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The Roman Catholic Diocese of Duluth, Minn., which filed for bankruptcy last month following an $8.17 million clergy sexual-abuse verdict, has asked a judge to give victims until May to come forward with abuse allegations, the Wall Street Journal reported today. In bankruptcy court papers, the diocese asked Judge Robert Kressel to impose a May 25 deadline by which victims must file specially written — and highly detailed — claim forms in order to seek compensation. A hearing on the proposed claims deadline, also known as the bar date, is scheduled for Thursday. The requested deadline would give victims the full benefit of the Minnesota Child Victims Act, which expires May 25. The act, passed by the Minnesota legislature in 2013, lifted the statute of limitations for sexual-abuse cases in the state for three years, leading to the waves of abuse-related lawsuits.

An attorney for alleged victims of sexual abuse by priests has declined to sign a letter listing financial terms of a settlement in the Diocese of Gallup, N.M., bankruptcy case because the agreement is “nonbinding,” according to an attorney in the case, and could allow insurers to walk away from the deal, the Albuquerque Journal reported on Thursday. “We want to know that the letter means something,” and that insurers and others are required to provide the amounts indicated in the letter, said James Stang, who represents 57 alleged victims of clerical abuse who have filed claims in the case. Bankruptcy Judge David T. Thuma said that he was not surprised that attorneys are having difficulty finalizing a settlement in the 2-year-old bankruptcy case and asked them to continue working toward resolution. He set a hearing for Jan. 6 to review any progress toward a deal.

Trustees of the Lac-Megantic settlement have fully funded the accounts to the over $330-million level as directed in the agreement, WCSH6.com reported yesterday. Robert J. Keach of Bernstein Shur, the chapter 11 trustee for Montreal Maine & Atlantic Railway, Ltd., and Richter Advisory Group, Inc., the monitor in the CCAA case for Montreal Maine & Atlantic Canada, announced yesterday that the settlement fund has been fully funded. A press release said the trustee will transfer approximately $82-million to the trust for the benefit of the holders of wrongful death claims starting this week. $228-million will be distributed to the holders of personal injury, moral damage, and economic and property claims, as well as to the federal, provincial and local government claims, will be handled by the monitor and will also proceed in the New Year.

A little more than a year after the Archdiocese of St. Paul and Minneapolis announced a new child-protection plan, developed as part of a settlement in a clergy sex abuse lawsuit, the archdiocese has unveiled another landmark plan, the St. Paul (Minnesota) Pioneer Press reported on Saturday. The plan is the result of a settlement agreement between the archdiocese and the county attorney's office, which filed civil charges last year in conjunction with criminal charges against the archdiocese. Some elements of the plan include:

- Broader background checks for clergy and church volunteers.

- Mandatory and ongoing child-protection training.

- Mandatory reporting of suspected child abuse to law enforcement.

- Creation of a fund for victim counseling.

As part of the agreement, the civil case will be put on hold for three years as the archdiocese implements its plan, returning to court with progress reports every six months. At the end of the three-year period, if the archdiocese has held up its end of the deal, the county attorney's office would dismiss its case.

The Diocese of Duluth, Minn., is expected to enter mediation with clergy sexual abuse victims, following in the footsteps of other bankrupt dioceses that have sought to resolve growing legal and financial turmoil tied to the abuse crisis, the Wall Street Journal reported on Saturday. Ford Elsaesser, a lawyer for the diocese, said on Friday that the diocese will “very likely” seek the appointment of a mediator. Mediation is likely the best opportunity to resolve the diocese’s bankruptcy case, which was filed Monday, through a settlement that compensates victims and also protects the church from future litigation. The Diocese of Helena, Mont., which filed for bankruptcy in January 2014, spent less than five hours in court, resolving much of its case in mediation. Other diocesan bankruptcies have stretched out over years, racking up huge legal bills. Judge Robert Kressel, who is also overseeing the Archdiocese of St. Paul and Minneapolis’s bankruptcy, said he had already begun to consider who might serve as a mediator for the Duluth diocese, likely another bankruptcy judge.

General Motors Co. paid less than $600 million to settle claims by victims of its flawed ignition switches, a slightly smaller sum than what the automaker told investors it expected to pay, after a 20-month-long compensation process led by Kenneth Feinberg, Bloomberg News reported today. A final report released by Feinberg today concluded 124 people died in relation to ignition switches in GM compact cars, and another 275 suffered injuries warranting compensation. The Feinberg-led firm said that GM paid out on less than 10 percent of 4,343 claims submitted, for a total of $594 million in settlements. Chief Executive Officer Mary Barra set up the compensation fund to deal with litigation from the company’s customers, many of whom bought Chevrolet Cobalts and other compact cars before the automaker’s 2009 bankruptcy. Since GM shed product liabilities through its reorganization, the company was shielded from such claims and may not have had to pay victims. Read more. 

Looking for a resource on liquidation or litigation trusts? Be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts today! 

The Roman Catholic Diocese of Duluth, Minn., filed for bankruptcy Monday after being hit with an $8.4 million verdict in a clergy sex abuse case, the Wall Street Journal reported today. The diocese, which spans 10 counties in northeastern Minnesota, filed for chapter 11 protection in U.S. Bankruptcy Court in Duluth, court papers show. Last month, a jury awarded $8.4 million to a man who says he was sexually abused in the late 1970s by a priest serving in the Diocese of Duluth. The diocese, which has said that it is considering an appeal, says that it knew nothing about the abuse and couldn't have prevented it. The Diocese of Duluth is being held responsible for $4.8 million of the $8.4 million judgment, Susan Gaertner, a lawyer for the diocese. Read more. (Subscription required.) 

Diocesan and religious order bankruptcies were the topic of discussion at a session at last week’s Winter Leadership Conference. Click here to access the meeting materials from that session. 

Attorneys for a New Mexico diocese and its insurance companies say they are optimistic they will soon reach a resolution during mediation talks in their bankruptcy proceedings, the Associated Press reported on Friday. At a status conference last Tuesday, attorneys said that they believe a successful resolution might be obtained during mediation talks scheduled to take place in Phoenix Dec. 3-4. At the conference, attorneys for the Diocese asked Bankruptcy Judge David T. Thuma to postpone any court decisions until after the mediation, and Judge Thuma agreed. Read more. 

For the latest developments on diocesan bankruptcies, be sure to attend the session at this year’s ABI Winter Leadership Conference. Click here to register. 

Bankruptcy Judge Robert Kressel yesterday granted the Archdiocese of Minneapolis and St. Paul the extra six months it wanted on exclusive rights to file its reorganization plan, but he rejected a request to hire more consultants — even at the discounted rate of $595 per hour, the Minneapolis Star Tribune reported today. The Archdiocese wanted to hire BRG Capstone to handle any possible future clergy sex abuse or other claims that people could file against it, even though the deadline for filing those has passed. Judge Kressel declared the possibility of future claims “remote.” If people do come forward, they wouldn’t require special representation because they are already represented by the unsecured creditors’ committee, he said. Read more.

For more on diocesan bankruptcies, be sure to attend the panel session at ABI’s Winter Leadership Conference!