Aug 062014
 

After four years, the debate of whether or not the Milwaukee Archdiocese can afford its legal bills continues.  Although the church claims it’s too broke and even filed for bankruptcy in 2011, the creditors’ attorneys say “the archdiocese’s bank accounts regularly contain more money than the archdiocese predicted.”  

Most creditors in the case are victims of clergy sexual abuse and more than 500 of those victims have filed claims in federal bankruptcy court.  Creditors accused the church of not paying their attorney fees, which is required according to bankruptcy rules, in order to persuade them in complying with its bankruptcy reorganization plan.  Based on this plan, 128 victims would receive about $4 million from an insurance settlement, while all the other victims receive nothing.  The other half of the insurance settlement and $2 million borrowed from a $55 million cemetery trust fund would be used to pay for the church’s own attorney fees and bankruptcy costs.

The creditors are very irritated by the archdiocese’s proposed plan. “Victims who had hoped to tap into the $55 million cemetery trust fund have been outraged…”  Another separate lawsuit regarding the cemetery trust fund is currently pending before the Court of Appeals in Chicago, which could affect the archdiocese’s finances.  The turnout of the suit will almost certainly affect the bankruptcy case, which has led Judge Susan Kelley to put the bankruptcy case on hold.

The victim’s attorneys disagree with the Judge’s decision and fear they will never get paid if they’re forced to wait until the bankruptcy case comes to a close.  “They suggested the archdiocese instead borrow now from the cemetery trust fund… ‘[T]here can be no legitimate dispute that the Archbishop, as the sole trustee of the Cemetery Trust, can make a loan to the Debtor from the Cemetery Trust anytime he wishes.’”

Archdiocese spokesman Jerry Topczewski estimated that the church owes $5.8 million in legal fees, which will increase if litigation continues.  Therefore, the church filed a motion to settle the case via a mediator with the hopes that it’ll be “the most sensible, practical and economical way to reach a resolution.”  Hopefully today, Judge Kelley will put an end to this debate.