Individual abuse victims will now have their say in the $37 million Roman Catholic Diocese of Davenport bankruptcy settlement.Judge Lee Jackwig of U.S. Bankruptcy Court for the Southern District of Iowa on Wednesday approved the disclosure statement that explains the diocese's reorganization plan to emerge from Ch. 11 bankruptcy protection.
Jackwig still must OK the plan for it to take effect. A hearing is set for April 30.
Attorneys said Jackwig's approval of the disclosure statement was a good sign.
"If the plan was patently unapprovable, she would not have approved the disclosure statement," said Hamid Rafatjoo, the Los Angeles-based attorney for the committee representing abuse victims in the case.
Creditors also must OK the plan, and the disclosure statement will be mailed them this week to help them decide how to vote. There are about 180 creditors, with about 160 of them victims of sexual abuse by diocese priests.
Ballots must be returned by April 23, and at least half of them must be in support of the plan for it to be approved.
Mike Uhde of Davenport, an abuse victim and co-chairman of the committee representing victims who filed claims in the case, said the plan received the unanimous support of the seven-member committee.
"We're very hopeful that we'll get a real strong approval" from creditors, he said.
There will be meetings in Iowa City and the Quad Cities and telephone conferences with creditors to go over the plan, Uhde said.
The approval of the creditors committee and the judge would be among the final steps in resolving the bankruptcy case. The diocese filed for bankruptcy in October 2006, saying it did not have the money to settle the claims stemming from its clergy sexual abuse scandal dating back several decades.
The diocese and the creditors committee negotiated a $37 million settlement in November that calls for the diocese to pay $17.5 million, with the other $19.5 million coming from its insurance carrier, Travelers Cos. of St. Paul, Minn. The settlement also has 17 nonmonetary terms demanding the diocese acknowledge the abuse and take measures to prevent similar acts in the future.
At a hearing last month, Jackwig did not approve the disclosure statement because of concerns she had about the inclusion of the diocese's 83 parishes in the reorganization plan because the parishes are incorporated separately from the diocese.
The plan releases all of the parishes and the diocese's 23 schools from liability for abuse that happened before the bankruptcy filing. Four parishes, including St. Mary's in Iowa City, will contribute a total of $2.65 million to the settlement. The parishes were selected because they were the only ones with significant claims against them that had money to contribute, diocese attorney Richard Davidson said.
He added that the insurance company would not settle unless the parishes and schools where included for fear that victims could sue those individual entities and costly litigation could continue for years.
On Wednesday, Jackwig indicated she still had some concerns.
"We'll certainly be working on that to make sure she's satisfied," Davidson said after the hearing. +++++++++++++++++++++++++++++++++++++++++++++++++++
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