The Archdiocese of Saint Paul and Minneapolis is eager to see a quick end to its reorganization plan so that victims and survivors of clerical sex abuse can see more compensation sooner, according to its bishop.
The plan of reorganization is part of the bankruptcy process, for which the archdiocese filed in January 2015.
“Victims/survivors cannot be compensated until a Plan of Reorganization is finalized and approved. The longer the process lasts, more money is spent on attorneys’ fees and bankruptcy expenses; and, in turn, less money is available for victims/survivors,” Archbishop Bernard Hebda wrote in a May 26 letter to the faithful of the archdiocese.
“In other dioceses, that approval process has taken years. For example, in Milwaukee, the process took more than five years and only $21 million was available to compensate claimants. We are submitting our Plan now in the hope of compensating victims/survivors and promoting healing sooner rather than later.”
A reorganization plan is a required step in the process of bankruptcy, and must be accepted by an entity's creditors.
Archbishop Hebda noted that to prepare for filing the reorganization plan, the archdiocese had sold real estate assets, will lease less expensive office space, and is cutting its budget.
“For over a year, we have worked cooperatively with others. We have also participated in mediation to help determine the value of insurance coverage.”
He said that while “progress has been made, the insurance companies and attorneys for those asserting claims of sexual abuse have not been able to agree on the proper value of the insurance proceeds for the claims.”
The plan of reorganization has three pillars, according to the archbishop. First is a settlement made last December which ensures child protection policies in the archdiocese, and second is a $500,000 victim counseling fund.
“And third, the creation of an independent Trust,” Archbishop Hebda explained. “The Archdiocese has proposed that the Trust will initially be funded by $65 million or more in proceeds from Archdiocesan cash and the sale of our properties, proceeds from insurance settlements, and contributions of insurance settlements from our parishes.”
“In addition, all insurance proceeds, including those that have not yet been agreed upon between the insurance companies and those filing claims, will be put in the Trust. A court-appointed Trustee will then control the Trust and have the authority to pay claimants.”
The archbishop emphasized that the archdiocese considers the reorganization plan to be fair, but that some might object to it.
“Reorganizations sometimes involve modifying an initial Plan,” he noted. “We are committed to working earnestly with everyone involved to find a fair, just and timely resolution.”
He also responded to claims by the lawyers of some abuse victims that the St. Paul-Minneapolis archdiocese had not made public all of its assets when it filed for bankruptcy.
“Let me be clear: The Archdiocese has disclosed all of our assets and has followed all of the rules set forth by the Court and all directives from the judge. I know that for at least the last 11 months we have been working extremely hard to marshal and maximize our assets with the hope of providing the most for the most.”
Archbishop Hebda concluded by saying, “We will never be able to undo the harm caused, but, we will compensate those harmed, help in any way we can with their healing, and create and maintain safe environments for all children today and always.”
Archbishop Hebda was appointed Archbishop of Saint Paul and Minneapolis in March, though he had led the archdiocese as its apostolic administrator since June 2015.
He succeeded Archbishop John Nienstedt, who resigned after the archdiocese was charged on six counts of failure to protect minors.