Milwaukee archdiocese settles for $21 million

Updated: 4 p.m. | Posted: 2:26 p.m.

The Roman Catholic Archdiocese of Milwaukee said Tuesday that it will pay $21 million to more than 300 victims of clergy abuse in a settlement that would end a four-year bankruptcy proceeding.

The proposed deal, which will be part of a reorganization plan submitted to a bankruptcy court later this month, was to be reviewed by a judge overseeing the case at a Nov. 9 hearing. Archbishop Jerome Listeki called the settlement a "new Pentecost," but an attorney for the victims, along with advocates for those abused by clergy, decried the settlement as a paltry amount.

Milwaukee is one of 12 Roman Catholic dioceses nationwide to file for bankruptcy in the past decade over a flood of abuse claims. The settlement announced Tuesday is among the smallest per-victim payments yet in these cases. The actual amount each victim receives will be determined by an appointee of the bankruptcy court.

The settlement was reached after three days of negotiations in July between the archdiocese, the creditors' committee and attorneys for abuse survivors, the archdiocese said.

"Today, we turn the page on a terrible part of our history and we embark on a new road lined with hope, forgiveness and love," Listecki said in a statement.

But attorney Jeff Anderson, who represents people who have filed 350 of the 579 bankruptcy claims called the archdiocese's treatment of abuse victims "harsh and hurtful."

"This process has been heartbreaking for many who have been treated so unfairly by hardball legal tactics," he said. "The survivors continued to stand up for what was right, what they believed in, and to make sure the truth was brought to light. Because of them, children are better protected."

The deal was also criticized by David Clohessy, director of the Survivors Network of those Abused by Priests, an advocacy group for survivors of clergy abuse. He called it "the largest mass betrayal of child sex abuse victims we've ever seen by one diocese. And it's the most cunning exploitation of the advantages of bankruptcy rules by Catholic officials we've ever seen."

Under terms of the deal, 330 abuse survivors out of 579 claims will share $21 million and a $500,000 therapy fund will be established for them to receive counseling for as long as they need it. All of the archdiocese's parishes, schools and institutions would be protected from future lawsuits related to abuse claims.

Peter Isely, Midwest director of SNAP, said when attorneys' fees are subtracted, the average settlement amount per victim will be $44,000. He said the average settlement amount in all other U.S. church bankruptcy cases, minus attorneys' fees, is $300,000.

Some people will get no money under the deal. No payment will be given to 157 claims that had previously been disallowed or dismissed, were not for sexual abuse, did not name the abuser or where a financial settlement had already been paid, the archdiocese said. Ninety-two others with unsubstantiated claims, or where abuse occurred by someone at a non-archdiocesan organization, will get nothing.

Money to pay the claims will come from various sources, including insurance settlements worth $11 million and financial arrangements with the cemetery trust fund.

The bankruptcy was drawn out by a complex legal fight over the fate of the cemetery fund. Documents made public two years ago revealed that Listecki's predecessor, Cardinal Timothy Dolan, now archbishop of New York, had sought permission from the Vatican to move nearly $57 million into the cemetery trust to help protect it from legal claims. Dolan had denied he moved the money to shield church assets from abuse victims.

The archdiocese filed for Chapter 11 bankruptcy protection in 2011 to address its sex abuse lawsuit liabilities.

"This settlement represents for us in the Archdiocese of Milwaukee a new Pentecost, a day of rebirth that renews our focus on word, worship and service," Listeki said.