Winners and Losers in Archdiocese’s Bankruptcy
Big losers were clergy abuse victims. Other losers were We Energies, its ratepayers and Messmer H.S.
The news is not good for the 575 alleged victims of sexual abuse by archdiocesan clergy. Of that total, archdiocesan lawyers succeeded in throwing out 240 claims. The remaining 335 alleged victims received a settlement of $39,000 per person, one of the lowest per-person settlements in the nation.
The big winners, in addition to the archdiocese, are the lawyers. Except for the lawyers, all creditors will be paid up to $5,000 of their bills, losing the rest. A long list of creditors were owed money, presumably since the point when the archdiocese filed for bankruptcy.
The winners are:
- The bankruptcy lawyers — those representing both the archdiocese and the creditors — will receive about $20 million.
- Another $4.5 million goes to the lawyers involved in the cemetery trust litigation that the archdiocese argued should not be included in the cost of the bankruptcy.
- Each of the parishes has been asked to contribute $2,000 to a therapy fund for abuse victims, but the parishes receive immunity from future lawsuits.
- The archdiocese will have a fresh start without debt; it did not have to sell any property to reach the settlement.
The losers are:
- State court lawyers worked for years without pay and will receive up to 40 percent of each of their clients’ settlement (most, but not all, abuse victims were represented by state lawyers). While they will receive something, they had battled in state courts for 20 years without compensation.
- Messmer High School, the independent Catholic school that serves Milwaukee’s African-American community, will lose $3.4 million in support the archdiocese pledged when the school took over two feeder schools from the archdiocese in 2007.
- We Energies will be shorted $129,437. But the loss will by passed on to area ratepayers, We Energies spokesperson Brian Manthey confirmed.
- The Milwaukee Water Works will be shorted $25,589, a sum that will be paid by other users. Officials there did not respond to calls for comments.
- The Green Bay diocese’s tribunal will lose $15,000.
- The U.S. Conference of Catholic Bishops will be shorted $9,621.
- A number of contractors, office suppliers and other vendors took hits of between $773 and $9,888.
A shorter version of this story was originally published in the National Catholic Reporter.