Troubled Delaware Catholic Diocese Releases Bankruptcy Plan
The Catholic Diocese of Wilmington, Delaware, has announced the plan that it will follow to reorganize after emerging from bankruptcy.
The plan includes details on how the troubled diocese will face more than 100 civil lawsuits in the near future.
The lawsuits are in connection to claims of abuse by priests. These accusations and the accompanying lawsuits led the diocese to file bankruptcy last year, according to an article in Delaware Online.
The diocese had to announce the reorganization plan as a result of bankruptcy procedure, said Wilmington Bishop Francis W. Malooly. The reorganization plan is not, he said, a result of conceding that the church would discontinue its attempts to settle with individuals claiming abuse outside of court.
“While the plan is not supported by all creditors at this time,” he said in a statement, “its filing comes after months of negotiations. A global settlement remains our goal, and negotiations are ongoing.”
The plan will put the diocese’s assets, which include cash, insurance policies and real estate holdings, into a single place, known as a “pot” of funds.
This pot of funds will then be divided between the diocese’s creditors, which includes 151 individuals suing for abuse damages in civil cases.
However, the value of the insurance policies is still unknown. According to diocese bankruptcy attorney Anthony Flynn, the policies could potentially make up the largest part of the compensation pot.
According to WDEL, the plan proposes that some abuse survivors who were victims of diocese priests would be repaid $75,000 each, and victims of religious order priests would receive $25,000.
There is opposition to the bankruptcy reorganization plan, however. Delaware attorney Thomas Neuberger expressed a strong negative reaction to the 40-page plan in a press conference.
Before that press conference, he called that plan “a mean-spirited, vindictive, hypocritical act, maliciously intended to prolong the suffering of survivors.”
One issue under contention is an investment pool that the diocese shared with other parishes and affiliates. The bankruptcy judge in the case decided that it should be included in the reorganization plans. The diocese, on the other hand, is appealing that ruling.
Parishes that had money in the investment pool will be able to include themselves in the list of those filing to get money back from the overall pot meant to pay of creditors.
Neuberger took issue with the arrangement of the repayment plan, and said in a press release that he felt that the plan puts the repayment of parishes and Catholic affiliates ahead of the restitution of abuse victims.
Malooly, on the other hand, said that the plan enables the diocese to “fulfill its legal and moral obligation to survivors, while continuing our charitable, educational and spiritual ministries.”
“There should be no tension between our obligation to compensate those who have suffered so grievously by priests in whom they placed their trust,” he continued, “and our duty to continue the works of the Church in this diocese.”
The bankruptcy judge must approve the reorganization plan before it will go into effect, which Delaware Online said is expected to take at least several months.
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