New Ulm Diocese to file for Chapter 11 protection
LeVoir says its fairest way to compensate all victims of clerical abuse
NEW ULM — The Diocese of New Ulm is filing for Chapter 11 reorganization as it seeks to settle the lawsuits filed against it as a result of clerical sex abuse of children.
The Minnesota Child Victims Act lifted the statute of limitations for victims of child sex abuse, setting up a three-year period when victims of past sexual abuse could seek damages. That period ended last May, and the Diocese of New Ulm and some of its parishes are facing 101 lawsuits.
The Diocese is the third in the state to seek protection under U.S. bankruptcy laws for its sexual abuse lawsuits. The Archdiocese of St. Paul and Minneapolis, and the Duluth Diocese are the other two. The diocese is filing its petition with the U.S. Bankruptcy Court for the District of Minnesota.
Bishop John LeVoir, head of the New Ulm Diocese, said Friday the diocese is seeking reorganization to assure that all claimants will be fairly compensated with the assets the diocese has available. If the diocese tried to handle each case separately it would exhaust its resources after the first few cases, leaving nothing for the rest of the victims.
“Under Chapter 11, all of the claimants will be considered for compensation,” LeVoir said. “If we were to mediate, case by case, the assets would be exhausted after maybe five or six cases, and the rest of the claimants would get nothing. So this is a way to assure that all of the claimants are considered, and whatever assets we have would be fairly distributed among those claimants.”
LeVoir said the focus of the diocese is on the victims and providing fair compensation for all. It is also concerned with continuing to provide services and ministry to the people of the diocese. He said the reorganization should not affect the operations of the parishes, schools and other organizations within the diocese. There are 55,000 Catholics living within the 15 counties that make up the Diocese of New Ulm.
Last year the Diocese released a list of 16 priests in the diocese who had been credibly accused of sex abuse. It was the last diocese in the state to do so.
Most of the cases of abuse happened in the 1950s to 1970s, and most of the priests involved are dead. None of them are involved in ministry now. The Diocese has also undertaken policy changes, background checks and training for priests and all diocesan personnel to prevent future abuse.
LeVoir repeated his apologies to the “Victims and survivors have shown incredible courage by stepping forward to help prevent such a tragedy from every 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,” LeVoir said.
LeVoir did not disclose the amount of the liability the diocese is facing, or the amount of assets that the diocese has available to handle claims.
“That would be in the documents that will be filed next week by our attorneys,” LeVoir said.
The list of assets for the diocese will be posted later on the diocese’s website, HopeHealingandPeace-DNU.org. The assets include real estate and other property that belongs to the diocesan operations. The diocese is also working with insurers to resolve the claims.
Under Chapter 11, the Bankruptcy Court examines the assets and liabilities, listens to arguments from creditors or claimants and the diocese, and comes up with a plan to decide who gets compensation and how that compensation will be paid. Over time, the plan would provide compensation for all without forcing the diocese to liquidate its assets.
The financial reorganization plan will not include the parishes in the diocese, Catholic schools or other Catholic institutions within the diocese.
Attorney Mike Finnegan, with the Anderson & Associates law firm that has handled most of the cases against the diocese, said the bankruptcy filing “does not stop the pursuit of justice for sexual abuse survivors. Survivors will continue to seek truth and accountability in the bankruptcy process.”
The diocese again encourages anyone who has suffered abuse at the hands of the Diocesan clergy or any other Diocesan staff to report it to local police.