Settlement Reached With One of Diocese of Duluth’s Insurers in Bankruptcy Case
Catholic Mutual Will Pay Abuse Claimants $8.95 Million
Deal Contingent On Court Approval, Consensual Reorganization Plan Confirmation
(St. Paul, MN) – A settlement has been reached with one of the Diocese of Duluth’s multiple insurers in the Diocese’s bankruptcy case stemming from clergy sexual abuse. The insurer, Catholic Mutual Relief Society of America (Catholic Mutual), will contribute $8,950,000.00 to the Diocese of Duluth bankruptcy case. If approved, the money will be used to pay a portion of the sexual abuse claimants in the bankruptcy case.
The agreement must be approved by the bankruptcy court and is contingent on confirmation of a consensual plan of reorganization agreed to by all parties, which is not imminent despite negotiations. Jeff Anderson, an attorney representing many of the sexual abuse survivors who are claimants in the Diocese of Duluth bankruptcy case, said that the settlement represents progress.
“This is promising and there is hope but the key is getting the other insurance companies to step up and honor their obligations,” Anderson said.
U.S. Bankruptcy Court Judge Robert J. Kressel will consider the Diocese’s motion for approval of the settlement with Catholic Mutual in a January 4, 2018, hearing.
The Diocese of Duluth filed Chapter 11 bankruptcy on December 7, 2015, after it was served with several clergy sexual abuse lawsuits and faced an approximately $4.8 million judgment resulting from a clergy abuse civil trial. Since then, negotiations between the Diocese, its parishes, its multiple insurers and the Creditors Committee representing more than 120 sexual abuse claimants have stalled and not resulted in a plan of reorganization.