Parishes to Seek More Say in Archdiocese Bankruptcy

By Joseph Checkler
Wall Street Journal
March 27, 2015

http://blogs.wsj.com/bankruptcy/2015/03/27/forward-motions-parishes-to-seek-more-say-in-archdiocese-bankruptcy/

Thursday in Minnesota, about 113 parishes of the Roman Catholic Archdiocese of St. Paul and Minneapolis will argue they deserve their own voice as creditors in the archdiocese’s bankruptcy case.

Victims of alleged clergy sexual abuse and their advocates have called the parishes’ request to form an official committee “troubling,” saying another creditors’ committee would effectively give the archdiocese a place on both sides of the bargaining table.

More than 150 sexual-abuse victims have brought claims against the archdiocese since it filed for bankruptcy in January, in addition to more than 80 claims brought against individual parishes, court papers show.

Catholic dioceses have used the breathing room offered by chapter 11 to negotiate settlements with alleged victims of sexual abuse by clergy members and others, deals that can total many millions of dollars and include nonmonetary forms of compensation such as the release of long-shielded church documents detailing the alleged abuse and subsequent coverup.

Wednesday in Wilmington, Del., Wet Seal Inc. will ask a judge to approve a sale of the company to private equity firm Versa Capital Management, which plans to keep at least 140 of the teen clothing retailer’s stores open.

Versa’s winning bid at an auction, structured as a so-called 363 sale that sells off Wet Seal ’s assets and leaves the shell of the company behind to wind down in bankruptcy, includes $7.5 million in cash slated for unsecured creditors. Versa also agreed to provide $10 million in exit financing once Wet Seal leaves bankruptcy.

Wet Seal shut down more than 330 of its stores ahead of its Jan. 15 bankruptcy filing and laid off nearly 3,700 employees. The company still employs more than 2,200 workers, according to court filings.

Also on Wednesday, fellow teen retailer Delia’s Inc. will ask a White Plains, N.Y., judge to approve the sale of its Hanover, Pa., distribution center.

Conewago Contractors Inc.’s $3.68 million offer will serve as the lead bid at a Tuesday auction of the center, one of Delia’s few remaining assets. Competing bids are due Monday and must beat Conewago’s offer by at least $25,000. Conewago wouldn’t be entitled to receiving a breakup fee if another bidder successfully purchased the center.

Delia’s filed for chapter 11 bankruptcy protection in December with liquidators Hilco and Gordon Brothers already in place to sell off the inventory remaining at its stores. Those sales wrapped up at the end of last month and now Delia’s is in the process of selling the last remnants of its business.

In February, Judge Robert Drain approved a $3.5 million sale of Delia’s intellectual property to the same group of investors that last year spun off Delia’s Alloy brand.

Founded in 1993, Delia’s built a following through the wide distribution of catalogs selling colorful jewelry, clothing, shoes and other teen essentials. Last year, the business lost $57 million in the face of increased competition in the market for teenage girls’ and young women’s apparel and a “still struggling national economy,” Chief Financial Officer Edward Brennan said in court filings.

-Tom Corrigan, Stephanie Gleason and Sara Randazzo contributed to this article.