Mediation between Milwaukee archdiocese, creditors ends with no resolution

This story appears in the Milwaukee bankruptcy feature series. View the full series.

by Marie Rohde

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The mediation between the Milwaukee archdiocese and its creditors, most of them survivors of sexual abuse, ended Tuesday without a resolution.

The bankruptcy proceedings were placed on hold pending a decision by the 7th Circuit Court of Appeals related to nearly $60 million that was transferred to a trust fund shortly before the bankruptcy action was filed nearly four years ago.

Archdiocesan officials said the money was always intended for the perpetual upkeep of nine cemeteries but survivors and others said it was done to shelter archdiocesan funds from claims filed in the bankruptcy.

The archdiocese confirmed that the mediation held over the course of four days this month had not resulted in an agreement.

"We will continue to evaluate the plan of reorganization to see if adjustments can be made addressing the concerns raised about the plan and we will rely upon the courts for decisions to keep the Chapter 11 proceeding moving forward," Jerry Topszewski, a spokesman for the archdiocese, wrote in an email to NCR.

The archdiocese filed for bankruptcy in January 2011 on the eve of a number of abuse lawsuits going to trial in state court. Before filing, the archdiocese had sought another mediation and offered approximately 20 claimants about $4 million.

In its proposed plan to settle the bankruptcy, the archdiocese again offered about $4 million, this time to more than 500 victims who had filed claims. Survivors said each of the proposals represented the smallest compensation any diocese had offered in sex abuse settlements.

The federal appeals court decision is expected to be released next month.

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