Clergy abuse victims settle with Twin Cities archdiocese for $210M

The wrenching bankruptcy that forced a reckoning on the Archdiocese of St. Paul and Minneapolis for decades of clergy sexual abuse has culminated in a $210 million settlement for roughly 450 victims, the largest of its kind nationwide.

The settlement, announced Thursday, still must be approved in bankruptcy court, but would place the money in a trust fund for the claimants, with payments based on the severity of the abuse they endured. In return, they would be prohibited from pursuing further legal action against the archdiocese or its parishes.

"This has been a long time coming," said Jim Keenan, chairman of the abuse survivors committee in bankruptcy court. "It's a triumph. I believe we have made the world a better, safer place."

Archbishop Bernard Hebda said the settlement brings "definitive resolution … that allows the local church to carry on with its mission."

"I recognize that the abuse stole so much from you," Hebda added, addressing victims directly at a news conference at the archdiocese offices. "Lives were forever changed. The church let you down. I am very sorry."

The archdiocese has also been changed.

It sought bankruptcy protection in January 2015, following an avalanche of clergy abuse lawsuits. The cases were sparked by the passage of the Minnesota Child Victim's Act, which opened a three-year window for older abuse cases to have their day in court.

Its hand forced, the archdiocese went on to publicly identify 91 clergy members who had been sex abusers, and 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. Former vicar general the Rev. Kevin McDonough was removed from the chancery for the same reason. The archdiocese also was forced to sell off land 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.

Victims' attorney Jeff Anderson said at an emotional news conference in his office more than 100,000 documents related to abuse have been released by the archdiocese and many of them made public because of the litigation.

"You have a story of trauma, and triumph, and the pursuit of truth and accountability," said Anderson, who has for decades represented people alleging sexual abuse by priests.

He paused and teared up, explaining that he had "feelings overwhelming me in this moment."

The Twin Cities settlement "is the largest diocesan bankruptcy settlement" in the United States, said Marci Hamilton, an expert on child abuse legislation and a professor at the University of Pennsylvania.

"It is very significant," said Hamilton. "It shows that this [Child Victims Act] legislation created the possibility for an orderly settlement of claims."

The settlement is the largest bankruptcy settlement ever made by an archdiocese or diocese. The Los Angeles Archdiocese reached a $660 million settlement with victims in 2007 but did not file for bankruptcy. That was the highest payout by any diocese or archdiocese, to date, she said.

Chuck Turning was among the abuse survivors watching Thursday's news conference from the back of the room. Tears streamed down his face. He said his mother always believed him when he told her years ago that he'd been sexually abused by a priest. But the archdiocese never did.

It was a great day, he said, because the archdiocese was finally acknowledging its failures. "This is cathartic,'' Turning said.

The $210 million settlement is $50 million more than the archdiocese had offered in a previous reorganization plan. The bulk of the settlement, $170 million, will be paid by the more than 20 insurance carriers of the archdiocese and local parishes, said Tom Abood, chairman of the archdiocese's reorganization task force.

The remaining $40 million will be paid by the archdiocese and individual parishes, he said.

Attorneys' fees, which will come out of the survivors' trust fund, have yet to be negotiated. The archdiocese still owes $10 million of the roughly $20 million it has accrued in attorney fees, Abood said. Fees for the survivors' attorneys are estimated at a third of each individual's settlement.

Anderson said he hoped that the settlement fund, which will be handled by an appointed third-party administrator, could be distributed by the end of the year.

U.S. Bankruptcy Court Judge Robert Kressel still must sign off on the agreement, but given that all parties agree, Anderson said approval is all but assured.

The settlement came after three years of mediation and as the archdiocese was under increasing pressure from supporters, top donors and survivors to reach a deal. Both sides focused last year on preparing competing reorganization plans for Kressel, who vetoed both and sent them back to mediation in December.

The pace of mediation picked up in recent months, attorneys said. It was aided by Kressel's sense of urgency, said Hebda, and a May federal appeals court decision affirming that parish assets were independent and could not be tapped for the bankruptcy case. Victims' attorneys had proposed using those assets in the settlement.

Archdiocese leaders have been concerned a massive settlement could compromise the church's ability to carry out the missions of youth education, support for the poor and pastoral care among the Twin Cities' estimated 800,000 Catholics.

Nationally, 15 dioceses and archdioceses have declared bankruptcy in recent years, according to Bishops Accountability, a database tracking clergy abuse. Only the Milwaukee diocese's case lasted more than four years. San Diego wrapped things up in seven months. Observers have said most cases settled within a year or two.

Hebda said he is grateful a settlement has been reached.

"While today marks the end of a difficult period for many, today really signals a new beginning," said Hebda. "The completion of the bankruptcy process allows pursuits of a new day — atonement, healing and restoration of trust."

For Minnesota's longtime victim advocates, it was a remarkable day. Bob Schwiderski, who was sexually abused as a boy by a priest, spent decades trying to help others and to force the archdiocese to acknowledge what was happening in its churches.

"This is not about money," Schwiderski said. "It's the fact that society has awakened to the fact that you have to protect children. Now parents know that if a child says something, they should listen. Law enforcement knows to listen. Teachers know to listen.

"And children know it's safe to speak up."