(Duluth, MN) – A settlement has been reached in the Diocese of Duluth bankruptcy case, which involves 125 claimants who were sexually abused as children by clergy and others in the Diocese.
The Diocese and the Official Committee of Unsecured Creditors (“Creditors Committee”), comprised of clergy sexual abuse survivors, have reached an agreement in principle toward a resolution of the bankruptcy. The settlement calls for payment of approximately $40 million to the 125 sexual abuse claimants. The Diocese will also be required to release secret files on 37 priests it has classified as credibly accused and incorporate child protection protocols. The Diocese of Duluth filed bankruptcy on December 7, 2015.
“This is a big day for the survivors and the end of a long road,” said Jeff Anderson, attorney for many of the Duluth survivors. “We applaud the courage and patience of the survivors, who have handled this difficult process with grace and strength. They have accomplished so much for the protection of children and for themselves.”
The Creditors Committee and the Diocese will submit a Disclosure Statement and Plan of Reorganization to the United States Bankruptcy Court. These documents are subject to approval by the Bankruptcy Court. Once the documents are approved, the 125 survivors will be sent ballots and vote on the Plan. The Bankruptcy Court must then approve the Plan the survivors approve by balloting. After that, the claims are evaluated by a claims reviewer to determine award amounts.
The settlement includes a contribution of over $10 million from the Diocese, its parishes and other Catholic entities, with the rest of the approximately $40 million being funded by insurance carriers for the Diocese.