No deal yet in Milwaukee archdiocese bankruptcy (UPDATE)

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By M.L. JOHNSON
Associated Press

MILWAUKEE (AP) — Two days of mediation in the Archdiocese of Milwaukee’s bankruptcy case ended without a deal, but more talks have been scheduled for later this month, an archdiocese spokesman said Wednesday.

Attorneys for the archdiocese, victims of clergy sexual abuse and others involved in the case met Monday and Tuesday with a bankruptcy judge in Minnesota to try to come up with a settlement. Archdiocese spokesman Jerry Topczewski said additional talks are planned for Sept. 22 and 23.

Topczewski said he couldn’t discuss details of the mediation because the process is confidential.

“We hope progress is being made, and we’re continually hopeful and optimistic that we can reach a plan,” he said.

Attorneys representing sexual abuse victims and others owed money by the archdiocese didn’t immediately respond to emails seeking comment.

The archdiocese filed for bankruptcy in 2011, saying it wouldn’t have the money to pay if it lost lawsuits filed by victims of clergy sexual abuse. More than 500 victims then filed claims in bankruptcy court. The two sides tried mediation in 2012 but couldn’t reach an agreement.

A sticking point has been $55 million in a cemetery trust fund. The archdiocese maintains the money was given to care for Catholic cemeteries and must be used for that purpose. Abuse victims claim New York Cardinal and former Milwaukee Archbishop Timothy Dolan set up the trust fund to shield the money from lawsuits.

The 7th U.S. Circuit Court of Appeals in Chicago has yet to decide on an appeal of a federal judge’s decision ruling the trust fund off-limits.

Meanwhile, a reorganization plan the archdiocese proposed in February calls for it to borrow $2 million from the cemetery trust fund to settle its debts. That plan would set aside $4 million for the roughly 130 people who were abused by priests who worked directly for the archdiocese, but nothing for hundreds of others abused by religious order priests or laypeople. Victims don’t understand why the archdiocese can’t or won’t borrow more from the trust fund to increase the amount it can pay them.

Mediation was also expected to address how money would be divided among abuse victims and some insurance-related issues.