Q: What is happening with the diocese’s bankruptcy reorganization case?

A: On March 10, 2020, U.S. Bankruptcy Court Judge Robert Kressel gave final approval to the $34 million settlement between the Diocese of New Ulm, parishes within it, and 93 claimants who filed sexual abuse claims against the diocese and parishes. Claimants voted unanimously to approve the settlement. This clears the way for survivors of sexual abuse to begin to receive compensation under the settlement and marks the end of a three-year bankruptcy process for the Diocese of New Ulm.

Q: When will claimants receive compensation and how much will they receive?

A: A trustee and claims reviewer, working independently from the diocese, will determine the amount of compensation each survivor will receive and plan for distribution of funds to claimants as soon as possible.

Q: Where did funds for the settlement come from?

A: Insurance coverage, sale of diocesan property, other assets of the diocese, and contributions from all parishes within the geographic area the diocese serves, including those that don’t have clergy sexual abuse claims made against them.

  • $26 million comes from insurance coverage.
  • $7 million comes from cash contributions from the diocese. This includes cash from a $2 million mortgage on the Pastoral Center.
  • $1 million is the combined contribution from all parishes in the diocese. Of the $1 million contributed by all the parishes combined, two parishes that were sued for clergy sexual abuse agreed to contribute approximately $210,000 toward the settlement. The remaining 22 parishes that were sued agreed to pay a total of $350,000 toward the settlement, with each parish contributing between $10,000 and $35,000 apiece. The parishes that were not sued each agreed to contribute $10,000 toward the settlement to help survivors on their healing journey.

The confirmed plan of reorganization is posted on the Documents page. This confirmed plan of reorganization contains additional settlement funding source information.

Q: What are the child protection protocols agreed to under the confirmed plan?

A: The diocese has committed to 17 child protection protocols, designed to help protect children and young people from abuse and prevent sexual misconduct in ministry. The Diocese of New Ulm has already enacted many of these protocols, and diocesan and parish leaders continue to be committed to fulfilling each of them now and into the future. See the Protocols page for the full listing of protocols.

Q: What were the deadlines leading up to the confirmed plan?

A: Claimants were mailed balloting information in late Dec. 2019 and had until Feb. 19, 2020 to vote on the plan. The deadline to object to the plan was also Feb. 19, 2020. The confirmation hearing for the plan was held on March 10, 2020 at 11 a.m. at the Brown County Courthouse in New Ulm.

Deadlines were communicated in regional, state and national newspapers, as well as on the diocesan website and in parish communications.

Q: What is in the plan of reorganization that claimants voted unanimously to approve?

A: The plan of reorganization provides the means for settling and paying all claims related to sexual abuse and misconduct through the formation of a trust that will be funded by contributions from the diocese, parishes, and settling insurers. A disclosure statement that summarized the plan and provided further background regarding the diocese and the diocese’s bankruptcy case was also provided to claimants to assist them in making an informed decision regarding their decision to vote on the plan.

When was the settlement amount determined?

A: On June 26, 2019, the Diocese of New Ulm, parishes and 93 survivors of clergy sexual abuse reached a $34 million settlement in our bankruptcy case.

Q: Why did the diocese file for reorganization?

A: On March 3, 2017, the Diocese of New Ulm filed for protection under Chapter 11 of the U.S. Bankruptcy Code in United States Bankruptcy Court for the District of Minnesota. The diocese filed in order to reorganize its finances and establish a plan to pay its creditors, who are survivors of sexual abuse as minors by clergy, while continuing its operations.

Reorganization provided the diocese and parishes with a neutral process to resolve fairly and permanently past claims by survivors while continuing to carry out the mission of the Church. The Diocese of New Ulm filed for reorganization following the enactment of the Minnesota Child Victims Act, which temporarily lifted the civil statute of limitations on historical childhood sexual abuse claims for a three-year period which ended on May 25, 2016.

After the bankruptcy court’s approval of the plan, all claims against the diocese based on events that occurred before March 10, 2020 are either channeled to the settlement trust, paid pursuant to the plan or are discharged. No claims based on events that occurred before March 10, 2020 may be brought against the diocese after the plan is confirmed by the court.

Q: What does this mean for survivors of sexual abuse as minors by clergy in the Diocese of New Ulm?

A: This final approval clears the way for 93 survivors of sexual abuse to begin to receive compensation under the settlement. A trustee and claims reviewer, working independently from the diocese, will determine the amount of compensation each survivor will receive and plan for distribution of funds to claimants as soon as possible.

Survivors also advocated for non-financial elements of the settlement that are aimed at protecting children and young people from abuse. On March 10, 2020, Bishop LeVoir shared his gratitude with survivors, saying, “The Church is a safer place for children and young people today thanks to the courage of abuse survivors who advocated strongly for changes to protect the vulnerable and hold abusers and Church leaders accountable. I am grateful to them for their bravery and perseverance.”

 

Q: What does this mean for my parish or Catholic school?

A: The court approval settles all pending claims against parishes. All parishes within the geographic area the diocese serves, including parishes with no claims against them, contributed to the settlement fund to increase the amount available to survivors of sexual abuse by clergy. Bishop LeVoir and local pastors agree that these contributions are the right thing to do to provide for a fair settlement for those harmed and help survivors in their healing.

Q: Did my donations to the Diocesan Ministries Appeal (DMA) go to settle claims?

A: Donations to the DMA are restricted gifts to be used in support of the specifically designated ministries only. No donations to the DMA were used toward the settlement fund.

Q: Now that the settlement is approved, how will it affect ministry in the Diocese of New Ulm?

A: We do not expect that the settlement of our bankruptcy case will affect core diocesan ministry. Over the past several years, the diocese has implemented multiple cost-saving measures, including very difficult staff layoffs and hour and benefit reductions, a more limited publication schedule for The Prairie Catholic newspaper and restrictions on staff travel, in order to provide for fair compensation for survivors while providing for ongoing essential ministry.

Q: If someone was sexually abused as a minor and has not yet come forward, what should he or she do?
A: If someone was sexually abused as a minor by anyone involved in Church ministry in the Diocese of New Ulm, they should immediately report such abuse to local law enforcement, regardless of when the abuse occurred. See contact information for county law enforcement and social service agencies in the 15 counties the diocese serves.

Survivors of sexual abuse by clergy are also encouraged to contact the diocesan Victim Assistance Coordinator at 1421 6th Street North, New Ulm, MN 56073, or by phone at 507-233-5313, for counseling or other assistance in healing.

Q: Has the diocese issued a public apology to survivors?

A: Yes. On behalf of the Diocese of New Ulm, Bishop John LeVoir has apologized publicly to survivors and continues to do so both publicly and privately.

Bishop LeVoir stated on March 10, 2020, “I apologize for the harm they endured, knowing that today’s settlement cannot make amends for all that was taken from them. For this, I am and always will be truly very sorry.”

Q: What if I have additional questions?
A: Please call the diocesan Office of Communications at (507) 233-5332.