Deadline Passes for Archdiocese Bankruptcy Claims

By Elizabeth Mohr
Pioneer Press
August 3, 2015

http://www.twincities.com/crime/ci_28580039/deadlines-passes-archdiocese-bankruptcy-claims

Auxiliary Bishop Andrew Cozzens, center, walks to the podium to announce the resignations of Archbishop John Nienstedt and Auxiliary Bishop Lee Anthony Piche as Tom Halden, left, director of communications for the Archdiocese of St. Paul and Minneapolis, accompanies him during a news conference at the Archdiocese Chancery in St. Paul on June 15, 2015. (AP Photo/Craig Lassig)

Monday marked the deadline to file claims in the bankruptcy case of the Archdiocese of St. Paul and Minneapolis.

By 5 p.m., more than 650 claims had been filed and processed, though the final number likely won't be available until Tuesday. At least 370 of the claims were filed by victims of clergy sexual abuse -- that number was expected to rise to more than 400 -- and more than 150 were filed by local churches or parishes. Dozens were also filed by other religious organizations and Catholic schools.

An attorney filing on behalf of many victims said it was shaping up to be the third-highest number of abuse claims in an archdiocese or religious order bankruptcy in recent memory. In the case of the Archdiocese of Milwaukee, there were more than 500. In the Jesuits' Oregon Province case, there were about 460.

A Twin Cities archdiocesan legal representative could not be reached for comment.

The archdiocese filed for Chapter 11 bankruptcy in January, citing an operating deficit and sex abuse lawsuits.

There is hope the archdiocese's many insurance policies will cover the claims, but the insurance companies have reportedly pushed back and how much coverage eventually will be available is unresolved.

"Each claim has a separate chance at getting insurance coverage," plaintiffs' attorney Mike Finnegan said. "The more insurance claimants there are, the better chance there is of getting more insurance money. The way those policies work, each time, a survivor gets to go against those policies fresh.

It's a per-occurrence policy."

Finnegan -- who works at the St. Paul firm of Jeff Anderson, which represented a huge number of clergy sex abuse victims in Minnesota and elsewhere -- said the insurance companies are "absolutely fighting back."

"I can't comment at all on what's been said and done in mediation," Finnegan said. "But as a general matter, there will definitely be fights with the insurance companies. Even before this, the archdiocese had to sue the insurance companies."

The archdiocese's insurance companies have disputed the level of coverage available for victim settlements, and the church filed a federal lawsuit against several insurers in November. U.S. Bankruptcy Judge Robert Kressel suspended the proceedings in that case and ordered parties to participate in mediation as part of the bankruptcy proceedings.

There's also the issue of claims against -- and insurance coverage for -- local parishes. Each of the 187 parishes in the archdiocese is a legally independent entity, meaning they could face liability for abuse claims. Many, if not most, of the parishes filed their own claims against the archdiocese as a preemptive effort to protect themselves from that liability.

Kressel set the Aug. 3 filing deadline as requested by the archdiocese, despite objections from the creditors committee and victims' attorneys, who 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 in mid-July and asked Kressel to extend the deadline to align with the legislative one.

During oral arguments July 30, one attorney suggested that the early deadline is futile because the insurance companies have said they won't settle anything until the May 25 legislative deadline -- which still applies to local parishes, and the parishes remain open to litigation and may fall under the same policies.

But Kressel denied the request to extend the deadline and said claimants have no doubt been adequately notified by now.

Kressel noted that the court's rules do allow for late filings, which would be considered on an individual basis.

Claims already filed will stand as is, unless an objection is filed. Finnegan said he doesn't expect much pushback from the archdiocese -- unlike what they've seen in Milwaukee -- because of the Legislature's expansion of the statute of limitations.

But the number of claims here is notable, Finnegan said.

"If this is over 400 abuse claims, it'll be at least the third highest number of abuse claims," he said. "Milwaukee was the highest and the Jesuit case was the second."

Asked why the number here was so high, Finnegan said, "I think they had a large number of abusers who were allowed to access the kids for a long period of time here, and that counts for why the numbers are so high here."

Elizabeth Mohr can be reached at 651-228-5162. Follow her at twitter.com/LizMohr.

Contact: emohr@pioneerpress.com