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	Diocese Offers Abuse Victims $74m in New Plan By Rachel Feintzeig Wall Street Journal January 12, 2011 http://blogs.wsj.com/bankruptcy/2011/01/12/diocese-offers-abuse-victims-74m-in-new-plan/ The Roman Catholic Diocese of Wilmington debuted a new bankruptcy plan this week, hoping to woo creditors with a bigger pot devoted to sexual-abuse claims. Anthony Flynn, a Young Conaway Stargatt & Taylor attorney representing the diocese, Tuesday called the proposal - a revamped version of the Delaware diocese’s initial plan, introduced in September - an “unusual two-headed plan.” It gives creditors a choice between sharing a $74 million trust, funded by both the diocese’s assets and assets from other Catholic institutions, and a smaller, diocese-only trust that could amount to as little as $15 million. In order to tap the larger pot, creditors would have to agree to abandon litigation against the diocese, including their individual sexual-abuse claims and a lawsuit by the unsecured creditors committee in the case aimed at the diocese’s pooled investment account. In return, abuse victims would see an average payout of $750,000, according to the diocese. An attorney for the unsecured creditors committee wasn’t available for comment, but Flynn acknowledged that attorney Thomas Neuberger, who represents most of the purported victims, had taken aim at the revisions, calling them misleading and cheap. Still, Flynn insisted that the settlement offer was the best way forward for everyone involved in the case, saying it would put a stop to the $800,000 in administrative expenses the diocese is racking up each month and wrap up litigation that could take years to wind its way through the courts. “We’ve got to get out of this bankruptcy that is killing us on administrative expenses,” Flynn said in an interview Tuesday. He acknowledged that last month’s decision by a Delaware jury to award $30 million to a victim of clergy sexual abuse who was suing a former priest and St. Elizabeth Roman Catholic parish pushed the company to reconstruct its plan. “The verdict in that case clearly was a spur to us to try to find whatever way we can to get out of this bankruptcy,” Flynn said. A hearing on the company’s new disclosure statement, or plan outline, is tentatively set for Feb. 15, Flynn said. The Wilmington diocese entered bankruptcy protection in October 2009 on the eve of the trial of a clergy sexual-abuse lawsuit. The company and its creditors have been in mediation since late June, but eight lengthy sessions have failed to birth a resolution that’s found favor with all sides. In total, the diocese faces 149 total claims of clergy sexual abuse, according to Flynn, including claims against diocesan, parish and religious order priests, such as those who taught in Catholic schools.
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