Milwaukee Archdiocese Proposes $4M in Compensation to Victims

The Archdiocese of Milwaukee has proposed setting aside $4 million to compensate the victims of clergy sexual abuse in its bankruptcy reorganization plan, according to a statement provided to The Associated Press.

The Wisconsin archdiocese filed for bankruptcy in 2011, saying pending sexual abuse lawsuits could leave it with debts it can’t pay. Its creditors include hundreds of people who were sexually abused by clergy. They have accused the archdiocese of covering up priests’ crimes while assigning them to new churches without warning parishioners.

Milwaukee archbishop Jerome Listecki said Wednesday morning that the bankruptcy plan will be filed later in the day.

The archdiocese’s statement said the plan will include $4 million to compensate sexual abuse victims, but that some of that money also could be used to sue the archdiocese’s former insurers to get them to pay victims.

The archdiocese recently reached a deal with one insurer, Lloyd’s, of London, to buy back its policies for an as-yet undisclosed sum. The deal relieves Lloyd’s, which insured the church in the 1960s and 1970s, of liability in regard to the sexual abuse claims.

The reorganization plan also includes money to provide victims with therapy for the remainder of their lives.

The archdiocese said it will raise the $4 million by using its property as collateral for a loan.

Clergy sexual abuse victims had hoped to be paid in part from a more than $50 million cemetery trust fund, but a federal judge ruled last year that the trust fund was off-limits. U.S. District Judge Rudolph T. Randa said that money could be used only to care for and operate Catholic cemeteries.

The creditors committee, which represents sexual abuse victims as well as others with bankruptcy claims against the archdiocese, has appealed that decision.