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Home 9 Commercial Bankruptcy 9 Wisconsin diocese faces new bankruptcy objections from victims

Wisconsin diocese faces new bankruptcy objections from victims

by | Apr 23, 2014 | Commercial Bankruptcy

In a continuing battle over the Archdiocese of Milwaukee’s bankruptcy reorganization plan, a new objection has been filed by legal spokespersons representing victims of sexual abuse. The Archdiocese has denied any accountability in countless abuse claims of alleged victims by clergy and lay people. Attorneys who are defending victims have stated the religious organization covered up sexual abuse and reassigned priests to other parishes.

The proposed plan purports to allocate about $4 million to compensate almost 130 alleged victims, one of the smallest settlements to date involving Roman Catholic groups. Victims claim the archdiocese is hiding funds, citing a questionable transfer of about $50 million to a trust fund for a cemetery. The archdiocese has maintained it has already mortgaged its properties and has no money to pay out to alleged victims. New federal court bankruptcy documents assert that the money is available, regardless of a motion indicating the funds are untouchable.

The archdiocese filed for bankruptcy three years ago. It reports the proposed $4 million would come from an $8 million settlement with Lloyd’s of London, which is a group of insurers.

According to legal spokespersons of the victims, the archdiocese had $11 million set aside with J. P. Morgan two years ago. These funds, earmarked for other areas, could be used to compensate victims. The archdiocese counters that most of its money had been donated and designated for other purposes.

Legal advisors for the Roman Catholic entity claims these allegations had already been decided and should not be re-argued. They contend the organization’s reorganization bankruptcy case should be brought to conclusion. Insurers of the Archdiocese have also filed objections, disputing how the funds from the Lloyd’s settlement would be disseminated.

Business bankruptcy has been rampant in the country since the economic slump beginning several years ago. In troubling times, it is advisable to investigate all options to resolve ongoing financial issues. While the case with the Milwaukee Archdiocese is plagued by timely and sensitive issues with abuse victims, most bankruptcy cases can be handled on a large or small scale by qualified professionals who can help individuals or businesses to resolve their issues and move forward in a new direction.

Source:  Business Week, “Victims object to Wis. archdiocese bankruptcy plan” M .L. Johnson, Apr. 04, 2014

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