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	Delaware Courts: Roman Catholic Diocese of Wilmington Files New Plan to Exit Bankruptcy By Sean O'sullivan News Journal April 23, 2011 http://www.delawareonline.com/article/20110423/NEWS01/104230319/Diocese-files-new-plan-to-exit-bankruptcy?odyssey=tab|mostpopular|text|FRONTPAGE WILMINGTON -- The Roman Catholic Diocese of Wilmington this week started what should be the beginning of the end of a long legal tangle involving dozens of priest sex-abuse lawsuits and a declaration of bankruptcy in October 2009 by filing an amended bankruptcy plan with the court. The plan makes official a settlement with survivors, announced in February, creating a $77.4 million in a fund to compensate those who had been assaulted or molested as children by members of the clergy and clears the way for the diocese to emerge from Chapter 11. "There are a few issues we are still working on, but we are guardedly optimistic," said attorney Thomas Neuberger, whose law firm is representing most of the approximately 150 individuals with pending lawsuits against the diocese or one of its parishes. Lawsuits involving independent religious orders are not a part of the settlement. Diocese attorney Anthony Flynn sounded a similar note of cautious optimism and agreed that the bankruptcy process could be completed by late summer or early fall. If all goes according to plan, according to Neuberger and Flynn, a hearing finalizing the proper legal notice to creditors will be held in June or July, followed the next month by a vote by all the creditors on the reorganization plan and then a confirmation hearing in late summer or early fall, with priest sex-abuse survivors receiving compensation shortly thereafter. One significant block of creditors -- the diocese's lay pensioners -- are expressing displeasure with the plan turned in to U.S. Bankruptcy Judge Christopher Sontchi and appear ready to oppose it. Attorney Donald Det- weiler, representing retired diocese employees, charged that the pension plan is severely underfunded and that the bankruptcy plan submitted this week does little to fix the problem. "There is a lot of uncertainty as to the future of the pension plan and if it will get paid in full," he said. Detweiler acknowledged that the problems with the pension pre-date the diocese settlement with victims of priest abuse and said the pensioners support settling with the survivors of priest sexual abuse but said the employees should get what they were promised. "This is a long-term problem the diocese has had which only came to light as a result of the bankruptcy," he said. The problem, Detweiler said, is that the diocese mixed in money for pensions in a pooled investment account. And a significant amount of money from that pooled account is going toward paying the settlement. Though the plan submitted this week sends an additional $5 million to the pension plan, with annual payments of $2 million a year after that, according to Flynn, Detweiler said he believes the pension plan is still underfunded by about $60 million. Detweiler said the diocese has not met with pensioners to discuss the matter and should be "ashamed of how it mismanaged the Lay Employee Pension Plan over all those years." Flynn responded that the diocese has met with the committee representing lay employees "going back to July of last year and many times since then," and added that getting approval from the lay employees is "a high priority." Flynn said the current plan is sufficient to sustain the pension plan but agreed that "there needs to be a longer-term solution" Neuberger said it was not his place to get involved in the pension battle and believes that the issue could possibly be severed from the rest of the bankruptcy plan. Flynn said he is certain the pensioners' concerns will be addressed and all sides will agree going forward. "But we haven't gotten there yet," he said. As part of the settlement announced in February, the diocese will be liquidating a $53 million fund that had been set up more than 80 years ago by John J. Raskob to aid the Wilmington diocese in its ministry. And last week, the diocese also announced layoffs of 22 employees, including the entire staff of the diocese-operated Dialog newspaper, which will cease operations in the fall. The diocese will also end the parish social ministry and the adoption program that had been operated by Catholic Charities. Diocese officials, including Bishop W. Francis Malooly, said the layoffs and an across-the-board 25 percent reduction in the diocese budgets are painful but said the essential work of the church will remain intact in the parishes and diocese schools, which will not be subjected to the cutbacks. Contact Sean O'Sullivan at 324-2777 or sosullivan@delawareonline.com
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