WI--Creditors Committee in child sex abuse bankruptcy never agreed to key settlement terms announced by Milwaukee Archdiocese

Creditors Committee in child sex abuse bankruptcy never agreed to key settlement terms announced by Milwaukee Archdiocese

Archdiocese secretly removed 80 victims from settlement after agreement

Chair says victims were “duped” in mediation

Time for an investigation by the Federal Bankruptcy Trustee and the Department of Justice

Statement by Peter Isely, SNAP Midwest Director

CONTACT:  414.429.7259

The Chair of the Creditors Committee of the Milwaukee Archdiocese’s nearly five year old child sex abuse bankruptcy is saying today that the committee can no longer support the settlement agreement unilaterally announced by Archbishop Jerome Listecki last week.

According to Charles Linneman, the Chair of the Creditors Committee, at least 80 victims were removed from the settlement without the committee’s knowledge. 



The settlement, which has per victim compensation amounts at an average ten times lower than all other church bankruptcy settlements in the United States, appears to have been mediated by the archdiocese to “dupe” victims into an agreement.

Linneman was interviewed today in a breaking story by the National Catholic Reporter.

Perhaps even more alarming is that the five survivors on the committee, who represent 575 victims who filed cases into court, were never given anything in writing about the so called settlement, were not working off of written drafts, and were not allowed in the mediation to see any of the 575 case reports of the victims they were negotiating for.  The committee members were also told nothing of when the settlement was going to be announced.   

Also, unlike any other bankruptcy mediation in the United States, no one but the archdiocese was allowed to determine which claims were valid.  

Of the 575 reports by victims, the criminal and sexually abusive acts of at least 100 newly alleged offender clergy have been detailed.  Astonishingly, the archdiocese, which has a demonstrated history of concealing and transferring known sex offenders, was allowed to determine, without any outside investigation and apparently no involvement by law enforcement, that every single one of the over 100 newly named clerics were not a present danger to children.   

Lawyers for the bankruptcy will be receiving nearly 70 percent of the total money.  Over $20 million dollars will be pocketed by church, bankruptcy and church cemetery trust lawyers.   Another $7 million will be distributed to lawyers representing individual creditors.  

The archdiocese has between $250 to $300 million dollars that the settlement does not require they make available to victims, including a $60 to $65 million dollars of a fraudulently created “Cemetery Trust Fund” that the US Federal 7th Circuit Court has now ruled must be part of the archdiocesan bankruptcy estate.  Not one single piece of property will have to be sold.  No parishes or other church assets will be included, even though at one time the archdiocese listed its net worth at $1.3 billion dollars.  (See details of what survivors believe the settlement should have been here.)

It’s hard to determine exactly how many lawyers have been involved in the bankruptcy, but for argument sake, of the 20 major lawyers “of record”, one can calculate that on average each one will be making about $1.5 million dollars.  Compare that to the 330 clergy rape and sexual assault victims that the archdiocese has “allowed” into their settlement who will be getting on average $44,000 dollars each.  (Keep in mind as well that 245 victims were excluded, including the 80 secretly removed after the archdiocesan announcement. They will receive nothing from the settlement as it stands.)

Average settlement amounts from other church bankruptcies after attorneys’ fees, is just over $300,000 dollars. 

Among the secretly excluded 80 appear to be deaf victims sexually assaulted as children by the notorious Father Lawrence Murphy, a case which gained international attention.  After removing lawyer fees, their settlement offer will be about $1,300 dollars.  With archdiocesan billable hours at $450 to $475 dollars an hour this means a deaf victim assaulted by Murphy over a period of several years would receive less money than four billable hours by a church lawyer, hardly a single morning’s work defending the archdiocese for abusive priests and cover ups.

Isn’t it time with these new and alarming revelations today that the Federal Bankruptcy Trustee and the bankruptcy division of the Department of Justice begin a long overdue investigation?

SNAP, the Survivors Network of those Abused by Priests, is the world’s oldest and largest support group for clergy abuse victims. We’ve been around for 23 years and have more than 18,000 members worldwide. Despite the word “priest” in our title, we have members who were molested by religious figures of all denominations, including nuns, rabbis, bishops, and Protestant ministers. Visit us at SNAPnetwork.org and SNAPwisconsin.com 



Showing 1 comment

  • Iain Pattison
    commented 2015-08-12 12:37:28 -0500
    Good post SNAP.
    I am going to deviate from the subject a bit but I have to say something about this Fr. Lawrence Murphy. I know child abusers are bad but this guy, by abusing deaf children for 24 years, has entered a new level of depravity.

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