Chair of Archdiocese's Creditors Panel: Members Agonized over Settlement

By Annysa Johnson
Milwaukee Journal Sentinel
August 6, 2015

http://www.jsonline.com/news/religion/chair-of-archdioceses-creditors-panel-members-agonized-over-settlement-b99551388z1-320832481.html

The Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy sex abuse cases, filed for Chapter 11 bankruptcy protection in 2011. As the case proceeds, we'll have updates, analysis, documents and more.

The clergy sex abuse victim who chairs the Archdiocese of Milwaukee's creditors committee called the $21 million settlement announced this week "the lesser of two evils," saying the alternative would have been far worse for far more survivors.

"I can't say they were happy," Charles Linneman of Sugar Grove, Ill., said of the five-member creditors committee that signed off on the agreement with the archdiocese.

"I think we were forced into a corner," he said. "They (the archdiocese) had every intention of throwing out as many cases as possible and offering a lot less than was finally agreed to in the settlement."

The archdiocese announced on Tuesday that it would pay $21 million to compensate 330 of the estimated 570 victims who filed claims in the bankruptcy. Of the 570, 157 would receive no payment, and 92 would get $2,000 each.

"We had to fight to get that number to 330," said Linneman. "We didn't want anyone thrown out."

Victims' response to the settlement, he said, has been "all over the map."

Jerry Topczewski, chief of staff for Milwaukee Archbishop Jerome Listecki, said he would not comment on the mediation that led to the settlement.

"What I can say is that we are happy that both sides were able to reach an agreement...and that now we can move forward toward confirmation of a plan of reorganization and look to returning the archdiocese's complete focus to its spiritual, charitable and educational mission," he said.

Linneman was molested between the ages of 12 and 14 by the now-defrocked Rev. Franklyn Becker at St. John's Parish in South Milwaukee. Like the other abuse claimants in the bankruptcy, he accused the archdiocese of defrauding him, in his case by moving Becker from post to post without telling families of his sexual history. Becker is believed to have molested at least 10 teenage boys beginning in the 1960s.

Tuesday's announcement sets the stage for the archdiocese to emerge from its nearly 5-year-old bankruptcy.

Legal experts say U.S. Bankruptcy Judge Susan V. Kelley is almost certain to approve the settlement as part of the archdiocese's reorganization plan, which is scheduled for a confirmation hearing in November.

But it is not a slam dunk, they say. And abuse victims unhappy with the agreement could still raise concerns about the fairness of the settlement and feasibility of the plan. To prove that a plan is not in their best interest, victims would have to show that they would get more under a liquidation, said Jonathan Lipson, who teaches bankruptcy law at Temple University.

"Any creditor who is disgruntled with the plan can come in and say it's not in my best interest," said Lipson. "Having said that, those are extremely difficult objections to win."

Topczewski and Ralph Anzivino, a bankruptcy professor at Marquette University, say confirmation of the plan is virtually certain. Kelley has twice sent the archdiocese and its creditors committee to mediation and has made it clear in hearings that she wants the bankruptcy concluded.

"I can't imagine Judge Kelley working this hard to get them to settle for her to say I'm not going to approve this," Anzivino said.

"We never say it's over until the judge signs on the dotted line, but this one's lined up for a perfect strike."

Michael Finnegan, whose St. Paul, Minn., firm represents about 200 victims who will be compensated and many others who will not, said his clients have not yet decided how to proceed.

"Our plan is to talk to each individual survivor," said Finnegan. "We might have different advice for each of them based on their perpetrator and their circumstances.

Milwaukee attorney Patrick Brennan, whose firm represents about 40 victims, said he expects to recommend they approve the plan.

"It was absolutely the best deal we could have gotten given the legal landscape of Wisconsin," he said.

Brennan called the victims' sexual abuse allegations "entirely valid," but said fraud is particularly difficult to prove in Wisconsin.

"To secure settlements...for a whole bunch of people whose claims were not sustainable, I don't view that as a failure, I view that as a success."