Delaware priest abuse settlement back in Bankruptcy Court

The Catholic Diocese of Wilmington had hoped a $77-million settlement agreed to in principal with nearly 150 victims of alleged priest sexual abuse would be the end of that chapter in church history.  Now three months later other creditors and plaintiffs are not as satisfied.   

The settlement, if approved by a large percentage of survivors, would end litigation against the Diocese and its parishes.  The Diocese would also release documents indicating how it handled individual cases of suspected abuse.  

Meanwhile, lay employees are concerned about the impact of the agreement on their vested pensions.

Arguments before US Bankruptcy Judge Christopher Sontchi Monday dealt with several issues.  Attorney Robert Brady, representing the Diocese, said the pension plan would need to be frozen, meaning that no one would be added to it in the future.  However, Brady said the Diocese “will honor all accrued obligations.” 

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According to Brady, $2-million would be added annually into the pension trust until it is actuarially sound.  The Diocese would also plan to conduct capital campaigns.

Attorney Thomas Neuberger, who represents an unofficial committee of survivors, said the CDOW filing with the court seeks to restore pension benefits for priests who admitted to abuse.  He also said the Diocese would “dilute” the $77-million settlement for survivors by intending to use it to pay professional fees as the case continues.

“The Diocese intends to saddle survivors with these costs,” Neuberger said.

Lay employees attorney Donald Detweiler said the disclosure statement was incomplete and did not provide adequate information for creditors to make an informed choice.

Several parties also are looking for information on how much individual parishes are contributing to the settlement.  Brady said the Diocese would have no difficulty providing such information, but said one request that the worth and assets of each parish be detailed could result in inaccurate, unaudited information being provided.

The Diocese filed for bankruptcy protection shortly before several trials were to begin in 2009.  The $77-settlement agreement was reached in February.  Since then, the Diocese announced that 22 employees would be laid off and that it would cease publication of its weekly newspaper, The Dialog.

Judge Sontchi is expected to review updated plans and documents later in the week.

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