Talks between Milwaukee Archdiocese, bankruptcy creditors continue

 

By Annysa Johnson of the Journal Sentinel

The Archdiocese of Milwaukee and its bankruptcy creditors have failed to reach a settlement after two days of negotiations, but the parties have agreed to continue settlement talks in two weeks.

The parties are scheduled to return to the negotiating table for two more days of talks Sept. 22 and 23, said Michael Finnegan, whose St. Paul, Minn., law firm represents most of the 575 men and women who have filed sex abuse claims in the bankruptcy.

He declined to comment on the round of talks that concluded Tuesday in Minnesota, or to speculate about prospects for a settlement.

Jerry Topczewski, chief of staff for Archbishop Jerome Listecki, who was in Minnesota for the meetings, could not be reached for comment.

The archdiocese sought the mediation in hopes of emerging out of its nearly 4-year-old bankruptcy. Legal fees in the case have topped $13 million.

The mediation included lawyers for the archdiocese; its creditors committee, which is composed of sex abuse victims; and the $60 million trust created by the archdiocese for maintenance of its cemeteries. U.S. Bankruptcy Judge Susan V. Kelley also urged the archdiocese's insurers to take part, but it was not clear whether they did.

The mediation appears to be a last-ditch effort to come up with a negotiated settlement before the U.S. 7th Circuit Court of Appeals issues its ruling on a key question related to the cemetery trust. At issue is whether forcing the archdiocese to tap even $1 of the cemetery trust to fund the bankruptcy estate — and ultimately pay sex abuse settlements — would violate its free exercise of religion.

The archdiocese says it would. The creditors committee — which is composed of abuse victims but represents all creditors — rejects that argument.

A decision favoring the creditors would likely spawn a new round of costly court battles in the case.

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