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Q&A: Law professor sheds light on Twin Cities archdiocese bankruptcy settlement

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Victims of abuse look on during the Archdiocese settlement explanation.
Victims of abuse by priests stand in support of the settlement with the Archdiocese during a press conference in the Jeff Anderson & Associates office in Saint Paul, Minn. on May 31, 2018.
Lacey Young | MPR News

After years of legal wrangling, clergy sex abuse survivors and the Twin Cities archdiocese announced a $210 million settlement this week.

There's still a lot we don't know yet. Among the big unanswered questions is how the settlement will be allocated. In other cases around the country, the process has ranged from amicable to acrimonious.

Jonathan Lipson, a professor of law at Temple University in Philadelphia with expertise in diocesan bankruptcies, spoke to All Things Considered host Tom Crann about what to watch for as the settlement process proceeds.

Editor's note: This transcription has been lightly edited for clarity.

Q: There are some 450 victims here. How is it decided who gets how much?

It sounds from what little we know about the settlement there will be effectively a pot of money created by contributions from insurance companies and from the archdiocese itself. Then two things would have to happen: Number one, the claimants would [each] have to demonstrate that the archdiocese actually was liable. Number two, you have to figure out for how much. 

Q: How has this process played out in other situations where there has been a similar settlement?

It varies, and the most important question is "what is the level of acrimony?" In cases that have been more amicable, like the Tucson case, for example, I think it was fairly easy for the victims and the church to decide exactly how much was owed and then to pay it out. So, there wasn't much more wrangling. 

In Milwaukee, it sounds like there was still quite a bit of wrangling and here, I don't know exactly what the tenor of the relationship is between the victims and their attorney on one hand on the archdiocese on the other. If they truly have reconciled in some way, it could be a fairly quick and painless process. But if they haven't resolved the claims at that level of detail they might still find themselves in dispute.

Q: Who makes this decision?  Do they bring in an adjudicator of some sort, or go before arbitration or a judge? How does it work?

This can get you very quickly into the complex world of bankruptcy jurisdiction. The basic set-up probably will be to have an informal mechanism for determining the amount of the claim. That might be through mediation or some kind of mini-adjudication — something of that sort. The parties would have to agree to that though. 

Q: As you describe the process it sounds almost like mini-trials or verdicts for each one of the claimants. Can the archdiocese challenge each one of these claims and say "no, not that person" or "no they don't have a claim"? 

They could. Again, we don't know the details of the settlement. Unless the archdiocese has agreed not to do that — which they might have — but if they haven't then certainly could do that. And they might actually have an obligation to do so. You can imagine that claimants who have legitimate claims don't want to have to share recoveries with claimants who don't have legitimate claims. Because every dollar paid out to somebody who is not deserving of recovery is a dollar that doesn't go to a creditor who is.