The Official Committee of Creditors, which is comprised of seven abuse survivors and advocates on behalf of all Survivors with claims in the Archdiocese of Baltimore bankruptcy, is pleased to report that Judge Harner issued several significant rulings on August 5 that the Committee believes create the strongest opportunity to date for meaningful progress toward a fair resolution.
Although these rulings do not resolve the bankruptcy, they require the Archdiocese to provide greater transparency and improve its proposed bankruptcy plan before it can be presented to creditors for a vote.
Judge Harner’s Rulings
The Court denied the Archdiocese’s request to send its proposed bankruptcy plan to creditors for a vote. This is an important development because the Committee has consistently maintained that the Archdiocese’s proposed plan would have allowed it to shield assets that should instead be available to compensate Survivors.
The Court also ruled that the Archdiocese cannot exclude approximately $74 million in insurance trust funds from the bankruptcy estate. Judge Harner determined that these funds are property of the Archdiocese and must be treated that way in its bankruptcy.
The Court rejected the Archdiocese’s proposal to create an additional class of creditors whose votes could have diluted the significance of Survivors’ votes on any proposed bankruptcy plan.
Finally, Judge Harner concluded that the Archdiocese’s disclosure materials were insufficient. Among other things, the Court found that the Archdiocese failed to adequately explain the nature and value of its assets, the effect of its insurance settlements, and its position regarding critically important youth protection measures intended to safeguard children in the future.
Taken together, these rulings are consistent with many of the positions advanced by the Committee. They also reinforce the protections that the Bankruptcy Code provides to creditors—including Survivors—before they are asked to vote on a plan of reorganization.
Survivors should also know that Judge Harner ruled that the Committee’s proposed plan likewise could not be sent to creditors for a vote. Although the Committee believed its plan was ready to proceed, the Court’s rulings require the Archdiocese to address significant deficiencies in its own proposal. The Committee believes those rulings increase the pressure on the Archdiocese to negotiate a fair resolution and create the best opportunity so far to reach an acceptable plan for Survivors.
What Happens Next?
The Archdiocese must now focus more than ever on negotiating a fair bankruptcy plan with the Committee. Following Judge Harner’s rulings, it is clear that any agreement must provide fair compensation to Survivors based on the full value of the assets properly available in the bankruptcy estate. If the Archdiocese is willing to do this, the Committee is hopeful that negotiations will lead quickly to a new plan proposal that the Committee can support directly.
In addition, on September 30, the Court is expected to consider whether litigation against the parishes may proceed and whether a limited number of lawsuits against the Archdiocese itself may also move forward. Those proceedings may also give parties another reason to continue negotiating a fair and thorough resolution.
The Committee recognizes that the bankruptcy process has been lengthy and, for many Survivors, emotionally difficult and re-traumatizing. While these recent rulings may look like they could extend the timeline of the case, the Committee is hopeful that they may do just the opposite, because the Court has now made clear that it will require transparency and compliance with the Bankruptcy Code before any plan can move forward. The Committee believes Judge Harner’s rulings significantly improve the prospects for fair compensation and meaningful institutional accountability.
The Committee remains committed to advocating for all Survivors and to working diligently toward a resolution that fairly compensates Survivors, promotes meaningful institutional accountability, and includes measures that help protect children in the future.
If you have general questions about the bankruptcy process or comments for the Official Committee, please email baltimoresurvivorteam@stinson.com. All communications are treated confidentially, and someone will respond.
If you are represented by an attorney, you should direct questions regarding your individual claim to your attorney.
The Committee will continue to update this website as significant developments occur.
