U.S. Bankruptcy Court Judge Robert Kressel ruled Dec. 8 that the Archdiocese of St. Paul and Minneapolis wouldn’t be responsible for paying approximately $355,000 in legal fees incurred by the Unsecured Creditors’ Committee in seeking to consolidate parish, school and foundation assets into the archdiocese’s bankruptcy.
Judge Kressel’s July 28 ruling that institutions “such as churches, schools and charitable organizations and foundations cannot be forced into bankruptcy” was upheld Dec. 6 by the Federal District Court after the Unsecured Creditors Committee, which represents more than 400 sexual abuse claimants, filed the appeal.
The judge also ruled Dec. 8 that professional fees of about half a million dollars incurred by attorneys, accountants, appraisers and others could be paid immediately from the archdiocese’s regular operating account. The remaining $2 million for attorneys’ and professional fees for the archdiocese, the Unsecured Creditors Committee and the Parish Committee will be paid once the court confirms a plan of Reorganization. Going forward, all payments for professional fees will be paid once a plan is approved, the judge said.
The court is scheduled to hear arguments on disclosure statements associated with Reorganization plans on Dec. 15. The archdiocese announced Dec. 8 its intention to amend its plan to provide more than $155 million to sexual abuse claimants after settling with all 13 of its insurance carriers.
Judge Kressel also denied a motion to delay plan confirmation proceedings until after the Diocese of Duluth settles with insurance carriers in its bankruptcy case.
