Claims against St. Paul Archdiocese Flood in As Deadline Approaches
By Elizabeth Mohr
With the filing deadline weeks away, claims against the Archdiocese of St. Paul and Minneapolis are flooding into bankruptcy court. So far, more than 230 claims have been filed for a total of about $7.5 million in requested compensation -- not including claims that list no dollar amount. Some are from retailers, some from government agencies (like the IRS), a couple from clergymen and others from financing firms. More than 170 of the claims are on behalf of sexual abuse victims. And more than 25 churches had filed claims by Thursday afternoon -- 14 filed Thursday alone -- seeking indemnification against damages from lawsuits, with more filings by the hour. The Aug. 3 filing deadline was established by the court in April despite objections and is being challenged once again. The Official Committee of Unsecured Creditors on Thursday asked the court to consider extending the deadline by nine months. The archdiocese filed for Chapter 11 bankruptcy reorganization in January, citing an operating deficit and clergy sex abuse lawsuits. At the time, the chancery listed assets totaling more than $45 million, including about $11 million in real estate, and liabilities of about $15.9 million, according to court documents. The archdiocese had weathered about two dozen clergy sex abuse lawsuits and faced more because of a 2013 legislative move to reopen the statute of limitations for such suits. Church officials called the bankruptcy the best option to address pending and future claims of clergy sexual abuse "fairly and with finality U.S. Bankruptcy Judge Robert Kressel immediately ordered the archdiocese into mediation with its creditors -- including abuse victims -- and insurance companies. There have been disputes over what the insurance policies will cover when it comes to abuse claims and settlements. Because parishes here are independent bodies, they could face liability related to the abuse claims. As a preemptive measure, many churches are filing claims against the archdiocese to protect themselves from that liability. "The priests were in the parishes in most cases, and because the parishes are separate entities with their own insurance ... the abuse victims could file claims against the parishes," said attorney Mary Jo Jensen-Carter, who represents 120 parishes. "They haven't done that yet, but we're trying to prepare for if they do. We're asking that the archdiocese indemnify the parishes for those damages." Jensen-Carter expects most of the archdiocese's 187 parishes to file claims. But that's nothing to get too excited about, she said. "It's just really the ordinary course of business," she said. "Everybody knows the parishes are creditors. ... So it's just everybody doing what they're supposed to do in a bankruptcy." Claims filed will stand as-is unless an objection is filed. The deadline for filing claims, including claims of clergy sexual abuse, is Aug. 3. Kressel set the Aug. 3 deadline as requested by the archdiocese, despite objections from the creditors committee, which pointed to the state law extending the statute of limitations to next year. In 2013, the Minnesota Legislature passed the Child Victims Act, which opened a three-year window for victims to file lawsuits stemming from abuse that happened many years ago. That window closes May 25. Because pending lawsuits or claims against the archdiocese are now part of the bankruptcy case, the court set its own deadline for victims' claims. The creditors committee raised the issue again Thursday and filed a motion asking Kressel to extend the deadline to align with the legislative one. The committee argued that the archdiocese and its parishes have not been fully compliant with the court's notification order, saying efforts to publish notices have been subpar or misplaced. There will be a hearing July 30. Elizabeth Mohr can be reached at 651-228-5162. Follow her at twitter.com/LizMohr. Contact: emohr@pioneerpress.com
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