The Archdiocese of Milwaukee has reached a deal with one of its insurers that the church says could speed resolution of its bankruptcy case.
The archdiocese filed for bankruptcy in 2011, saying it wouldn't have the money to pay if lawsuits filed by victims of clergy sexual abuse went against it. Hundreds of victims then filed claims in federal bankruptcy court.
The archdiocese has listed among its chief assets insurance policies taken out during the decades in which much of the abuse occurred. It has been arguing with its former insurers in court over whether those policies covered victims' allegations that officials transferred abusive priests to new churches without warning parishioners and concealed their crimes for decades.
In court documents filed Monday, attorneys said the archdiocese has reached a settlement with Lloyd's, of London, which insured the church in the 1960s and 1970s. Lloyd's has agreed to buy back its policies for an as-yet undisclosed sum, relieving it of liability in regard to the sexual abuse claims.
The details of the settlement will be made public in the archdiocese's yet-to-be-filed bankruptcy reorganization plan and must be approved by a judge.
"Because our insurance policies are one of the few remaining assets the archdiocese has, reaching a settlement agreement with one of the larger insurers gives us great hope that soon a Plan of Reorganization can be approved by the court and bring to an end the bankruptcy proceeding," said Jerry Topczewski, chief of staff for Archbishop Jerome Listecki.
The archdiocese is still negotiating with other insurance companies.
Mike Finnegan, an attorney who represents many of the clergy sexual abuse victims, said he had not been involved in the negotiations and didn't know what the settlement involved.
"It makes me worried that archdiocese and their insurers are coming up with a settlement that benefits both of them and shuts survivors out," Finnegan said Tuesday.
Attorneys for Lloyd's and the committee representing all the archdiocese's creditors did not immediately respond to email messages requesting comment.