Twin Cities archdiocese, sex abuse victims OK $210M settlement plan

Updated 3 p.m. | Posted 11:34 a.m.

The Archdiocese of St. Paul and Minneapolis and 450 survivors of clergy abuse reached agreement on a $210 million deal to compensate those victims and lead the archdiocese out of bankruptcy.

It's the largest bankruptcy settlement of its kind in the country between Catholic church leaders and abuse victims. It's roughly $50 million more than the $156 million archdiocese leaders offered last year.

"I don't want anyone to leave the room and think that the Catholic church sexual scandal is now over. It's not. There's lots of work to be done around the world. We just proved that it can be done different than the church thought it could," Jim Keenan, an abuse survivor who headed the creditors committee during the bankruptcy, told reporters. 

Keenan said he'd been fighting the archdiocese in court for 13 years and that the settlement was a triumph.

"They never planned that an irritated, pissed-off Irishman and some other guys would say, 'You know what? We don't like their plan. We're gonna write another one.' It changed the playing field. They have to listen to victims now," he said. "I do believe we have made the world safer."

Explore the full investigation Clergy abuse, cover-up and crisis in the Twin Cities Catholic church

The settlement's exact total is $210,290,724. About $40 million will be paid by the archdiocese and parishes. Insurers will pay $170 million, said Tom Abood, chair of the Archdiocesan Finance Council.

Fees for attorneys have yet to be determined. The archdiocese says legal fees would come out of the money set aside for victims. Abood said total legal costs for the archdiocese and parishes were approaching $20 million with  about $10 million unpaid. 

Archbishop Bernard Hebda told reporters Thursday afternoon that the deal allows for a definitive resolution without more litigation and expense while allowing the church to continue its missions.

He apologized again to survivors on behalf of the archdiocese. 

"The church let you down," he said. "I am very sorry."

The archdiocese sought Chapter 11 bankruptcy protection in 2015, overwhelmed by claims against archdiocesan priests, many coming after the Minnesota Legislature in 2013 opened a three-year window in the statute of limitations that allowed victims of prior abuse to sue for damages.

The bankruptcy case proceeded slowly as attorneys argued over how much money the archdiocese should have to pay. 

The archdiocese reported its net worth was $45 million. But attorneys for the victims maintained that the archdiocese's true worth was over $1 billion, counting assets of its 187 Roman Catholic parishes, as well as schools, cemeteries and other church-related entities. Victims' attorneys said those assets should be used to make more money available for victims.

Archdiocese leaders last year objected to a creditors' plan they said would strip the archdiocese of all assets required to pursue the church's mission. 

That came after survivors rejected the reorganization and compensation plan from the archdiocese.

At least 15 Catholic dioceses across the country have filed for bankruptcy, including three in Minnesota, as they sought to protect themselves from growing claims of sexual abuse by clergy members. A fourth Minnesota diocese, St. Cloud, announced its intention to file in February but didn't immediately set a date.

Besides the financial settlement with the Twin Cities archdiocese, survivors' attorney Jeff Anderson said the deal "actually advances the ball on child protection in a way that's never really been done in this country." He didn't elaborate and declined to take questions afterward.

Anderson, who's filed lawsuits on behalf of thousands of victims of sexual abuse across the country, choked up at times during Thursday's press conference with survivors to announce the settlement.   

"I'm almost at a loss for some words," he said. "There are some feelings that are overwhelming me at this moment."

The 2015 archdiocese bankruptcy filing came about 16 months after MPR News first published reports that showed an ongoing cover-up of clergy sex abuse by then-Archbishop John Nienstedt and other top officials. 

The reports roiled the archdiocese and the Twin Cities Catholic community. Within days of the first MPR News report, Nienstedt's top deputy, the Rev. Peter Laird, resigned. 

As the scandal widened, the archdiocese postponed a $160 million capital campaign, and parishioners' calls for Nienstedt to step down grew louder.

Nienstedt resigned on June 15, 2015, 10 days after the Ramsey County Attorney's Office charged the archdiocese with failing to protect children from a predatory priest.

Prosecutors later dropped the criminal charges, and the archdiocese under Hebda publicly admitted wrongdoing for the way it handled sexual abuse allegations against the defrocked cleric. 

The Associated Press contributed to this report.