Archdiocesan bankruptcy case moves one more step forward

The Milwaukee Journal Sentinel provides more detail on yesterday's Bankruptcy Court hearing on our Archdiocese's disclosure statement for its plan of reorganization.

The creditors committee objected to including settlement of the pending litigation over whether the cemetery perpetual care funds should be considered an Archdiocesan asset subject to claims of creditors.

"[U.S. Bankruptcy Judge Susan V.] Kelley denied those requests, saying she was determined to move the case forward.

"'I am very sensitive to finishing this case,' the judge told a packed courtroom and more than 15 attorneys.

"'If the plan can't be confirmed, it should be dismissed,' said Kelley."

Dismissal would mean the time and money spent on the bankruptcy was for nothing, so it's hard to understand our Archdiocese's strategy if after three years and well over $10 million in litigation expense dismissal is still even being mentioned as a possibility.

"On Thursday, Kelley walked the attorneys — including those for the archdiocese's insurance companies — through a highly technical edit of the disclosure statement, striking phrases she considered inflammatory or misleading, and calling for more detail in some areas. She struck, for example, references by the creditors committee that the plan was 'morally repugnant,' and the archdiocese's assertion that the creditors committee caused it to incur millions in legal fees."

Which raises the question why such things are in the filings in the first place. The goal, after all, is not to say things so one's partisans can cheer, rather it's to persuade the court.

"She asked the archdiocese to elaborate on why Listecki invited victims to file claims, vowing to treat them fairly, then tried to get those claims thrown out."

If there's ever call to formulate The Five Litigious Mysteries, I'd consider nominating that question.

"And she asked it to explain why it is singling out one group of survivors — the 128 — for compensation."

Since if there is not enough money to go around, why not let the creditors fight it out or work it out among themselves.

"There is little common ground between the lawyers for the archdiocese and the creditors committee, who disagree on many of the facts surrounding the bankruptcy and the way each has articulated them in the statement.

"Tempers flared at one point, and Kelley cut them off, saying, 'This case is hard enough without the mudslinging by the lawyers.'"

One might wonder if this kind of acrimony doesn't involve a risk of the unintended consequence of running up billable hours of the lawyers involved. Which points up another mystery: who, if anyone, manages this litigation for our Archdiocese?

"Kelley attempted Thursday to set a hearing schedule for the reorganization plan but postponed that until Tuesday when lawyers could not come to an agreement on how to move forward."

If there are 15 lawyers at that next hearing to discuss a hearing schedule, I'll guesstimate total fees along the lines of the price of a new car.