Milwaukee Archdiocese Bankruptcy: Sexual-Abuse Lawsuits Leading To Chapter 11
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MILWAUKEE — The Archdiocese of Milwaukee said Tuesday it would file for bankruptcy protection because pending sexual-abuse lawsuits could leave it with debts it couldn't afford. A lawyer who filed many of those lawsuits, however, said he thought the archdiocese was using bankruptcy as a delay tactic to avoid opening its records to public scrutiny.
Clergy sex abuse has already cost the Milwaukee archdiocese $29 million to address almost 200 claims over the past 20 years, Archbishop Jerome Listecki said. Bankruptcy protection will allow the church to continue its work while ensuring other victims receive the compensation they deserve, he said.
Listecki said he felt "deeply ashamed" about what had happened within the church.
"In my installation homily on Jan. 4, 2010, I spoke of the devastation of sin and its effect on us personally and as a community," Listecki said. "We see the result of that sin today. This action is occurring because priest-perpetrators sexually abused minors, going against everything the church and the priesthood represents."
The Milwaukee archdiocese is the eighth in the U.S. to seek bankruptcy protection since the clergy abuse scandal erupted in 2002 in Boston. The other seven are in Davenport, Iowa; Fairbanks, Alaska; Portland, Ore.; San Diego; Spokane, Wash.; Tucson, Ariz.; and Wilmington, Del.
Tuesday's announcement drew scorn from attorney Jeff Anderson, of St. Paul, Minn., who has filed 23 lawsuits against the archdiocese. He said he was scheduled to depose Milwaukee Bishop Richard Sklba on Thursday and he thought the bankruptcy filing was intended to delay that. Church officials in other dioceses also have filed for bankruptcy on the eve of trials or major depositions to avoid having to release information, he said.
Anderson and some of his clients have been pushing for the archdiocese to make public the names of priests accused of sexual abuse and church officials who protected them. They want the archdiocese to release personnel files and other documents related to the scandal.
The church has refused, and mediation with some victims failed last month. Archdiocese spokesman Jerry Topczewski said that failure was one reason church officials decided to seek bankruptcy protection. If the cases go to court, the archdiocese could end up with hefty legal bills it can't afford, he said.
The archdiocese has assets of about $98.4 million but more than $90 million of that is designated for specific use by donors or otherwise restricted, according to its website. Its 210 parishes with 640,000 members are incorporated individually, so the bankruptcy won't affect their finances, Topczewski said.
The reorganization under Chapter 11 of the U.S. bankruptcy code will allow the archdiocese to continue to conduct its normal activities, but a bankruptcy court will have to approve all non-routine decisions and expenses.
"People should know this doesn't mean we're going out of business," Topczewski said. "This is a way to reorganize, to make sure we can continue to operate on stable financial grounds and meet our obligations to those who were harmed."
Listecki said the archdiocese has already done all it could to raise more cash.
"Since 2002, we have sold property, liquidated savings and investments, eliminated ministries and services, cut archdiocesan staff by nearly 40 percent, and put all available real estate on the market in order to free up resources," he said.
The lawsuits pending against the archdiocese include allegations against six priests, including one accused of abusing some 200 boys at a suburban school for deaf students from 1950 to 1974.
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Online:
Milwaukee archdiocese: http://www.archmil.org/
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Dinesh Ramde can be reached at dramde(at)ap.org.
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DINESH RAMDE 01/ 4/11 09:29 PM ET Associated Press