Judge encourages mediation in Duluth diocese bankruptcy

The Diocese of Duluth will likely negotiate bankruptcy outside of the courtroom.

Judge Robert Kressel encouraged the Diocese of Duluth and all parties involved, including attorneys for sex abuse victims and insurers, to work with a mediator to come to a resolution.

The Diocese of Duluth filed for bankruptcy protection earlier this week. The decision comes a month after a jury ordered the diocese and a Catholic religious order to pay more than $8 million in damages to a man who was sexually abused by a priest in 1978. The diocese said it can't afford its $5 million share of the settlement and filed for bankruptcy.

Mike Finnegan, a St. Paul attorney for abuse victims who've filed lawsuits against the diocese, said mediation is a less costly way to work through litigation when there are numerous parties involved. He did not argue against using a mediator.

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"Sometimes there are things in mediation that you can do to resolve a case that you can't do necessarily through the court," he said Friday. "In a lot of the cases like this, it's something that's beneficial for all the parties involved to go into mediation."

Judge Kressel did not officially order mediation. Finnegan said mediation sessions have not been scheduled.

Finnegan's firm, Jeff Anderson & Associates, has filed around 30 claims against the Diocese of Duluth. Abuse survivors are suing the church under the Child Victims Act, a law that opened a three-year window to file claims that otherwise would have been barred under the statute of limitations.

This is the 13th Roman Catholic diocesan bankruptcy in the U.S, according to BishopAccountability.org. Each one typically takes one to two years before it's resolved.