Ban on Catholic school, parish lawsuits remains as attorneys for abuse victims, Baltimore archdiocese continue bankruptcy talks
A court-ordered ban on lawsuits against Baltimore-area Catholic schools and parishes will remain in place indefinitely as attorneys for sexual abuse victims and the Archdiocese of Baltimore continue to work through the early stages of the archdiocese’s bankruptcy.
The extension of the injunction, which has been in place since Oct. 3, came after abuse victims reversed course from their filing last week with the federal bankruptcy court seeking to have the ban lifted.
An attorney for the unsecured creditors’ committee — a group of seven abuse victims who represent all victims who will bring claims against the archdiocese in the bankruptcy process — said in court Monday that the decision to forgo its current challenge to the injunction was a product of good communication and cooperation between the archdiocese’s attorneys and the committee.
“It bodes really well for how the case may proceed, and hopefully for the speed of the case,” attorney Robert Kugler, lead counsel for the survivors committee, said in court.
Four days earlier, Kugler and others authored a scathing response to the archdiocese’s request for a permanent injunction, writing that one would “prevent survivors from seeking acknowledgement and justice against other culpable parties.”
Whenever any entity files for Chapter 11 bankruptcy, it is automatically protected from lawsuits so its assets can be preserved to pay creditors. Sometimes those protections can be extended to third parties, which in this case has largely meant parishes and schools related to the archdiocese. U.S. Bankruptcy Judge Michelle Harner extended the protections to entities covered by archdiocesan insurance policies (known as covered parties) because a lawsuit against one of those entities could draw down on insurance monies in order to pay legal fees and settlements.
Part of the reason for the newfound détente is an increase in the flow of information from the archdiocese to the creditors.
attorney Blake Roth, the church’s lead bankruptcy counsel, said in court the archdiocese has made 5,000 pages of historic insurance coverage information available to the unsecured creditors’ committee and attorneys representing other survivors. Roth said the documents, which are not public, detail insurance policies going back into the early 1960s. His team is also working to get detailed financial information about parishes and schools and what they may be able to contribute.
“We want to make this pie as big as possible,” Roth said in reference to the final settlement for abuse victims.
Although Archbishop William E. Lori has control over them, including whether they can be sold, parishes and schools are not assets of the archdiocese in the traditional sense. For decades, the Archdiocese of Baltimore carefully shuffled its assets into a variety of legal entities to protect them in the event of legal troubles.
attorney Teresa Lancaster, abuse survivor and advocate with SNAP, comment on the first-day motions in the Archdiocese bankruptcy hearing at the Edward A. Garmatz U.S. District Courthouse. ” src=”https://www.baltimoresun.com/resizer/3Zt4soB5oZqyikFBOKDg_mK8qlQ=/1024×0/filters:format(jpg):quality(70)/cloudfront-us-east-1.images.arcpublishing.com/tronc/ZS2TAUQUQVFBFF2COQZYAZ7OWA.jpg” width=”1024″ height=”0″ loading=”lazy”/>
Attorneys for the archdiocese argued in court Oct. 3 that an injunction for parishes and schools would help preserve assets for victims when the time comes to reach a final settlement. It is expected that those same parishes and schools will contribute in some way to whatever final settlement is reached.
The ban also is not fully encompassing. Anyone who wants to sue an affiliate of the archdiocese can provide the names of their intended defendants to its attorneys, who will respond within two business days as to whether those would-be defendants are covered by the archdiocese’s insurance policies.
And while the injunction remains in place for now, the parties are free to challenge it again in the future if their working relationship degrades.
Harner reminded attorneys Monday she could set a future hearing on the “drop of a dime,” although her preference is to have the sides sort out any issues themselves rather than have her get involved.
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“I’m pleased by the progress over the weekend,” Harner said. “There’s a lot of folks, a lot of interest at stake, on both sides.”
It’s possible a conflict could be brewing over the proposed bar date for claims; the archdiocese requested that date be Feb. 24, meaning all survivors hoping to see compensation would have to file their claim before then.
Gordon Novod, an attorney representing a survivor who is not a member of the creditors’ committee, said the proposed deadline is a “short” amount of time for people to come forward.
The Archdiocese of Baltimore filed for bankruptcy on Sept. 30, two days before the Child Victims Act went into effect. The act lifted the statute of limitations on childhood sexual abuse lawsuits and granted people whose claims were blocked previously because too much time had elapsed from when their abuse happened to bring forward their cases indefinitely.
David Lorenz, Maryland director of the Survivors Network of Those Abused by Priests, said when his organization was lobbying state legislators on the act, they sought a bar date of two years after its passage but lawmakers insisted on setting no deadline at all.
“The archdiocese has effectively tried to close it at five months from the effective date, and that’s obviously ridiculous,” Lorenz said. “It won’t stand.”
The unsecured creditors’ committee has not offered a counter date.
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