Magazine article National Catholic Reporter

Milwaukee Bankruptcy Plan Shuts out Majority of Abuse Claimants

Magazine article National Catholic Reporter

Milwaukee Bankruptcy Plan Shuts out Majority of Abuse Claimants

Article excerpt

MILWAUKEE * The Milwaukee archdiocese will walk away from bankruptcy relatively unscathed if its proposed reorganization plan is accepted by Judge Susan V Kelley.

Although it was lawsuits brought by 570 alleged childhood victims of clergy sex abuse that forced the archdiocese into bankruptcy court, a close reading of the 337-page document shows that the vast majority of those claims will get no financial compensation from a $4 million fund for survivors.

Most other creditors in the case will be paid, although some will get less than they say they are due.

The archdiocese has no plans to reduce its annual $24 million operating budget or sell any property. It will have to put some property up as collateral to "borrow" $2 million from the controversial cemetery perpetual care trust fund--the same $57 million fund church officials fought to keep out of the bankruptcy case that is now being appealed.

Meanwhile, the price tag for bankruptcy legal fees that the archdiocese must pay will be at least $18 million. Already, $12.5 million has been paid and another $4.5 million in bills has accrued. The archdiocese estimates it will cost another $1 million to complete the bankruptcy under the plan.

If the plan is not adopted, litigation could continue for another five years, cost another $14 million and mean that each individual survivor who filed a claim would have a separate trial, according to the archdiocese.

Monica Barrett is among the 80 percent of abuse claims that the archdiocese says is not eligible for compensation. Barrett said she was sexually abused in 1968 at the age of 8 by Fr. William Effinger, one of the archdiocese's most prolific abusers. "They said I was his first victim and that they would not have 'had noticed that he was an abuser," said Barrett, who filed a lawsuit in state court in the 1990s.

Barrett's state case was dismissed after the Wisconsin Supreme Court issued a pair of decisions that found that the church was not responsible for the actions of abusive priests. Later, another decision opened the door to lawsuits if victims could show that church officials knew about sexual abuse but allowed priests to continue to work in areas where they would come into contact With children.

Before Barrett's case was dismissed, the church mounted an aggressive defense, deposing former boyfriends and others about what she had told them.

"I had told very few people about the abuse," Barrett said. "They went to all these people and told them. They wanted to depose my daughter, who was only 11 or 12 at the time."

Lawyers representing the majority of the survivors for nearly a decade said it is unlikely they will accept the plan. Kelley has the authority to "cram down"--force unwilling claimants to accept the plan--but an appeal is likely.

The archdiocese says only 128 of the claims are eligible for compensation and could receive approximately $27,000 per person. The other survivors will get no financial settlement, but the archdiocese may provide therapy to some or work with others to get responsible parties to pay for therapy.

Milwaukee is one of 11 U.S. dioceses to file for bankruptcy as a result of sexual abuse allegations. Lawyers representing survivors say elsewhere they received average payments of $400,000.

In 2006, 10 California victims of two abusive priests from Wisconsin received $16. …

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