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Abuse victims will vote on settlement

ALBUQUERQUE, N.M. — Victims of sexual abuse by clergy in the Diocese of Gallup soon will receive ballots that will allow them to approve or reject a proposed $24 million reorganization plan in a 30-month-old Chapter 11 bankruptcy case.

U.S. Bankruptcy Judge David T. Thuma on Tuesday approved a 68-page “disclosure statement” that sets out terms of the proposed reorganization plan, clearing the way for claimants to vote on the plan.

In that statement, the Diocese of Gallup acknowledged that children were sexually abused by “priests or others purporting to do the missionary work” of the church, resulting in “harm and suffering on the children and teenagers of the Diocese.”

Thuma will consider whether to approve or reject the reorganization plan at a hearing scheduled June 21.

James Stang, a Los Angeles attorney who represents 57 claimants in the case, said he anticipates his clients will approve the proposed settlement.

If Thuma approves the plan in June, Stang said, “hopefully we will be able to get the money out to survivors very promptly.”

Stang has estimated that payments would average about $350,000 per claimant, though amounts likely would vary depending on circumstances.

Under the plan, insurers will provide cash payments of at least $13.4 million.

The largest share – $11.55 million – would be provided by the Catholic Mutual Relief Society of America, a nonprofit that insures many Roman Catholic dioceses. Catholic Mutual insured the diocese from 1977 to 1990, when some of the abuses occurred.

The Diocese of Gallup would contribute $3 million and may have to sell its chancery offices in Gallup, subject to the terms of a loan agreement with a bank.

In addition to abuse claims, the settlement also would pay for legal and professional costs that totaled more than $3.5 million through Dec. 30.

The two primary law firms have agreed to a $416,000 reduction in fees, according to the disclosure statement.