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Notifying Potential Claimants in Diocese Chapter 11 Cases

posted by Pamela Foohey

Since 2004, 12 Catholic dioceses have filed under Chapter 11. The latest case is that of the Archdiocese of St. Paul and Minneapolis, which filed in January 2015. The claims bar date is set for August 3. How should the Archdiocese go about notifying potential claimants -- clergy abuse survivors who have not yet come forward and who may feel ashamed and alone -- that they need to file a claim by the bar date?

Yesterday the official unsecured creditors' committee (which is comprised of five clergy abuse survivors) filed a motion requesting that the bankruptcy court order all 187 parishes to play a 7 minute video in which three abuse claimants explain the necessity of filing a claim by the bar date and talk about, from their unique perspectives, why coming forward, however hard it may be, is important, both for survivors and for the church. (The motion also requests that parishes publish the video on their websites.)

The video is hard to watch. The motion states that the committee tried to come to an agreement with the debtor and the parishes about the video. The motion identifies "cooperation clauses" in insurance contracts that require insured parties (the parishes) to limit the liability of the insurers to the greatest extent possible as the main problem that stalled negotiations. It also is understandable that parishes might not want to show the video or put it on their website simply because it is hard to watch. But ultimately I think that the video is a very worthwhile idea, as a legal and community-building matter.

As a legal matter, the video has the potential to prevent any future arguments about the effectiveness of notice of the bar date to unknown claimants. Though putting notices in papers that parishioners are likely to read likely is sufficient based on case law, showing or posting the video will erase most legal questions that could come up about due process in this unique context. Considering the legal expenses that would accompany these claims I think alone tips the balance toward making the video available.

More importantly, parishes showing and posting of this hard-to-watch video may be the best way to allow parishioners to tell their stories and air their claims at this crucial juncture. The video is not only about the bar date. Many potential claimants likely already know about the bar date, or know enough to be able to figure out when the bar date is if they really wanted to. But they need to want to. And that is what this video is about. The survivors in the video acknowledge how overwhelming and scary it may be to come forward, but press people to be brave because doing so will help create change that the church needs: "It's not an attack on the Catholic church, it's helping the Catholic church to improve and maybe for them [survivors, their families, and other clergy members] to heal as well."

If the parishes do post, publicize, or show the video, when the diocese proposes a plan that includes a settlement figure, unless that figure is woefully low in relation to what claimants received in other diocese cases, I think that abuse claimants will be more likely to accept the figure or, perhaps more importantly to the diocese, will be less likely to take their grievances to the media if they think they should receive more. Parish leaders may cringe when they show the video, but the goodwill they will build in showing it will far exceed their current pain.

Also, in connection with my research into the Chapter 11 cases of other churches (there are about 90 non-Catholic churches that file each year), I've spoken with around 20 pastors and other leaders. These leaders predominately indicate that their congregations benefited greatly from a public "airing" of what was going on, why the church ended up in bankruptcy, and what leaders were trying to do to "right the ship," even if that was hard on the pastors and other leaders at the time. Indeed, this is what the survivors in the video are saying, and in the context of Catholic dioceses, they likely are the people to be saying it. As such, I'd tip toward requiring the parishes to allow them to say it in the way most feasible for the parish, whether that be by showing the video at Mass or by posting it to the parish website and letting people know how to access it.

Notifying unknown claimants in ways better than the bare minimum of what case law currently provides I think is an important issue in the bankruptcy system. The committees' solution in the unique context of the Catholic diocese cases is novel and ultimately could be very productive. Stay tuned for what the bankruptcy court holds; hearing is set for July 9.


Life sometimes makes us not be satisfied and I hope you will be satisfied here.

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