Archdiocese bankruptcy reorganization plan rejected by sex-abuse survivors – TwinCities.com-Pioneer Press

A group of sexual abuse survivors engaged in bankruptcy court mediation with the Archdiocese of St. Paul and Minneapolis has overwhelmingly rejected the archdioceses proposed bankruptcy reorganization plan, which includes how much it should pay victims.

The archdiocese and a group of survivors the largest class of the archdioceses creditors in the bankruptcy court have submitted opposing plans over how much the archdiocese should offer survivors for abuse that occurred at the hands its clergy.

U.S. Bankruptcy Judge Robert Kressel ruled in December to allow both plans to move forward to a vote by all creditors.

On Thursday, 94 percent of the survivor group comprising over 400 members voted that they preferred their plan over the archdioceses.

Kressel could still rule in favor of the archdiocese plan over that vote.

The plan submitted by the survivor group would require the archdiocese to directly pay up to $80 million (depending on the archdioceses existing assets) out of pocket to victims, and immediately release an investigative report concerning former Archbishop John Nienstedt.

The archdioceses plan calls for it to pay $13 million. There is no mention of the report on Nienstedt in that plan.

But the bigger sticking point is over how much exposure the archdioceses insurers should have. The archdiocese negotiated with insurers for $114 million in claim exposure, and another $13 million in exposure for its parishes.

The survivors say the archdiocese negotiated with insurers without them, and believe the archdioceses assets were highly undervalued during that negotiation. They believe the true claim exposure could be over $1 billion.

Church officials argue their offer would make money available quickly to survivors, while the opposing plan would require survivors to sue the archdioceses insurance companies, which would significantly prolong litigation.

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Archdiocese bankruptcy reorganization plan rejected by sex-abuse survivors - TwinCities.com-Pioneer Press