Milwaukee archdiocese files for Chap 11 bankruptcy

By DINESH RAMDE, Associated Press

MILWAUKEE (AP) - The Milwaukee Archdiocese said Tuesday it had directed its attorneys to file for bankruptcy protection because pending sexual-abuse lawsuits have left it with debts it can't pay.

The archdiocese was entering Chapter 11 reorganization so it could continue its work as a church while also compensating victims of sexual abuse, Archbishop Jerome Listecki said in a statement posted on the church's website.

"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 cases in Milwaukee include allegations that one priest sexually abused some 200 boys at a suburban school for deaf students from 1950 to 1974.

The archdiocese had been in mediation with some victims, but that stalled last month after the men said they wanted church documents and other agreements released along with money.

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Archdiocese spokesman Jerry Topczewski said the failed mediation meant the church would likely face lawsuits involving big legal fees. The bankruptcy reorganization was the best way to ensure the church could meet its financial obligations, he said.

An e-mail sent Tuesday to the Wisconsin-based chapter of SNAP, the Survivors Network of those Abused by Priests, was not immediately returned. The chapter has represented a number of the abuse victims.

The abuse has already cost the Milwaukee archdiocese more than $29 million as it has addressed almost 200 claims over the past 20 years, Listecki said.

"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 archdiocese is the eighth in the nation 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.

Under Chapter 11 reorganization, the archdiocese will continue to conduct its normal activities. However, the bankruptcy court will have to approve all non-routine decisions and expenses.

The Milwaukee archdiocese has about 640,000 members in 210 parishes, Topczewski said. Each parish is incorporated individually, so the bankruptcy won't affect their finances, he said.

"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 tried to reassure parishioners who felt disheartened or frustrated, saying the church would continue to be strong with their support and good works.

"For those who may feel anger and resentment that we have come to this moment, STOP. We are here because of one reason: priests sexually abused minors," he said. "For that, I feel deeply ashamed."

(Copyright 2011 by The Associated Press. All Rights Reserved.)