Bankruptcy case closed


By Barb Arland-Fye

DAVENPORT — The Davenport Diocese’s bankruptcy case is closed nearly six years after its attorneys filed a Chapter 11 petition and four years after the diocese reached a $37 million settlement with creditors.
Bankruptcy Judge Lee Jackwig entered the final decree June 15 in the U.S. Bankruptcy Court for the Southern District of Iowa, following a teleconference call between attorneys for the diocese and victims of clergy sexual abuse, who were the major creditors in the bankruptcy case.  Judge Jackwig noted that the diocese has met the requirements of the bankruptcy plan, but must continue to comply with ongoing nonmonetary terms as set forth in the plan.
Among the ongoing nonmonetary terms are posting on the diocesan website the names of all credibly accused perpetrators, providing outreach to survivors of clergy sexual abuse and publishing announcements about training for prevention of abuse.
“I am certainly pleased we are finally able to bring this to conclusion,” Bishop Martin Amos said. “The bankruptcy process provided the best opportunity for healing and for the just and fair compensation of those who have suffered sexual abuse by priests in our diocese. The settlement also provided the best way to continue the Church’s mission in our diocese. While the bankruptcy process has closed, it will not end the suffering by some survivors of abuse. I pray that the healing process of the survivors of abuse will continue. We will keep vigilant for the protection of children and young people.”
The diocese filed for Chapter 11 bankruptcy Oct. 10, 2006, two days before the Vatican announced that Bishop Amos would become the new bishop of the Davenport Diocese. Chapter 11 typically is used to reorganize a business so that creditors are paid and the organization survives. The bankruptcy filing followed a jury’s decision to award $1.5 million to a survivor of clergy sexual abuse and came two years after the diocese reached a $9 million out-of-court settlement with 37 survivors.
In spring 2008, Judge Jackwig approved a reorganization plan for the Davenport Diocese and a $37 million settlement with creditors following arduous negotiations between attorneys. The financial settlement was funded with $33.1 million in cash and the transfer of the diocese’s chancery property, which had an appraised value of $3.9 million. Cash payment to the settlement trust came from a $19.5 million settlement payment by Travelers Insurance, a $5.9 million payment by Catholic entities and a $7.7 million payment by the diocese.
The plan allowed the diocese to emerge as a new entity, but required the sale of chancery property. The diocese purchased back the chancery and some surrounding acreage from the buyer, St. Ambrose University of Davenport, after a successful capital campaign.
Rand Wonio, an attorney with Lane & Waterman LLP, which represents the Davenport Diocese, said he and the diocese do not know how much of the $37 million settlement has been distributed to victims of clergy abuse. A court-appointed arbitrator decided which of the 165 creditors received a settlement and for how much. The bankruptcy court ordered a separate fund to be established from the settlement for clergy sexual abuse survivors who came forward after confirmation of the diocese’s reorganization plan. That fund is not handled by the diocese.
The Davenport Diocese also was responsible for paying fees for the diocese’s and the trustee’s attorneys, other professionals and administrative costs throughout the bankruptcy process. Administrative expenses for the diocese totaled $1.76 million, said Char Maaske, chief financial officer for the Davenport Diocese.
Three annual reports on compliance with nonmonetary commitments, as required by the bankruptcy court, were submitted beginning in spring 2009. The diocese anticipated a final submission date of spring 2011. However, “a busy court and a conscientious judge wanting to be thorough” required more time to conclude the case, Wonio said. A sticking point had been the insistence by creditors’ attorneys that names of all accused clergy be published, whether or not allegations were credible. Judge Jackwig denied that request.
The judge also ordered the diocese to post the names of two lay people that a private investigator found to be credibly accused of abuse that occurred decades ago. The Diocesan Review Board meets in early July to hear the private investigator’s report on those cases, Wonio said.

Nonmonetary commitments as part of bankruptcy

The following list identifies the 18 nonmonetary commitments the Diocese of Davenport made as part of its 2008 bankruptcy settlement with creditors, most of whom are survivors of clergy sexual abuse. The diocese has satisfied all requirements, but some are ongoing.
1. The Davenport Diocese will undertake the following non-monetary obligations within 30 days after the effective date, unless otherwise noted.
2. Publicize names of perpetrators.
3. For at least nine years, post a prominent link on the home page to the names of all known perpetrators.
4. The bishop will personally visit each parish in which abuse occurred or where perpetrators served.
5. For nine years, provide information in parish bulletins and The Catholic Messenger with Victim Assistance Coordinator contact information and encourage survivors to contact health care providers.
6.  Four times per year for five years and one time per year for 20 years, publish a prominent statement in The Catholic Messenger urging abused persons to report any abuse.
7.  The bishop will publicly support complete elimination of all criminal statutes of limitation for child sexual abuse committed by clergy or others in similar positions of authority.
8.  For two years, allow any claimant to speak publicly in the parish where he/she was abused at a time mutually agreed upon.
9. For two years, make available reasonable space in each issue of The Catholic Messenger for claimants to publish stories of their abuse.
10. Will not refer either verbally or in print to the tort claims or tort claimants as “alleged” claims, “alleged” victims or “alleged” survivors.
11. The bishop will send letters of apology to any tort claimant who requests a letter or, if requested by immediate family members.
12. All confidentiality agreements involving sex abuse survivors shall terminate to the extent that perpetrators’ names, Church knowledge of abuse may be made public.
13. Continue to provide outreach for survivors. The Victim Assistance Coordinator will report to the Diocesan Review Board.
14. Announce information regarding prevention of abuse, training to identify signs of abuse, statements that the abused individuals are not at fault, and encourage the reporting of abuse.
15. Adopt a whistle blower policy concerning the method by which a report concerning abuse within the diocese can be made.
16. Statement by the bishop and all priests that they have not sexually abused any minor and have no knowledge of abuse.
17. Post a plaque prominently displayed in each school.
18. Make a full written report to the Apostolic Nuncio for appropriate action to be taken with respect to Bishop Lawrence Soens (a former priest of the diocese and now retired bishop of the Sioux City Diocese).


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