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Judge signals concerns about creditors' plan for bankrupt archdiocese

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A federal judge is weighing arguments he heard Tuesday about the legal soundness of two competing reorganization plans for the bankrupt Archdiocese of St. Paul and Minneapolis. 

Judge Robert Kressel didn't say when he'll rule. But he signaled he has concerns about the plan proposed by the creditors committee and overwhelmingly endorsed by abuse victims. 

The victims figure the church and insurance companies can come up with much more money than the $155 million the archdiocese has put on the table. 

But Kressel said that would amount to "rolling the dice" in an effort that may or may not provide more compensation to more than 400 abuse victims. He also said he wondered if victims had "unrealistic expectations" and realize they could wait for years for some money if the archdiocese plan is not implemented.

The judge noted that a few abuse victims have died since the archdiocese filed for bankruptcy in January 2015, saying that bankruptcy was the fairest way to deal with a flood of sexual abuse lawsuits.

If Kressel decides one or both plans pass legal muster, there will then be a hearing addressing financial viability and other matters.

Outside the courthouse, archdiocese attorney Charles Rogers again said the church has made its best possible offer.

"This is the best we could do," he said. "We spent a little over a year negotiating very vigorously with these insurance carriers and this is the best we could do in terms of achieving a pot, a reasonable pot for victims."

Rogers said the alternative would be years of litigation.

The archdiocese also contends that the plan drawn up by the creditors committee would leave the archdiocese unable to fund its operations or meet its payroll.

Victims attorney Jeff Anderson said abuse survivors would get stiffed by the church's deal. He said insurers for the archdiocese and parishes could be pressured to provide much more cash.

"The precise numbers are unknowable because there's so much insurance that is available to both the parishes and the archdiocese," he said. "That they have cut off. And that they have denied access to under their plan."

Dozens of abuse victims and lawyers were on hand for the hearing.

Abuse survivor Jim Keenan said the church appears to hope victims won't persevere in pushing for the settlement they feel they deserve.

"They want to slow it down," he said. "They want to wear you out. They want you to eventually say, 'I give in. It's not worth it.' I want to be a human thorn in their side."

Legal and other professional fees for the bankruptcy would be deducted from whatever settlement victims get. And that tab is likely headed toward $20 million, maybe more. 

Last fall, Kressel told lawyers to stop submitting bills and not to expect any more payments until the bankruptcy case is wrapped up.

Anderson said his fee would amount to about a third of whatever clients get.