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Third Minnesota diocese files Chapter 11 bankruptcy

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Bishop John M. LeVoir of New Ulm, Minn., retired Bishop Bernard J. Harrington of Winona, Minn., and Bishop John F. Kinney of St. Cloud, Minn., concelebrate Mass with other bishops from Minnesota, North Dakota and South Dakota at the Altar of the Tomb in the crypt of St. Peter's Basilica at the Vatican March 9. The bishops were making their "ad limina" visits to report to the pope and the Vatican about the status of their dioceses. (CNS photo/Paul Haring) (March 9, 2012) See POPE-US March 9, 2012.

Bishop John M. LeVoir of New Ulm, Minn., said March 3 he asked diocesan attorneys to file for reorganization under Chapter !! of the U.S. Bankruptcy Code. CNS file/Paul Haring 

NEW ULM, Minn. — A third Minnesota diocese has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Bishop John M. LeVoir of New Ulm said March 3 he asked diocesan attorneys to take the action in response to the enactment of the 2013 Minnesota Child Victims Act, which temporarily lifted the civil statute of limitations on child sexual abuse claims for three years. That three-year window ended May 25, 2016.

The legal step was “the fairest way to resolve sexual abuse claims while allowing the church to continue its essential work of serving people in our local communities,” Bishop LeVoir said in a statement.

Under the three-year window, 101 lawsuits were filed against the New Ulm diocese and some of its parishes, the statement said.

“I again extend my deepest apologies on behalf of the Diocese of New Ulm to victims and survivors of clergy sexual abuse as minors,” Bishop LeVoir said. “Victims and survivors have shown incredible courage by stepping forward to help prevent such a tragedy from ever happening again. Victims and survivors must be treated with dignity and just compensation is owed them, as well as our daily prayers. These are integral to the healing process.”

Parishes, Catholic schools and other Catholics organizations in the diocese, which covers south and west-central parts of the state, are not part of the reorganization because they are separate corporations under Minnesota law. The diocese has 75 parishes and a Catholic population of about 56,000 out of a total population of just over 280,000.

The Duluth diocese and the St. Paul-Minneapolis archdiocese filed under Chapter 11 in 2015. The cases are pending. Nationwide, 11 other diocese and two religious orders have filed for reorganization.

Statewide, the law resulted in the filing of more than 800 claims of child sexual abuse by priests before the deadline. Other cases include more than 400 in the Archdiocese of St. Paul and Minneapolis, 125 in both the Duluth and Winona dioceses, about 75 in the St. Cloud Diocese and about 20 in the Crookston Diocese, Mike Finnegan, an attorney representing abuse victims, told the Star Tribune in Minneapolis.

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Duluth diocese files for bankruptcy protection

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DULUTH, Minn. — The Diocese of Duluth said Dec. 7 it has filed for Chapter 11 bankruptcy protection because efforts to reach a settlement “that would assist all abuse victims and protect the church’s mission” have been unsuccessful.

In November, a Ramsey County jury in St. Paul awarded $8.1 million to a 52-year-old man, known only as “Doe 30,” who said that in the 1970s, when he was 13, he was abused by the late Father James Vincent Fitzpatrick. An Oblate of Mary Immaculate, the priest was serving a parish assignment in the Duluth Diocese at the time.

Bishop Paul D. Sirba of Duluth, Minn., where the vicar general has announced the diocese has filed for Chapter 11 bankruptcy protection. (CNS filePaul Haring)

Bishop Paul D. Sirba of Duluth, Minn., where the vicar general has announced the diocese has filed for Chapter 11 bankruptcy protection. (CNS filePaul Haring)

The jury found the diocese negligent in its supervision of the priest and ordered the diocese to pay $4.9 million, or 60 percent, of the amount it awarded to the abuse victim.

“There is sadness in having to proceed in this fashion,” Father James Bissonette, vicar general, said in a statement about the diocese’s decision to file bankruptcy.

“After the recent trial, the diocese again attempted to reach a mutually agreeable resolution. Up to this point, the diocese has not been able to reach such a settlement, and given the magnitude of the verdict, the diocese was left with no choice but to file for reorganization,” he said.

According to the diocese, its operating budget for the last fiscal year was about $3.3 million. Even with insurance coverage and some diocesan savings available, it said, it has insufficient funds to cover the judgment and also provide resources for others who have brought abuse claims.

The bankruptcy filing “safeguards the limited assets of the diocese and will ensure that the resources of the diocese can be shared justly with all victims, while allowing the day-to-day operation of the work of the church to continue,” Father Bissonette said.

He added: “This decision is in keeping with our approach since the enactment of the Child Victims Act,” he added, “which has been to put abuse victims first, to pursue the truth with transparency and to do the right thing in the right way.”

Minnesota’s Child Victims Act, passed in 2013, lifted the statute of limitations for child abuse cases, opening a three-year window for people to sue the Catholic Church over incidents dating back decades. The deadline for filing a lawsuit on older cases is May 2016.

“Doe 30” filed suit in early 2014 in Ramsey County District Court against Father Fitzpatrick’s religious order, the Diocese of New Ulm, where Father Fitzpatrick also had worked in parish ministry, and the Diocese of Duluth.

The Oblates of Mary Immaculate had settled with the victim and a court dismissed the suit against Diocese of New Ulm.

The Survivors Network of Those Abused by Priests, known as SNAP, criticized the diocese’s decision to file for bankruptcy.

“Bishops declare bankruptcy for selfish reasons, not financial ones. They want to keep their reputations, not their assets,” the group said in a statement. “Bankruptcy brings an abrupt halt to disclosures about which clerics committed and concealed child sex crimes. That’s a self-serving strategy for a prelate. It’s a hurtful strategy for parents, police, prosecutors, parishioners, the public and of course victims. It’s morally wrong.”

During the trial in St. Paul, attorney Jeff Anderson, who has represented hundreds of abuse victims in settlement proceedings across the country, argued the Diocese of Duluth should have known the priest presented a danger to children. The abuse occurred one summer when the mother of “Doe 30” allowed her son to spend the summer with Father Fitzgerald to help out as an altar boy in a rural parish.

The diocese’s attorney, Susan Gaertner, told jurors no one disputed the boy had been abused. “It’s awful, absolutely awful,” she said in her opening arguments, but the issue was that the diocese “did not have one piece of information” the priest posed a risk to children.

Headed by Bishop Paul D. Sirba, the 10-county diocese in the northwest part of the state covers more than 22,000 square miles and has a Catholic population of about 53,000 out of a total population of just over 447,000.

On its website, the diocese states that it has had safe environment policies in place since 1992.

“These policies involve mandatory reporting, cooperation with law enforcement, background checks and other safety precautions for diocesan personnel and safety training for children,” it said, “and these policies are continually updated and improved.”

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Milwaukee archdiocese says pensions being paid on time

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MILWAUKEE — All employee benefits have been paid on a timely basis and pension plans will continue to pay all benefits in the immediate future, the Archdiocese of Milwaukee assured pension recipients and contributors in a “media clarification” issued Oct. 26.

The archdiocese issued the clarification in response to an Oct. 25 story in the Milwaukee Journal Sentinel stating that pension funds operated by the Archdiocese of Milwaukee “have unfunded liabilities totaling $41.8 million, according to documents filed as part of the archdiocese’s bankruptcy proceedings.”

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