5/15/2012: Update to Chapter 11 Proceedings

Note: this originally appeared as the May 15, 2012 "Love One Another" email sent to Catholics throughout the Archdiocese of Milwaukee by Archbishop Jerome E. Listecki. If you are interested in signing up for these emails, please click here. 

Anytime I anticipate that there will be news about our Chapter 11 proceeding, I want to be sure to connect with you to explain what we are doing and why we are doing it.

You’ll recall that more than 570 claims were filed in the bankruptcy proceeding and in order to prepare the Archdiocesan Plan of Reorganization, it is important for us to know which of these claims qualify for compensation under the bankruptcy laws. The only way to determine this is by filing what is called an “objection to claim” motion with the court.  If a particular claim or type of claim is not going to be allowed, then people need to know this.

For example, some claims have been filed that simply should not qualify for financial compensation from the archdiocese. These claims describe incidents that are not sexual abuse or make allegations against a religious order priest or a lay person who was not an employee of the archdiocese. Others are claims by individuals who previously reached a legal financial settlement with the archdiocese. In addition, the abuse claims are past the statute of limitations.

Some of these motions have been ruled upon by the bankruptcy judge and they have been appealed to the district court. Decisions on other motions are scheduled to be determined by the bankruptcy court sometime in August and even then we won’t have a final answer because those decisions will likely be appealed.

In an attempt to move the proceeding forward, the archdiocese has filed what is called a “motion for withdrawal of the reference” with the federal district court.  In the motion, the archdiocese asks that the seven objections to claim motions currently with the bankruptcy court be heard and decided by the district court, which is the same court that hears any appeals of decisions by the bankruptcy court. There are three main reasons for doing this.

First, it will speed up the case and promote judicial efficiency. By August, more than a year-and-one-half will have passed since the archdiocese filed its Chapter 11 petition. Since the district court will hear the appeals anyway, we might as well move things along and let the district court answer these questions now – it’s simply faster this way.

Second, it will save money. Without a definitive decision, the Chapter 11 proceeding will cost more – both in time and money. The archdiocese has limited resources and the longer it takes to determine what claims are eligible, the less money will be available.

Third, it will assist with the determination of which of the other claims are eligible for compensation. This is the most important aspect to be determined so a Plan of Reorganization can be drafted, allowing us to carry on the essential ministries and services of the archdiocese and pay what we can to eligible claimants.

Some will criticize us for doing this, saying it is an attempt to deny abuse survivors justice, and that every claim, regardless of what it alleges or how old it is, should simply be paid. The reality is that in each of these circumstances these types of claims are simply not allowed under bankruptcy law.

Some will say we should simply negotiate or go to mediation to settle all the claims. We could (and you’ll remember that I initiated mediation to settle the existing claims prior to filing Chapter 11), but that would not change the priority of determining which claims are eligible for compensation. Settling ineligible claims is an injustice to abuse survivors with eligible claims.

However, I remain committed to providing therapy and counseling for abuse survivors of diocesan priests, regardless of whether their claim is eligible for compensation in the Chapter 11 proceeding and I will only agree to a Plan of Reorganization that maintains our ability to provide therapy and counseling assistance to these abuse survivors. The archdiocese will ask the court to allow us to create a fund that would provide resources for therapy and counseling as long as such a need exists. We do this not because we are required to do so, but because our faith calls us to do so. I will insist that our ability to continue counseling and therapy for abuse survivors remains intact.

It is the archdiocese that, for decades, has voluntarily provided therapy and counseling assistance to survivors regardless of when abuse occurred; that established new standards for sexual abuse prevention; that dealt with perpetrators by removing them from ministry and publicly posting the names of clergy with substantiated allegations; and that requires safe environment education – all higher standards than any other institution in our society and all standards I pledge to continue.

I apologize for this LOVE ONE ANOTHER being longer than a regular message however, I wanted you to be aware of why in our legal process we pursue this course. Please remember, if you want more information about the Chapter 11 proceeding, the latest information is always posted online here.

Please keep all involved in this proceeding, especially abuse survivors, in your prayers, and as we continue our Easter journey toward Pentecost, may we always remember Jesus’ commandment to LOVE ONE ANOTHER.