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	Lay Employee Pension Accord Clears Way for Bankruptcy Case By Beth Miller News Journal June 23, 2011 http://www.delawareonline.com/article/20110623/NEWS01/106230334/Lay-employee-pension-accord-clears-way-bankruptcy-case?odyssey=tab|topnews|text|Home When the lawyers reached an impasse, four Catholic women booked a series of meetings with Bishop W. Francis Malooly and negotiated an agreement that appears to clear away the last significant obstacle in the Catholic Diocese of Wilmington's bankruptcy case, pumping millions into the pension plan of about 2,000 lay employees. Under the agreement, announced Wednesday by the Committee of Lay Employees, the diocese will aggressively address deficits in its pension plan, adding $10 million to the $10 million Lay Employee Pension Trust by the end of this year. At least $10 million more would be added in 2016-17, with at least another $2 million added each year until full funding is reached in 2060. It was not clear where all the money would come from, but a capital campaign is expected to provide much of it. Also included is an agreement that the plan will be frozen at the end of 2011, with no additional benefits added. The deal resolves the last apparent sticking point in the diocese's 2-year-old bankruptcy case. Its creditors, including about 150 survivors of clergy sexual abuse, must vote on the amended restructuring plan by June 30. A July 8 hearing before U.S. Bankruptcy Judge Christopher Sontchi will address any other issues. The diocese filed for Chapter 11 protection in October 2009 after scores of survivors of clergy abuse filed suit under provisions of Delaware's 2009 Child Victims Act, which opened a two-year window for civil suits that would otherwise have been barred by the statute of limitations. Earlier this year, the diocese negotiated a $77.4 million settlement with abuse survivors. But lay employees, represented by attorney Donald Detweiler, said the settlement would drain the diocese's coffers, leaving vested pensioners at the mercy of a severely underfunded pension fund. Detweiler said the diocese's pension obligations were worth about $60 million -- $50 million more than the diocese offered in its first proposal. Survivors of abuse, meanwhile, were concerned that the pensioners' objections would reduce or further delay their negotiated settlement. "This agreement completely respects the settlement that was already made," said Terry Mattina, co-chair of the Committee of Lay Employees. "We support that settlement and were happy to have that in place already. We know that none of that money is going to be used." Wilmington attorney Thomas Neuberger, whose firm represents the majority of abuse survivors, said the deal was good news. "It looks like we're reaching the end of the road here with the diocese," he said. "We do not believe there are any other substantive hurdles." A commitment In a prepared statement, Malooly said the agreement represents the diocese's commitment to its employees and retirees. "The additional funding and other steps we have agreed to take will secure the lay pension plan, ensuring the retirement benefits our employees have earned," he said. "I am grateful to the members of the committee who worked hard to achieve an agreement that ensures the viability of the pension plan, while enabling the diocese to manage its obligation to fully fund the plan." With Detweiler's guidance, the women -- three Catholic school employees and an executive with Catholic Charities -- formed the Committee of Lay Employees 14 months ago, fought their way into the diocese's bankruptcy case and held out until the diocese agreed to address the pension problem. Shortfall exposed Committee member Katrina Eichler, who has worked with Catholic Charities for 41 years, said she would never have known about the hole in the pension plan if not for the financial disclosures required in the bankruptcy case. "And what kept us going was realizing that upwards of 1,900-2,000 people were relying on us to get them what they rightfully deserved, which was a pension," said Karen Warner, a committee member and teacher at All Saints Catholic School. Led by co-chairs Terry Mattina of Padua Academy and Mary Kirkwood of Immaculate Conception School, the women met with Malooly several times -- without lawyers present. Warner said she was nervous, having never met with a bishop before, but found Malooly to be a willing listener. "He said he was morally obligated to make sure that his employees received a pension. And he kept saying that. At many points I wondered how is that going to happen. And I believe it was that moral obligation on his part," Warner said. "We would have liked to see more, but we're very pleased with what we have." Never again The agreement includes further protections, establishing a Lay Pension Plan Advisory Committee to monitor the pension fund and requiring the diocese to set aside a fully secured $15 million note, payable if the pension fund falls short again. "All of us have had times when we haven't been as optimistic as we hoped, but we all stayed positive," Eichler said. "It makes this day a very successful and happy day for all of the staff that worked for the diocese." Detweiler said approval of the diocese's settlement plan -- as amended by the new lay pension agreement -- will put many issues to rest. "What happened in the past to survivors and to pensioners should not and will not happen again," he said. Contact Beth Miller at 324-2784 or bmiller@delawareonline.com.
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