After years of litigation over insurance coverage, the Diocese of Duluth finally reached a settlement with 125 sexual abuse victims. A committee of sex abuse survivors reached the settlement with the diocese Wednesday May 1, ending a battle that started in 2015. This settlement provides around $40 million to the survivors and allows the diocese to compensate the victims and come out of Chapter 11 bankruptcy.
Bankruptcy protection sheltered the Duluth Diocese since December 2015 when the diocese filed a voluntary petition. This decision quickly followed the $4.9 million jury verdict that resulted from the Minnesota Child Victims Act look back window. The insurance lawsuit that followed six months later slowed the bankruptcy proceedings. In the wake of the May 1 settlement, the Diocese stated in a news release that they plan on filing a disclosure statement and joint reorganization plan in the near future.
What Happens Next?
If the bankruptcy judge approves the plan, the committee will send ballots to the settlement’s 125 survivors. The survivors will vote on whether or not they accept the reorganization proposal. The diocese plans on contributing more than $10 million of the $40 million settlement. The diocese expects contributions from many of its 75 Catholic parishes and additional Cathiolic establishments. The remaining sum of the settlement will come from insurers.
$39 million of that settlement will go into a distribution trust for the victims following the conclusion of court proceedings. A law firm associated with this case anticipate a process timeline of three to four months for this stage of the settlement.