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US archdiocese's plan offers abuse victims smallest settlement yet in bankruptcy cases

Survivors of clergy sexual abuse Monica Barrett, left, and Peter Isely, center, speak to reporters along with the Rev. James Connell on Wednesday, Feb. 12, 2014, outside the headquarters of the Milwaukee Archdiocese. The archdiocese says it's prepared to set aside $4 million in its bankruptcy reorganization plan to compensate victims of clergy sexual abuse, an amount survivors called insulting. (AP Photo/Dinesh Ramde)

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Survivors of clergy sexual abuse Monica Barrett, left, and Peter Isely, center, speak to reporters along with the Rev. James Connell on Wednesday, Feb. 12, 2014, outside the headquarters of the Milwaukee Archdiocese. The archdiocese says it's prepared to set aside $4 million in its bankruptcy reorganization plan to compensate victims of clergy sexual abuse, an amount survivors called insulting. (AP Photo/Dinesh Ramde)

MILWAUKEE - The Archdiocese of Milwaukee said Wednesday that it was prepared to set aside $4 million in its bankruptcy reorganization plan to compensate clergy sexual abuse victims, an amount one victim called "obscene" in its stinginess.

Milwaukee is one of 11 Roman Catholic dioceses nationwide to file for bankruptcy in the past decade. If approved by a judge, Milwaukee's reorganization plan would provide the smallest per-victim payments yet in these cases — roughly $32,000 each for 125 victims. The actual amount each victim receives would be based on individual circumstances.

Other Catholic dioceses have paid victims hundreds of thousands of dollars, and Milwaukee victims said they thought $400,000 per person would have been a reasonable offer. Of the seven dioceses to resolve their bankruptcies thus far, all have had per-victim payments of more than $100,000, according to BishopAccountability.org, which collects data and documents related to clergy sexual abuse. Only Fairbanks, Alaska, paid less — about $38,000 per victim.

In addition, more than three-fourths of the people who filed claims against the Milwaukee archdiocese in bankruptcy court would receive no compensation, either because they previously received settlements or because their abuser was not a diocesan priest.

"This plan is obscene," said Peter Isley, who was abused by a priest working in southeastern Wisconsin but assigned to a religious order. Isley added, "I think even the most hard core Catholics are going to find this upsetting and unacceptable."

Milwaukee Archbishop Jerome Listecki acknowledged that some victims would be upset.

"No amount of money, basically, is enough to compensate for the loss," he said. "So I think that's first and foremost important to realize. I think the wonderful thing at least about the plan is that we provide therapy for all abuse survivors for as long as they need it. In my discussion with some victims, they said how important it was that therapy is there ... no amount of money will make them whole."

The archdiocese filed for bankruptcy in 2011, saying pending sexual abuse lawsuits could leave it with debts it couldn't pay. It had already paid $33 million in settlements to victims.

Most Milwaukee claims relate to abuse that happened before 1990. Records released last summer showed most victims who settled with the archdiocese over the years received about $50,000, along with the cost of therapy.

Outside the archdiocese's lakefront headquarters Wednesday, victims decried the plan, saying the offer paled in comparison to how much the church spent on legal fees and severance to abusive priests.

"For the archdiocese to offer this to victims is just insulting. It is much like being raped all over again because we've had to fight for decades to even get to this point," said Monica Barrett, who was assaulted at age 8. "And now, (Listecki) looks at us and says, 'I'm sorry we're out of money.' Well, you know what? I don't buy that. We are standing on property that's worth millions and millions of dollars."

The archdiocese said it would raise half of the $4 million by using some property as collateral for a loan from a controversial cemetery trust fund created under New York Cardinal and former Milwaukee Archbishop Timothy Dolan.

The more than $50 million trust fund has been the subject of a long court fight, with victims arguing the money should be used to pay them and church officials maintaining it was donated for the care of cemeteries and must be used for that purpose.

A federal judge ruled the trust fund off-limits last year in a decision that has been appealed by the archdioceses' creditors, including sex abuse victims.

The reorganization plan would end that appeal, providing the archdiocese with a loan it would have to repay with interest.

Tim Nixon, the cemetery trust fund's attorney, said the deal would end costly litigation and ensure the trust fund isn't depleted.

"There is nothing that can undo the evil that was done to the victims of sexual abuse. There was an evil perpetrated on them, and everybody wishes there was something," Nixon said. "However, the cemetery trust money was put aside for a specific purpose, for other people who were hurting, for deceased people, and we need to protect that money too."

Mark Doll, chairman of the archdiocese's finance council, said the archdiocese was limited in how much it could borrow because some of its properties were already mortgaged. For example, it took out a $4.65 million loan against its headquarters to help pay victims in California.

The reorganization plan calls for the archdiocese to borrow money to pay an estimated $5 million in bankruptcy costs. It would emerge from bankruptcy with at least $7 million in debt, Listecki said in his weekly email to church members.

The other $2 million for victims will come in part from a settlement with Lloyd's of London, which insured the church in the 1960s and 1970s. Lloyd's agreed last year to buy back its policies, relieving it of liability for sexual abuse claims.

The archdiocese has been pursuing similar deals with other former insurers, and its reorganization plan would allow it to use some of the $4 million for that litigation. The archdiocese has not outlined how much it hopes to gain from that effort.

___

Associated Press writer Dinesh Ramde contributed to this report.

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