$210 million St. Paul Archdiocese bankruptcy settlement approved

It was a day that some clergy abuse survivors thought might never happen.

In a courtroom crowded with survivors and attorneys, a bankruptcy judge on Tuesday approved a $210 million settlement between the Archdiocese of St. Paul and Minneapolis and more than 400 survivors, the largest such settlement in the nation.

It took nearly four years of legal wrangling to arrive at that moment, one of the longest such bankruptcies involving the Catholic Church.

"It took longer than I expected; it took longer than it should have," U.S. Bankruptcy Judge Robert Kressel lamented in approving the plan.

The archdiocese can now move forward with a financial reorganization, and parishes that employed the abusers can forgo future legal claims.

For the sex abuse survivors, many of whom attended the hearing, the approval meant the closure of a critical chapter of their ordeal.

"All the emotions are swirling around — relief, joy, sadness," said David Lind of Cottage Grove, holding back tears. "It hasn't sunk in yet. It won't be real until the judge signs [the order]."

Archbishop Bernard Hebda took the witness stand during the hearing. He praised the survivors for their "persistence and courage" and for their role in making children safer.

"I am so very sorry for the horrific things done to you by people you should have been able to trust," Hebda said.

Fifteen U.S. dioceses and archdioceses have declared bankruptcy following a surge in sex abuse claims, according to Bishop Accountability, a Massachusetts-based nonprofit that has documented clergy misconduct since 2003.

The Minnesota settlement is the largest reached through bankruptcy nationwide, said Terry McKiernan, Bishop Accountability president. The Los Angeles Archdiocese reached a $660 million settlement with victims in 2007 but did not file for bankruptcy.

"The settlement is definitely on people's radar screen around the country," said McKiernan.

The money will be placed in a trust fund, which will be allocated by a trustee to abuse victims based on the severity of their cases. The minimum payment will be $50,000.

The goal is to have most of the payouts made by the year's end, attorneys said.

Attorney fees also come out of the settlement. It will pay for about $10 million of the $20 million that the archdiocese has spent on attorney fees; its primary legal counsel is the law firm of Briggs and Morgan. The law firm representing survivors, Jeff Anderson and Associates, is expected to take an average of about 30 percent from the individual settlements of its clients.

Jamie Heutmaker, sexually abused as a teenager by a priest at his St. Paul church, said he hoped the settlement, along with the continuing national headlines about clergy abuse, would convince skeptics that the sex abuse was real not just in Minnesota but worldwide.

"I think people are beginning to see all of the ugliness that has gone on for decades," said Heutmaker.

Hebda said the archdiocese's budget will remain "lean" as it moves forward. Of the $210 million, $170 million will be paid by parish and archdiocese insurers. The remaining $40 million will come from the archdiocese and parishes, which will contribute $3 million, said Tom Abood, chairman of the archdiocese's reorganization task force.

The archdiocese sought Chapter 11 bankruptcy protection in January 2015 following a wave of sex abuse claims. The lawsuits came in response to the Minnesota Child Victims Act, which opened a three-year window for older abuse claims to go to court.

The ensuing lawsuits tore open the curtain covering the archdiocese's method for handling priests who sexually abused children. The suits exposed a pattern in which those priests had been moved from church to church, with new children being abused at each location. The lawsuits spurred the release of the names of what are now 91 clergy members identified as sex abusers.

The fallout continued as then-Archbishop John Nienstedt resigned following a string of allegations that he failed to protect children from clergy he should have known posed a threat. The Rev. Kevin McDonough, former vicar general, was removed from the chancery for the same reason.

The archdiocese also was forced to sell its chancery and other assets to prepare itself for a settlement. And it instituted new policies meant to better shield children from falling prey to any sexual predators within its ranks.

Jim Keenan was sexually abused by Thomas Adamson, a former priest known to have abused others before him, and who acknowledged in a 2014 deposition that he had sexually abused 10 boys. Keenan has been the chairman of the creditors committee representing survivors.

"Today is a great day," Keenan said. "It means the end of a big part of a very long journey."

Anderson has represented most of the claimants. After the hearing, he pulled a group of them aside and praised them for stepping forward and sharing their often wrenching experiences.

"Every single survivor stood up for his or her truth, and for the other children who now won't be harmed," an emotional Anderson told them. "Individually and collectively, you've become part of the child protection movement of America."

Jean Hopfensperger • 612-673-4511