Time is running out for sex abuse victims and others to file claims against the bankrupt Archdiocese of St. Paul and Minneapolis. But that could change.
The claims deadline is Monday. But a federal judge will hear arguments Thursday morning for and against pushing the claims deadline back to May of 2016.
The creditors committee in the case — composed entirely of sex abuse victims — contends that the archdiocese has provided inadequate notice of the Aug. 3 deadline. It wants to give victims more time to file.
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The committee also contends that pushing back the deadline would actually expedite a settlement and provide more insurance money for abuse victims.
Robert Kugler, attorney for the creditors' committee, said insurers don't want to settle claims against the archdiocese only to get hit with another round of potentially costly claims against the parishes for abuse suffered perhaps decades ago.
"They want final resolution on both the archdiocese and the parishes," Kugler said. "So they will not be able to settle or be in position to settle until May 25, 2016, when all the known claims come forward against the parishes."
The state Legislature set that May deadline as part of the Minnesota Child Victims Act, which temporarily lifted legal limits on filing older abuse claims. In the archdiocese bankruptcy, though, Judge Robert Kressel set an Aug. 3 cutoff for the "timely filing of claims." He indicated, however, that he would be open to an extension if warranted.
For insurers, Kugler said, a shorter deadline "limits the amount of money that they would be willing to contribute to a resolution, which in turn means that other sources are going to have to be looked to ... and that leaves the archdiocese and parishes." In other words, more time means more money from insurers and less need to tap the church.
MPR News asked attorneys for seven archdiocese insurers what they thought of that argument. None would comment.
Victims' attorney Jeff Anderson favors a deadline extension, both to give abuse survivors more time to come forward and perhaps to extract more money from insurers.
"There is a lot of insurance and there are a lot of insurance companies," he said. "But to have them fully engaged and adhere to their responsibilities, it would really help to have the deadline extended."
The archdiocese reports it has about $29 million in net assets, but not all of that would be available to compensate creditors. The church hopes that insurers will provide substantial sums of money to compensate abuse victims. But insurers could deny claims, arguing that the archdiocese forfeited coverage by ignoring and covering up clergy sex abuse.
The archdiocese and parishes oppose extension of the window for filing claims.
Attorney Mary Jo Jensen-Carter represents about 120 parishes.
"I don't think — to the best of my knowledge — that there are any insurers out there that are raising any issues related to this bar date of Aug. 3 being a problem," said Jensen-Carter.
She said she expects the eventual archdiocese bankruptcy reorganization plan could address potential abuse claims and lawsuits against parishes.
"To the extent that the parishes become embroiled in any of these clergy abuse claims, we're asking that the archdiocese be required to indemnify the parishes for any damages they suffer as a result of those claims," she said.
Attorneys for the archdiocese declined to be interviewed. But in a court filing, archdiocese attorneys argued it is unlikely the parishes will face a flurry of abuse lawsuits. And they also warned that the Legislature could again extend the window for filing claims for sex abuse suffered long ago.
Whatever the deadline, claims will eventually be reviewed — and possibly challenged — by the archdiocese.
But knowing the universe of claims against it is essential for the archdiocese to develop a reorganization plan. That'll include setting aside some money to compensate abuse victims and developing a process for determining payments.
As of late Wednesday, more than 400 creditors had filed claims. Abuse victims accounted for more than 250 of them.