Copyright © 2022 Albuquerque Journal
The 3-year-old bankruptcy reorganization of the Archdiocese of Santa Fe entered a critical phase on Monday, with insurance companies and clergy sex abuse claimants meeting in a confidential mediation with attorneys for the church.
At issue is how to resolve the impasse in reaching a universal settlement in the case, particularly how much the archdiocese’s insurance companies will contribute to a payout for nearly 400 people who have filed claims alleging they were sexually abused as children by priests and other clergy in the archdiocese.
The mediation includes for the first time a nationally recognized mediator who was brought in during the recently settled Chapter 11 bankruptcy reorganization filed by USA Gymnastics. The organization agreed last year to pay $380 million in the wake of revelations about former team doctor Larry Nassar, who was convicted in 2018 of sexually assaulting hundreds of girls and women.
U.S. Bankruptcy Judge David T. Thuma appointed Austin-based mediator Paul Van Osselaer at the request of the Archdiocese of Santa Fe. Van Osselaer’s specialty is mediation and arbitration of insurance coverage issues, according to his website.
The archdiocese and the nearly 400 sexual abuse survivors who filed claims last year tentatively agreed on a payout figure representing the archdiocese’s portion of any settlement, but that amount is confidential. Meanwhile, the archdiocese has been selling off what is considered “non-mission essential” property and other assets in Albuquerque, Santa Fe, and around northern New Mexico for months. Local parishes also have been asked to contribute up to $100,000 each.
Underscoring the lack of progress: Vicar General Glenn Jones of the archdiocese hasn’t updated his regular online bankruptcy update in months.
“We’re collecting the funds for the archdiocesan portion of the settlement, which right now is fixed (but under court required confidentiality, so I can’t tell you the total),” he wrote at the end of September. “Right now we’re negotiating with the insurance companies that covered the archdiocese during those years named in the (many) claims; unfortunately, that may take a while, but there’s no way to speed it up. Sigh.”
The archdiocese website states that the last known incident of abuse involving a member of its clergy was 15 years ago, but claims of clergy sexual abuse date back decades involving various insurance companies.
The court public docket for the case shows all the documents relating to insurance companies’ historical coverage have been sealed, including a motion to compel arbitration filed by the archdiocese last summer.
The docket states, however, that insurers that included St. Paul Fire & Marine Insurance, Great American Insurance Co. and Arrowood Indemnity Co. have opposed the archdiocese’s arbitration motion.
Thuma in November granted part of that request for arbitration, denying another part, the docket sheet shows. But his written ruling is also sealed and a month later the archdiocese filed the motion for mediation.
Arbitration is considered a binding process that permits a third party to make a ruling. Mediation gives the disputing parties the control over the final outcome.
With 29 Catholic religious orders, dioceses or archdioceses filing for bankruptcy protection in the face of mounting lawsuits from clergy sex abuse survivors, insurance proceeds have been vital in reaching settlements. For instance, in Portland, Oregon, the archdiocese received $52 million from insurance proceeds to help pay a total $75 million to clergy sex abuse survivors in 2007. That same year, in Davenport, Iowa, insurance companies paid a reported $19.5 million, with that city’s archdiocese paying another $17.5 million to survivors.
Nearly 40 individual clergy abuse lawsuits were pending in state court at the time the Archdiocese of Santa Fe church officials filed for bankruptcy reorganization in December 2018. Those cases are on hold pending the outcome of the bankruptcy case.
The Archdiocese of Santa Fe has brought in mediator Paul Van Osselaer to assist with its bankruptcy.