Creditors to question archdiocese

Creditors, including victims of clergy sex abuse, will have their first chance to question the Archdiocese of Milwaukee about its financials at a meeting Feb. 11 at the federal courthouse.
The first meeting of creditors - called a 341 meeting for the section of the bankruptcy code that requires it - will be 11:30 a.m. in the offices of Assistant U.S. Trustee David Asbach, according to electronic court records.
Often uneventful, the procedural meetings can become a forum for creditors to raise concerns about the debtor, and the meeting may shed light on some of the issues that are likely to be raised in the bankruptcy proceedings, legal experts said.
"It can be a chance for plaintiffs to come and vent, but whether they'll be shut down, I don't know," said Jonathan Lipson, a University of Wisconsin-Madison law professor who has written on the clergy sex abuse bankruptcies.
"It's a formality," he said, "but an important one: You do need some part in the procedure where creditors can look the representative in the eye and say, 'This is what you told us your assets are. Is it true?' "
In other matters related to the bankruptcy:
• The archdiocese has appealed a decision absolving its insurers of liability in pending clergy sex abuse cases to the Wisconsin Supreme Court. But the appeal was put on hold this week because of its Chapter 11 bankruptcy proceedings.
The bankruptcy, filed last week, essentially stays all related civil actions, including the fraud cases now pending in Milwaukee County Circuit Court and the Dec. 23 appeal by the archdiocese on the insurance issue.
In that filing, the church asked the high court to review a November Court of Appeals decision, which absolved its insurer of liability because the acts alleged in the fraud lawsuits were intentional rather than accidental.
But attorneys for the insurer wrote a letter to the Supreme Court this week, saying it would not file its response without approval of the bankruptcy judge, out of concern that it may violate the stay order.
David Muth, one of the archdiocese's attorneys, declined to say whether they would ask the bankruptcy court to lift the stay so the Supreme Court could respond to the appeal. The attorney for the insurer did not immediately return a telephone call seeking comment.
• Before it's over, the bankruptcy is likely to produce thousands of pages of legal documents. Now, anyone ravenous enough to read them all can access them for free without setting foot in the federal courthouse.
The records are being made available online by Kurtzman Carson Consultants, a Los Angeles firm hired by the archdiocese with the court's approval to serve notices of every official development in the case on the 2,700 potential creditors or parties of interest.
The official record is on file at the Clerk of the Bankruptcy Court and available online at the Public Access to Court Electronic Records database maintained by the federal court system, though PACER charges by usage.
The Kurtzman Carson Consultants site is free at www.kccllc.net/archmil.