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	Fairbanks Diocese to Pay Millions for Abuse Molestations: Bankruptcy Court Helps Settle Claims for Nearly 300. By Lisa Demer News Tribune November 25, 2009 http://www.thenewstribune.com/news/northwest/story/967865.html Alaska victims of sexual abuse by Catholic priests and volunteers from the Fairbanks diocese could finally receive payments early next year for the damage done long ago, though many of the details of the bankruptcy settlement have yet to be worked out. Lawyers for the Fairbanks diocese and representatives of almost 300 creditors, most of them sex abuse victims, said Tuesday in U.S. Bankruptcy Court that they've agreed to a nearly $10 million settlement. The amount available to pay victims could grow considerably, depending on the results of efforts to extract up to $100 million from two insurance carriers that are not part of the settlement, said Ken Roosa, an Anchorage attorney who represents 240 victims trying to collect through the bankruptcy case. Those two insurance companies had refused to participate in the negotiations, Roosa said. The Catholic Bishop of Northern Alaska, the formal name for the diocese, turned to bankruptcy in March 2008 after efforts to settle numerous sexual abuse lawsuits failed. Under the settlement, the diocese would resolve the cases and would sell some property, but would not have to close any parishes. Specific amounts to individuals aren't yet set and will be determined case by case, depending on the abuse suffered. People with marginal claims of mistreatment that don't relate to sexual abuse may not get anything, Roosa said. Bankruptcy Judge Donald MacDonald still must approve the terms. An earlier plan, submitted in October, provided $11 million, but that included the cost of the bankruptcy lawyers and experts. Roosa -- who isn't a bankruptcy lawyer -- said the victims would have ended up with less than under the new proposal. "This is clear cut. This is 9.8 million hard dollars, guaranteed money," Roosa said after the hearing. A portion will be set aside to pursue the potential big payoff from the insurers. But most will go to victims. "That is for them," Robert Hannon, chancellor for the Fairbanks diocese, said of the $9.8 million. The proposed settlement with the creditors is "an important milestone," he said by phone. Susan Boswell, the Tucson, Ariz.-based lead bankruptcy lawyer for the diocese, provided a broad outline of the new settlement proposal in court Tuesday. A more detailed plan will be filed in court next month. She told MacDonald resolution has been a long time coming. "The important thing is to keep the process moving," Boswell said. If the bankruptcy case is not settled, lawyers and other professionals will keep racking up fees. Her firm as well as others have agreed to reduced rates to settle the case. Under the proposal, the diocese will pay the bankruptcy lawyers separately from the $9.8 million victim fund. At Tuesday's hearing, more than a dozen lawyers from around the country participated by phone and others were in the Anchorage courtroom. Roosa first notified the diocese of a sexual abuse complaint in 2002. Some of the claims stretch back to events that happened decades ago and involved priests now long dead. Some are more recent. Many claims are against one man: the late church volunteer Joseph Lundowski, accused of molesting dozens of children in Western Alaska villages in the 1960s and 1970s. "I do not exaggerate," Roosa told MacDonald on Tuesday. "People have died waiting for this case to end." The bulk of the $9.8 million in the proposal would come from the diocese, which plans to sell some of its properties to a church endowment. One carrier, Alaska National Insurance Co., that participated in negotiations has agreed to pay $1.4 million. The diocese couldn't locate a liability policy for another carrier, Continental Insurance Co. But claims involving two other carriers, Travelers Casualty and Surety Co. and Catholic Mutual Relief Society of America, are still pending. Lawyers for Travelers didn't call in to the teleconferenced court hearing in time and were frantically e-mailing other lawyers as it went on without them. Lawyers for Catholic Mutual said they were concerned because the new plan wasn't even filed in court. "We hope that with our combined efforts we can encourage insurers to step up to the plate and fulfill their obligations," Hannon said. Under the earlier plan, each victim would have received a minimum of $5,500, and those who suffered serious abuse would have gotten larger awards. But representatives of victims said that was too little. Elsie Boudreau, an abuse victim turned advocate, last month called the earlier offer "a second rape." Hannon responded that the rhetoric was "false and inflammatory," and not helpful. The settlement came about with the help of a professional mediator from San Francisco, William Bettinelli, who various lawyers said worked tirelessly on the case. Boudreau, who won $1 million in her own abuse case, seemed satisfied Tuesday at the progress. "It's a big step in the right direction," she said. Hannon, speaking for the diocese, seemed pleased, too: "We have a long road of restoring trust ahead of us but we're confident that we can move forward." Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390.
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