Editor's note: This story was updated at 12:30 p.m. Saturday, Feb. 1.
The diocese of Helena, Mont., filed for Chapter 11 reorganization in U.S. Bankruptcy Court for the District of Montana on Friday as a major tactical step in achieving a global settlement for 362 sexual abuse claims against "diocesan priests, religious community priests, women religious and lay workers who have served in the diocese," states a diocesan press release issued Friday morning.
If approved, the bankruptcy terms would make $15 million "available to compensate the currently identified victims with additional settlement funds for other unknown victims," the press release said.
"This is not your typical bankruptcy," emphasized the diocese's lead attorney, Michael Patterson, describing the filing as "a consensual, prepackaged bankruptcy."
According to Patterson, about a fourth of the claims in the Helena cases are against members of the Ursuline order which was long active in Montana; about 12 percent are against diocesan personnel; and the balance is “primarily Jesuit related.” The Ursulines are not part of the negotiated settlement underway and have opted not to settle at this time, he added. *
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Once filed, the proposed settlement will be subject to the vote of both victims and creditors, said attorneys for the diocese and plaintiffs.
According to Patterson, the bankruptcy terms would:
- Provide just settlement amounts to victims;
- Exclude and not financially endanger parish and school properties;
- Protect the diocese from future sex abuse claims by establishing funds for them and requiring such claims be channeled through the bankruptcy court.
While the bulk of the settlement will be funded by insurance carriers, $2.5 million will be required from the diocese of Helena, Patterson said, adding that pulling together that amount is already being addressed by the diocese and could include existing funds combined with the sale of non-essential real estate.
"We did not choose to have the diocese file for bankruptcy protection, however, we believe that the bankruptcy process will provide the most efficient resolution for our clients, rather than years of litigation and trials with uncertain outcomes," said Molly K. Howard, an attorney with Datsopoulos, MacDonald & Lind, P.C., in a press release also issued Friday morning.
"Given the age and ill health of many of the victims, this is in their best interest," Howard stated.
Datsopoulos, MacDonald & Lind, P.C. and a four-firm legal team represent 271 of the 362 victims in the global negotiations. The group of plaintiffs filed their case in Lewis and Clark County District Court in Helena in September 2011.
Howard underscored that "the majority of victims in this case came forward to protect future generations of children," and added: "Any resolution will include non-monetary terms to protect future generations of children and respect the abuse survivors."
Both Patterson and plaintiffs' attorneys told NCR they hoped a final settlement would be in place by June.
Some claims date to the mid-1930s but the bulk are from the 1950s through 1970s, attorneys said.
In the diocesan press statement, Helena Bishop George Thomas said "none of those who have been credibly accused remain in active ministry."
* An earlier version of this story incorrectly stated that the Ursulines were a part of the negotiation settlement.
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