settlement of $15 million for hundreds of victims who say clergy members sexually abused them over decades while the church covered it up.

    Diocese spokesman Dan Bartleson said the bankruptcy reorganization plan comes after confidential mediation sessions with the plaintiffs' attorneys and insurers, resulting in the deals to resolve the abuse claims.

    The settlement details are being worked out, but the U.S. Bankruptcy Court in Montana would be responsible for approving and supervising the disbursement of $15 million to compensate the 362 victims identified in the two lawsuits.

    In addition, at least $2.5 million will be set aside for victims who come forward later, Bartleson said.

    The church anticipates paying at least $2.5 million of the costs, with the rest paid by insurers, which were part of the settlement talks, he said. Bartleson said the diocese does not expect to have to liquidate any of its assets or close any programs because of the filing.

    Bishop George Leo Thomas apologized to the victims in a statement and said most clergy members who were credibly accused have died, and none remain in active ministry. The diocese has set up abuse-prevention programs, including worker screenings, a claims-review board and a hotline to report abuse, the statement said

    Thomas said the settlement may make the church poorer, but it will remain committed to its mission.

    "Once the reorganization proceedings conclude, we will be able to plan confidently for future ministry for the people of the Church of the Diocese of Helena," he said in the statement.

    The victims and creditors will have the chance to vote on the proposed settlement, Bartleson said.

    Molly Howard, an attorney for the plaintiffs, said she believes the bankruptcy process will resolve the case more quickly than years of litigation and trials with uncertain outcomes.

    "Given the age and ill health of many of the victims, this is in their best interest," Howard said.

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  2. The Helena diocese is the 11th in the nation to seek bankruptcy protection in the face of sex-abuse claims

    The two lawsuits filed in 2011 claim clergy members groomed and then abused the children from the 1940s to the 1970s. They claim the diocese shielded the offenders and knew or should have known the threat they posed to children.

    The plaintiffs, the diocese and the Ursuline Sisters of the Western Province, another defendant, began mediation talks in 2012, but the talks faltered with legal challenges by the church's insurers over the claims they are obligated to cover.

    A court hearing was scheduled for Friday ahead of the first civil trials, which were to begin in March. Howard said she expects the court proceedings will be suspended.

    The diocese's territory covers all or part of 23 counties in western Montana and employs about 200 people in its parishes, schools and social-service programs. It was created in 1884, five years before Montana became a state, and covered the entire state until the Diocese of Great Falls was formed in 1904, according to the Helena diocese's website.

    The Diocese of Great Falls-Billings now covers the eastern half of Montana.

    In one of the lawsuits, the plaintiffs said they were repeatedly raped, fondled or forced to perform sexual acts while at school, on the playground, on camping trips or at the victims' homes.

    The second lawsuit, filed a week after the first in 2011, contained similar allegations against priests, but also alleged that nuns at the Ursuline Academy in St. Ignatius abused dozens of Native American children.

    The plaintiffs, the diocese and the Ursulines had pledged to work together to settle the lawsuits, and they have participated in three mediation sessions.

    The Ursulines are not part of the proposed settlement, the diocese said.

    The diocese's "tenuous" financial condition has already resulted in about a 3% reduction in staff and it has curtailed many parish building projects, he said