The Archdiocese of Milwaukee, which filed for Chapter 11 bankruptcy on January 4, 2011, failed last week to reach an out-of-court settlement with those to whom it owed money, namely victims of sexual abuse.
With mediation over, the archdiocese must now return to costly bankruptcy court proceedings to come to an agreement with those filing suit against it.
“The archdiocese had spent about $7.2 million as of Aug. 1 for attorneys and consultants on both sides, and more than $300,000 in fees has been added since then, according to court records,” the Milwaukee Journal Sentinel reported on Oct. 15.
Unlike many other court proceedings, in bankruptcy court, the debtor (in this case the archdiocese) has to pay legal and court fees for both sides.
While the archdiocese remains hopeful that a settlement can be reached out of court, the collectors are focusing on their next move. At a hearing, attorneys said they plan to sue the archdiocese to consolidate and determine its net worth, pursue millions of dollars worth of archdiocese insurance coverage, establish whether or not the archdiocese owns its Cousin’s Center headquarters and determine whether the archdiocese’s donors and “Faith in Our Future” campaign were fraudulent financial transfers.
In 2002, the Rev. Timothy Dolan, now a cardinal and the current archbishop of the Archdiocese of New York, was appointed archbishop of the Archdiocese of Milwaukee. During his time in Milwaukee and since then, the diocese has done much to combat the scandal of clerical abuse and make financial ends meet.
While the financial troubles of the archdiocese have had far-reaching effects on ministry in Milwaukee, they have not affected Marquette to any great degree.
“I am not aware of any direct effect of the archdiocese’s bankruptcy on Marquette,” said Stephanie Russell, the vice president for mission and ministry at Marquette.
From the outpouring of victim claims in the 1990s to the bankruptcy filing last year, the affair has been long and drawn-out and shows few signs of ending soon.