Milwaukee Archdiocese Seeks Insurance Settlements in Abuse Cases

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The Archdiocese of Milwaukee may be poised for a settlement with its insurance companies that could fast-track a resolution of its long-running bankruptcy case. But attorneys for sex-abuse victims are objecting, saying those who have claims against the church deserve a voice in any settlement talks.

The archdiocese has asked a judge to stay its lawsuit against insurance companies for 60 days. The move that would allow the parties to enter mediation. Presumably it would also put on hold the judge’s pending decision on whether the insurers are liable for sex-abuse claims against the church, the Milwaukee Journal Sentinel reported.

But victims’ attorneys oppose the stay because they want the case to keep moving forward. They’re also concerned that if the victims are denied input, the archdiocese and insurance companies could agree on an unreasonably low settlement figure.

“We need a decision on the insurance coverage to guide the parties,” said attorney Michael Finnegan, whose law firm represents most of the 570-plus sex-abuse victims who filed claims in the bankruptcy. “And we are concerned about any talks between the insurers and the archdiocese that do not include survivors.”

Archdiocese spokesman Jerry Topczewski said in an email the church is committed to doing whatever it can to move the bankruptcy forward.

The motion comes at a critical point in the bankruptcy. U.S. District Judge Rudolph T. Randa is expected to rule soon on whether the church can use its insurance policies to fund a bankruptcy settlement. The policies, which could be worth tens of millions of dollars, are one of the last large pools of money available for settlement purposes.

Randa has already ruled that the church couldn’t be forced to tap any of the $50 million or more it holds in a cemetery trust because doing so would burden its free exercise of religion under the First Amendment. The creditors have appealed that decision, but the appeal is on hold pending Randa’s decision to on a request from credits to recuse himself from that case.

The archdiocese filed for Chapter 11 bankruptcy protection almost three years ago to deal with its mounting sex-abuse claims.