FAIRBANKS, Alaska – A judge has approved the final details of a bankruptcy plan revision for the Fairbanks Catholic Diocese that will help compensate sexual abuse victims.
U.S. Bankruptcy Court Judge Donald McDonald approved the reorganization plan at a Monday hearing in Anchorage. It was the third revision negotiated over nearly two years by the diocese and a creditors' committee representing nearly 300 abuse victims.
The plan, expected to be signed by the judge within two weeks, provides $9.8 million in compensation to be divided among victims.
Anchorage attorney Ken Roosa, who has represented most of the victims for the past seven years, said he still expects lengthy court action with two insurance companies — Catholic Mutual Relief Society of America and Travelers Casualty and Surety Co.
"This is no huge milestone — just another step along the path," Roosa said.
The diocese raised the money primarily by selling its properties to its own endowment fund. Its 46 parishes contributed $650,000, and Alaska National Insurance Co. added $1.4 million.
The money will be distributed by a court-appointed settlement trustee on a case-by-case basis, said James Stang, attorney for the creditors committee.
The settlement also requires Bishop Donald Kettler to travel for the next 18 months to small communities throughout the diocese to apologize to surviving victims and conduct healing ceremonies.
The diocese also must issue a general letter of apology and post names of accused abusers on its Web site. That list will include the names of priests, deacons, nuns, brothers and church volunteers, both living and dead.
"With this ruling we can now begin the process of restoring trust and healing," Kettler said in a statement.
The northern Alaska diocese sought Chapter 11 bankruptcy protection in March 2008 after multiple sexual abuse claims dating back to the 1960s were lodged against Catholic clergy and volunteers.
Stang said the creditors committee also was pleased with the plan, "but there is still a lot of work to be done."
The settlement designates $2.5 million for fees to be paid to attorneys, accountants and other professionals. It also includes a provision for a future claims fund.