Bankrupt archdiocese files objections to creditors' reorganization plan

The bankrupt Archdiocese of St. Paul and Minneapolis says the latest reorganization plan proposed for the church by creditors would strip it of all assets required to pursue the church's mission.

The archdiocese filed its objections to the creditors' plan Friday and urged acceptance of its own $156 million settlement.

"The committee's plan isn't a reorganization plan, it's an unlawful dismantling of the Catholic Church in the Twin Cities," read a joint statement from Tom Abood, chair of the Archdiocesan Finance Council and Brian Short, a member of the Archdiocesan Corporate Board of Directors. "The committee's plan is also simply unworkable from a legal or practical basis."

The Twin Cities archdiocese filed for Chapter 11 bankruptcy in January 2015, motivated by hundreds of claims of sex abuse against archdiocesan priests.

The archdiocese says to fulfill the creditors' demands, assets would include all cash and the cash value of property, including religious vestments and relics. Also included would be the church's financial stake as landlord in the Cathedral of St. Paul and two high schools.

Attorneys for abuse victims and the creditors' committee did not respond to requests for comment.

Earlier this year, clergy abuse survivors rejected the reorganization and compensation plan from the archdiocese.

The church is offering at least $156 million. But 94 percent of abuse victims voting endorsed their own plan, which they expect would treat them more justly and extract much more money from the church and its insurers.

The settlement the church is offering could be available to victims soon after court approval, said Archbishop Bernard Hebda.

"Those who've been hurt the most will receive less with each passing day," Hebda said. "The other plan proposed by lawyers for claimants in this case relies on years, if not decades, of expensive litigation, with no guarantee of increased funding."

There's a hearing on the reorganization plans at the end of this month.

Your support matters.

You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.