Archdiocese Asks Bankruptcy Court for More Time to Reorganize

By Jean Hopfensperger
Star Tribune
March 27, 2015

http://www.startribune.com/local/stpaul/297839471.html

Chancery office of the Archdiocese of St. Paul and Minneapolis in St. Paul.

The Archdiocese of St. Paul and Minneapolis has asked a federal bankruptcy court to extend its deadline for filing a reorganization plan to Nov. 30.

U.S. bankruptcy code gives the archdiocese exclusive rights to propose a reorganization plan within 120 days of petitioning for Chapter 11 bankruptcy, which it did on Jan. 16. The court can extend that “exclusivity period” for good cause.

The archdiocese argued that it needed more time to work with insurance carriers to determine liability. It entered into mediation with the carriers, abuse victim creditors and other creditors shortly after filing for Chapter 11. The bankruptcy came in response to an unprecedented wave of clergy abuse lawsuits filed since 2013.

“There are a number of difficult issues to be resolved before completion of the mediation process,” according to the notice filed this week. “In particular, it is imperative that the Archdiocese and the Committee have sufficient time to negotiate with the liability insurance carriers for contribution toward a comprehensive and global settlement and consensual plan of reorganization.

“It is highly unlikely that the negotiation of these issues will be completed in time to permit the Archdiocese to file its plan within 120 days of the petition date.”

The motion is slated to be heard April 9 in U.S. Bankruptcy Court. If approved, the extension would create a Jan. 29, 2016, deadline for the archdiocese to solicit confirmation of its exclusive plan. After that date, plans could be submitted by other parties.

The archdiocese plans to file a motion to establish a bar date, a deadline for people or companies owed money to notify the court, in April.

A final settlement can’t be completed until “the complete universe of claims is known, the parties have time and sufficient information to evaluate the claims, and the parties have time to evaluate and negotiate their settlement positions,” the motion said.

Jeff Anderson, the attorney representing most of the clergy abuse victims who are creditors in the bankruptcy proceeding, said he had no concerns about the archdiocese’s request. He called it an administrative move to help manage the bankruptcy.