Judge encourages parties to mediate in bankruptcy

Published 10:23 am Monday, December 14, 2015

MINNEAPOLIS — A judge is encouraging mediation to resolve the Diocese of Duluth’s recent filing for bankruptcy protection.

Bankruptcy Judge Robert Kressel encouraged the diocese and all parties involved — including attorneys for sex abuse victims and insurers — to work with a mediator. Kressel did not officially order mediation.

The diocese filed for Chapter 11 reorganization last Monday. The move comes a month after a Ramsey County jury awarded $8.1 million to a man who said he was molested by a priest in northern Minnesota in 1978 when he was a boy.

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The diocese said it can’t afford its nearly $5 million share of the verdict and filed for bankruptcy.

Mike Finnegan, a St. Paul attorney for the man who won the $8.1 million jury award and other abuse victims who’ve filed lawsuits against the diocese, said that mediation is a less costly way to work through litigation when numerous parties are involved. He did not argue against using a mediator.

“Sometimes there are things in mediation that you can do to resolve a case that you can’t do necessarily through the court,” Finnegan said Friday. “In a lot of the cases like this, it’s something that’s beneficial for all the parties involved to go into mediation.”

Finnegan said mediation sessions have not been scheduled.

Finnegan’s St. Paul firm, Jeff Anderson & Associates, has filed around 30 claims against the Diocese of Duluth. Abuse survivors are suing the church under Minnesota’s Child Victims Act, a law that opened a three-year window to file claims that otherwise would have been barred under the statute of limitations.

The Duluth diocese’s filing is the 13th Roman Catholic diocesan bankruptcy in the U.S, according to BishopAccountability.org. Each one typically takes one to two years before it’s resolved.