Seeking more time to work with insurers, Archdiocese requests extension for filing Reorganization plan

| March 27, 2015 | 0 Comments

The Archdiocese of St. Paul and Minneapolis requested March 26 to extend the deadline from May 16 to Nov. 30 to file a plan for Reorganization.

Under the U.S. bankruptcy code, the archdiocese had 120 days after petitioning Jan. 16 for Chapter 11 Reorganization in which to file a Reorganization plan, and an additional 60 days where it alone could solicit acceptance of a filed plan. After that window of time, other parties, including creditors, would also be able to file plans.

Under the archdiocese’s request, the 60-day window in which it alone could solicit its plan’s acceptance would be extended to Jan. 29, 2016.

The archdiocese entered into mediation with its creditors shortly after its first-day filings and has met with them 15 times, according to the notice. Creditors include victims/survivors of clergy sexual abuse with claims against priests of the archdiocese, some parishes and more than 15 liability insurance carriers.

“There are a number of difficult issues to be resolved prior to completion of the mediation process,” the notice stated. “In particular, it is imperative that the Archdiocese and the Committee have sufficient time to negotiate with the liability insurance carriers for contribution toward a comprehensive and global settlement and consensual plan of reorganization. It is highly unlikely that the negotiation of these issues will be completed in time for the Archdiocese to file its plan within 120 days of the Petition Date.”

The notice listed several steps the archdiocese’s counsel deems necessary for completion of a finalized settlement: the establishment of a bar date, or a date by which all creditors wishing to be part of the settlement must come forward; time for collection of “sufficient information to evaluate the claims” of the creditors; and time for claim evaluation and settlement negotiation.

According to the notice, the archdiocese plans to file a bar date prior to an April 9 court hearing.

The notice indicated that the mediation process is going well.

“The Archdiocese and the Committee [of creditors] believe that discussions to date have been fruitful and that the mediation process may provide the best hope for a prompt successful reorganization,” the notice stated.

The archdiocese also filed a Reorganization status report March 26 that indicated it has disclosed all assets in its possession and participated in the analysis of the assets.

According to the report, the archdiocese has encouraged all 187 parishes in the archdiocese to retain common bankruptcy counsel and is working with a lawyer representing a parish group. It said it is also working with insurance carriers to evaluate what each carrier should pay in a mediated settlement based on pending and possible claims.

The archdiocese also filed requests to pay its legal counsel more frequently, and to renew its lease agreement with the St. Paul Seminary for the Byrne Residence, a home for retired priests behind the seminary along Mississippi Boulevard.


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