IMPORTANT DATES AND DEADLINES
|Effective Date of the Plan||September 26, 2011|
|Confirmation Hearing - Continued||July 28, 2011 at 9:00 a.m. (Eastern)|
|Confirmation Hearing - Continued||July 14, 2011 at 9:00 a.m. (Eastern)|
|Confirmation Hearing||July 8, 2011 at 10:00 a.m. (Eastern)|
|Modified Bar Date for Lay Employees||June 24, 2011 at 4:00 p.m. (Eastern)|
|Disclosure Statement Hearing||May 16, 2011 at 11:00 a.m. (Eastern)|
|Bar Date for Filing Proofs of Claim||April 15, 2010 at 4:00 p.m. (Eastern)|
Bishop Malooly issues statement
on the filing of the Amended Plan of Reorganization
January 11, 2011 - (Wilmington, DE) - The Most Rev. W. Francis Malooly, Bishop of the Catholic Diocese of Wilmington, has issued the following letter to parishioners on the filing by the Catholic Diocese of Wilmington, Inc. of its Amended Plan of Reorganization:
My Dear People:
Last night we filed with the Bankruptcy Court an Amended Plan of Reorganization that we believe offers an important choice for survivors of sexual abuse by diocesan priests. The choice is between an immediate, estimated $74-million global settlement of abuse claims against the Diocese and its parishes, and a pared down option using the assets only of the Catholic Diocese of Wilmington, Inc. alone, which would provide perhaps $15 million, depending on the outcome of litigation, to compensate all creditors and resolve claims against the Diocese alone. Both options would bring the Diocese out of bankruptcy, but the latter would leave much litigation still unsettled, the cost of which would further dilute compensation to creditors.
Option One of the Amended Plan, the Settlement Plan, is informed by months of mediation conducted by a federal judge and a retired state court judge with representatives of abuse survivors, lay employees, insurers and others. It also is informed by the outcomes of recent court cases, and, especially, by soul-searching discussions within the diocesan family. These discussions have led to an offer by entities affiliated with the diocese but not involved in the bankruptcy filing to provide more than $60 million of their own assets in hopes of bringing the bankruptcy to a successful conclusion - meaning a solution that fairly compensates abuse survivors while safeguarding the future of our parishes and schools, and making sure that the Diocese is able to meet its pension obligations to all employees and continue important ministries.
These non-debtor Catholic entities, to use the legal term, include the Catholic Diocese Foundation, Catholic Cemeteries, Siena Hall, Seton Villa, Children's Home, and the parishes themselves. The condition on which they are making their assets available is that the parishes, and all diocesan-related entities, be released from all litigation.
Lawyers for some survivor-claimants have said that the parishes want to buy their way out of litigation cheaply. But a settlement fund of $75 million - two-thirds of which would come from the non-debtor entities - is hardly cheap. It would result in average compensation of approximately $750,000 for survivors of abuse by diocesan priests - far higher than the amounts recovered by claimants in other diocesan bankruptcies. Depending on the grievousness of the harm suffered by a survivor, as determined by an independent judicial process, compensation to individual survivors is expected to range from $75,000 to $3 million.
The Settlement Plan would entail severe sacrifices in the diocesan family. For example, because the Catholic Diocese Foundation would shoulder the largest financial burden - almost $63 million - the plan would end the Foundation's historic role as the primary underwriter of the building of schools and churches, and the provider of financial support for a myriad of other good works. Property, including the Bishop's home, will be sold, ministries will be curtailed, and some layoffs will be necessary.
In the event that claimants vote to reject the Settlement Plan, the fallback would be Option Two, the Diocese-Only plan, which we view as a far inferior alternative. Under this plan, money available to survivors would be limited to the assets of the Catholic Diocese of Wilmington, Inc., the sole entity named in the Chapter 11 filing.
After set-asides for health insurance, workers compensation and administrative expenses relating to the bankruptcy, the estimated total of assets available for distribution could be as little as $15 million, depending on the outcome of the Pooled Investment Account litigation. This amount would then be apportioned among all creditors, including abuse survivors and pension beneficiaries.
Under both the Settlement Plan and the Diocese-Only Plan, steps would be taken to shore up the financial security of the employee pension plans. The claims of our other creditors, principally Allied Irish Bank, also would be addressed under both plans.
The Amended Plan also further enhances the voluntary undertakings by the Diocese, and by me, offered in the original plan. These non-monetary provisions are designed to further promote healing and reconciliation, and reaffirm the commitment of the Diocese to preventing sexual abuse. In addition to our continued compliance with the Charter for the Protection of Children & Young People adopted by the U.S. Conference of Catholic Bishops in 2002, and our vigilant implementation of the For the Sake of God's Children program established by the Diocese in 2003, the non-monetary provisions of the Plan include making publicly available documents in diocesan files related to sexual abuse by abusive clergy, religious and lay employees. These undertakings are the most extensive ever offered in a diocesan bankruptcy or settlement of clergy sex abuse claims.
We expect that the Court will consider and approve a disclosure statement by mid-February at which time creditors will be given the opportunity to vote on the Diocese's plan options. We anticipate that a plan will be presented to the Bankruptcy Court for confirmation in April, and the Diocese will emerge from Bankruptcy under one of these options shortly thereafter. Further litigation obviously could delay this schedule, but I sincerely hope that all parties will agree it is time to end the more than $800,000 per month in legal and professional fees being incurred by the Diocese in the bankruptcy process, all of which reduces the amount available for creditors
As I said when we filed for bankruptcy in October of 2009, our goal is to fairly compensate all survivors of clergy sexual abuse in our diocese and to assure the continuation of our charitable, educational and spiritual ministries. The Settlement Plan fulfills both goals since the vast majority of our ministry happens on the parish/school level.
I ask you to join me in prayer that this plan is approved by our creditors without delay so we can end this bankruptcy and begin the healing process.
Most Rev. W. Francis Malooly
Bishop of Wilmington
Contact: Bob Krebs