Q: What are upcoming dates in the reorganization process?
A: Claimants have until Feb. 19, 2020 to vote on the plan. The deadline to object to the plan is also Feb. 19, 2020. The confirmation hearing for the plan is scheduled for March 10, 2020 at 11 a.m. at the Brown County Courthouse in New Ulm.
Q: What is happening with the reorganization process?
A: On Dec. 20, 2019, the U.S. bankruptcy court approved the amended disclosure statement and amended joint chapter 11 plan of reorganization filed by the Diocese of New and the Committee of Creditors.
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. The disclosure statement summarizes the plan and provides further background regarding the diocese and the diocese’s bankruptcy case. The disclosure statement is intended to assist claimants in making an informed decision regarding their decision to vote on the plan.
Those who have sexual abuse claims against the Diocese of New Ulm or parishes within it will receive the disclosure statement, plan of reorganization, and other materials they need to vote on whether they approve the plan. The deadline to return ballots is February 19, 2020. At least two-thirds of voting claimants in each class must approve the plan.
On June 26, 2019, the Diocese of New Ulm, parishes and 93 victims and survivors of clergy sexual abuse reached a $34,000,000 settlement in our bankruptcy case. The settlement represents our commitment to finding a fair resolution for victims and survivors of sexual abuse while continuing our ministry for those we serve throughout south and west-central Minnesota. The settlement funds are made up of insurance coverage settlements and cash contributions from the diocese and parishes, including parishes that do not have claims against them.
The Diocese of New Ulm filed for financial reorganization under Chapter 11 in March 2017. Since then, under the supervision of the Federal Bankruptcy Court, we have worked with representatives of victims and survivors of clergy sexual abuse to resolve fairly claims made against the Diocese of New Ulm and parishes within the geographic area the diocese serves. These claims were filed under the Minnesota Child Victims Act, which temporarily lifted the civil statute of limitations on historical childhood sexual abuse claims for a three-year period ending in May 2016.
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 victims and survivors of sexual abuse as minors by clergy, while continuing its operations.
Reorganization provides the diocese with a neutral process to resolve fairly and permanently past claims by victims and survivors while continuing to carry out the mission of the Church. After prayerful and careful review, the diocese determined that filing for reorganization was the best way to resolve claims fairly. The Diocese of New Ulm is among the four dioceses in Minnesota that have 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. When claimants approve the settlement plan, it will result in a “channeling injunction,” which will prevent claims against the diocese and parishes based on events that occurred before confirmation of the plan of reorganization.
Q: What does this mean for victims and survivors of sexual abuse as minors by clergy in the Diocese of New Ulm?
A: Reorganization under Chapter 11 means the court supervises a process to resolve fairly claims with victims and survivors and provide equitable compensation. Claimants will vote on the settlement agreement. If claimants approve the plan and the judge confirms it, a plan trustee approved by the court will make payments to the claimants.
Q: What does this mean for my parish or Catholic school?
A: Parishes, Catholic schools, and other Catholic organizations located in the geographic area the diocese serves are separately incorporated under Minnesota law. All parishes within the geographic area the diocese serves, including parishes with no claims against them, have contributed to the settlement fund to increase the amount available to victims and survivors of sexual abuse by clergy. When claimants approve the settlement plan, it will result in a “channeling injunction,” which will prevent claims against the diocese, parishes, and Catholic schools based on events that occurred before confirmation of the plan.
Q: What are the sources of money going to the settlement fund?
A: Insurance coverage, sale of diocesan property, 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 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 victims and survivors on their healing journey.
We have posted the plan of reorganization and disclosure statement filed with the court. These documents contain additional settlement funding source information. See these documents and others related to the reorganization process posted on the documents page.
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: If 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 victims and 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.
Victims and 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 victims and survivors?
A: Yes. On behalf of the Diocese of New Ulm, Bishop John LeVoir has apologized publicly to victims and survivors and continues to do so both publicly and privately. Please see Bishop LeVoir’s video message.
Q: What if I have additional questions?
A: Please call the diocesan Office of Communications at (507) 233-5332.