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	Diocese Owes Bankruptcy Advisers $2 Million By Ann McGlynn Quad-City Times August 9, 2008 http://www.qctimes.com/articles/2008/08/09/news/local/doc489e2037123c9889596826.txt?sPos=1 The bills for the attorneys and other professionals who worked on the Diocese of Davenport's bankruptcy total just more than $2 million, records show. The largest bill came from the law firm that represented the 162 people who filed claims of sex abuse in the case. Pachulski, Stang, Ziehl and Jones of Los Angeles, the largest bankruptcy law firm in the country, billed $1.1 million. The second largest bill, $794,734, is from Lane & Waterman, the Davenport firm that represented the diocese. The smallest charge, $40,995, is from Richard Calkins. Calkins is the arbitrator who considered all of the claims, including in-person interviews with many of the victims, and decided where each would fall on the matrix that determines payment. The $2 million is just more than 5 percent of the $37 million settlement. "The fees here are remarkably low compared to the recovery in the other diocese cases," said Richard Davidson, the lead attorney for the diocese. "This was accomplished by the professional approach taken by the creditors committee and its counsel, and we commend them for it. We certainly had disagreements with the committee, but by not trying the case in the newspapers or in court, it significantly enhanced the funds available for distribution to victims." The low percentage of fees, he said, "does not benefit the diocese at all, but is completely to the benefit of the victims. We had no desire to eat up the victims' recovery by fighting out every issue to the last man standing." Some fees are not represented in the billings. For example, a private investigator who worked for the diocese to help determine the validity of claims will be paid by the diocese, Davidson said, not from the settlement. Three other dioceses have completed bankruptcies, and one settled out of court after filing. In Spokane, a $48 million settlement came with a $10 million bill for legal and professional services, or 21 percent, according to published reports and a database of charges provided by Pachulski Stang. In the Archdiocese of Portland, the $75 million settlement came along with charges of more than $19.1 million, or approximately 25 percent. In Tucson, a $22.2 million settlement resulted in $1.5 million in charges, or nearly 7 percent. The Diocese of San Diego filed for bankruptcy but settled out of court with a $198 million settlement soon after filing. The legal bills for that bankruptcy were $4.8 million. "I think that the leadership and experience of Pachulski Stang made all of the difference in the world," said Mike Uhde, who was the co-chairman of the committee for the creditors. "They had been through this, knew what pitfalls to look out for and avoided them very well. They got us through this for relatively little money compared to what the other ones have been and less than two years of the date of filing." Spokane and Portland had dragged on, Uhde said. "The money that was supposed to go to the victims ended up going to the attorneys." The Davenport diocese filed for bankruptcy in October 2006 after it lost its first civil sex abuse trial. The diocese, its insurance company and the creditors committee agreed to a $37 million settlement, with the stipulation that all Catholic entities in the diocese will be released from liability just as the diocese is. Insurance company Travelers paid $19.5 million, the deed to the diocese-owned St. Vincent Center valued at $3.9 million was turned over to the bankruptcy trustee and the diocese paid $13.5 million, including contributions from four diocesan churches and a loan. The settlement included a list of 18 nonmonetary agreements. All told, sex abuse cases in the Diocese of Davenport have cost the diocese and its insurer at least $47 million. That number includes the settlement and $10 million paid to 45 victims before the diocese filed for bankruptcy. Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com PAYMENTS DUE -- Alix Partners, claims agent, Web site administrator and financial adviser, $261,964. -- Richard Calkins, arbitrator, $40,995. -- Aurora Management, financial adviser, $47,549. -- Lane and Waterman, attorneys for diocese, $794,734. -- Pachulski Stang Ziehl and Jones, attorneys for creditors, $1,118,440.
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