Milwaukee Archdiocese Settles with Victims of Alleged Clergy Sex Abuse
By Tom Corrigan
The Roman Catholic Archdiocese of Milwaukee said Tuesday it would pay $21 million to several hundred alleged victims of sexual abuse by clergy under a settlement that aims to end the longest-running church bankruptcy in U.S. history. The settlement, which is subject to final approval by Judge Susan Kelley of the U.S. Bankruptcy Court in Milwaukee, also resolves a dispute about whether a $55 million cemetery maintenance trust can be tapped to compensate the alleged victims, the most significant sticking point in the 4?-year-old chapter 11 case. To help fund the settlement and legal fees, the archdiocese will draw on $16 million from the cemetery trust. The archdiocese’s insurance carriers will contribute an additional $11 million to the victims. “Today, we turn the page on a terrible part of our history and we embark on a new road lined with hope, forgiveness and love,” Milwaukee Archbishop Jerome Listecki said in a statement Tuesday. “We all know that no amount of money could ever restore what was taken from these individuals.” The archdiocese said it hopes to exit bankruptcy protection by the end of the year. It has spent at least $18 million in legal and professional fees since the start of its chapter 11 case, a spokesman said. Additional legal fees have been capped at $1.25 million by Tuesday’s settlement. The terms of the settlement will divide about 570 alleged victims into several groups, some of whom will receive nothing. About 330 alleged victims will share the bulk of the $21 million settlement. David Clohessy, the director of SNAP, or the Survivors Network of those Abused by Priests, called the deal “dismal.” However, he acknowledged the committee representing alleged victims in negotiations with the archdiocese likely did everything it could to “lessen the horrors of this awful process.” Jeff Anderson, a lawyer representing a group of victims, said the committee settled to prevent the case from being drawn out longer. “They had to take the bad over the worse,” he said. The settlement also provides a total of $250,000 for alleged victims who come forward in the future, plus $500,000 to provide therapy for alleged victims. The archdiocese’s parishes and schools will receive legal protections shielding them from future abuse-related lawsuits under the deal. The details of the settlement were hammered out during mediation last month, according to James Stang, a Pachulski Stang Ziehl & Jones bankruptcy lawyer who represented victims in negotiations with the archdiocese. The archdiocese sought chapter 11 protection in 2011 in the face of mounting claims of alleged abuse. In February 2014, it offered $4 million to pay about 125 of the alleged victims who had sought compensation, as well as a further $500,000 to provide lifetime therapy. The alleged victims rejected the offer as too low. The bankruptcy gave rise to the battle over the cemetery trust funds, which the archdiocese has long argued are shielded by laws protecting religious freedom. Several federal courts disagreed, leading the trust’s lawyers to ask the Supreme Court to weigh in. The appeal will be withdrawn as a result of the settlement. The abuse scandal has cost dioceses and other Catholic institutions in the U.S. nearly $2.9 billion since 2004 in compensation paid to alleged victims, according to a recent report issued by the U.S. Conference of Catholic Bishops. The Portland, Ore., archdiocese, the first to seek chapter 11 protection, reached a $75 million settlement in 2007, while the Wilmington, Del., diocese won court approval for a $77 million deal in 2011. Outside of bankruptcy, dioceses have paid bigger sums—for instance, in 2007, the Los Angeles archdiocese agreed to settle more than 500 cases for $660 million, though it has paid out more settlements before and since. Write to Tom Corrigan at tom.corrigan@wsj.com
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