Forward Motions: Helena Diocese Seeks Approval of Abuse Victim Compensation Plan

By Tom Corrigan
Wall Street Journal
February 27, 2015

http://blogs.wsj.com/bankruptcy/2015/02/27/forward-motions-helena-diocese-seeks-approval-of-abuse-victim-compensation-plan/

On Wednesday in Coeur d’Alene, Idaho, the Roman Catholic Diocese of Helena will seek a bankruptcy judge’s permission to proceed with a plan to pay $16.4 million to compensate hundreds of people who allege they were sexually abused by the diocese’s clergy.

The plan, which was largely put in place during mediation that preceded the Montana diocese’s bankruptcy filing in January 2014, calls for about 360 victims to receive a minimum payment of $2,500 each. An abuse-claims reviewer will determine the actual payment based on the severity and long-term effects of the abuse. Any future abuse claims also will be paid out of the trust.

If approved by Judge Terry Myers, the diocese’s insurance companies would contribute $14.4 million to the trust, and the diocese itself would contribute $2 million.

The plan also includes another $4.45 million from the Ursuline Sisters of the Western Province to settle a lawsuit filed by 45 Native Americans who alleged they were abused at the Ursuline Academy in St. Ignatius.

In total, 11 other Catholic dioceses have turned to chapter 11 to address waves of litigation related to alleged sexual abuse by priests and others, the vast majority of which allegedly took place decades ago.

Women’s clothing retailer Cache Inc. will learn next week whether it can find a buyer to keep the 218-store chain alive or if its bankruptcy will end in liquidation.

Bidders have until Sunday to make a play for the company, according to court filings, and Cache will hold an auction Monday if would-be buyers surface. Right now, the company has an offer from liquidators at SB Capital Group LLC and Tiger Capital Group LLC to run going-out-of-business sales in exchange for 82% of the cost-value of the chain’s merchandise, which court documents value at between $13.5 million and $15 million.

Founded in Miami in 1976, Cache traditionally focused on selling formal dresses to women in their 20s. An ill-timed expansion between 1999 and 2006 that nearly doubled the chain’s store count, to 306, and put more emphasis on sportswear harmed the brand, the company said in court filings. Cache hasn’t turned a profit since 2011.

Cache plans to update a judge Tuesday in U.S. Bankruptcy Court in Wilmington on the status of its sale. If liquidators win the day, going-out-of-business sales will likely start soon after.

Also Wednesday, the Revel Casino Hotel will return to bankruptcy court to seek approval of a settlement with Wells Fargo NA on a vigorously contested $125 million financing package for the Atlantic City, N.J., resort.

Revel recently announced it has struck a new $82 million deal to sell its 47-story beachfront tower to Florida-based developer Glenn Straub.

The revised sale represents a $13.4 million reduction from the original $95 million purchase price, which stems from a bankruptcy-court-supervised auction held late last year. Mr. Straub was initially outbid by a Canadian private-equity firm, but the deal collapsed, putting Mr. Straub in line to buy the property.

If the settlement is approved, some creditors including the operator of Revel’s utility plant —owed tens of millions of dollars, according to court papers—say the new purchase price is so low that they will be left with nothing once Wells Fargo takes its share of the proceeds.

Judge Gloria Burns will also take up a motion by the power plant that would allow it to stop providing power to Revel. The announcement prompted a strong reaction from the resort, which could be damaged by mold if its climate-control systems are shut down.

-Sara Randazzo contributed to this article.