Diocese in Alaska agrees to $10M abuse settlement

The Catholic Diocese of Fairbanks and representatives of almost 300 alleged victims of clergy abuse have agreed on a settlement of almost $10 million.

The agreement was discussed Tuesday at a status hearing in federal bankruptcy court and will need to be finalized. The deal could be completed by mid-January.

Plaintiffs' attorney Ken Roosa said some of the payoff would be put aside to pursue as much as another $100 million from two of four insurance companies for the diocese that have balked in court at paying on behalf of the church. The rest would be divided among alleged victims, depending on the severity of abuse.

"It's a long time coming. It's a big step in the right direction," said victims' advocate, Elsie Boudreau, who received $1 million from the diocese to settle her sexual abuse claims against a priest four years ago.

Roosa said the diocese would accept liability for "many, many" millions of dollars. In return, a committee representing claimants would agree that it can't collect that money from the diocese, but instead would go after the insurance companies.

"It's a pretty big drop in a huge bucket," Roosa said of the smaller settlement with the diocese. "This is not the entire amount."

Complaints of sexual abuse of a minor have been filed in recent years against the diocese, with some allegations dating back 50 years.

The diocese filed for bankruptcy protection last year and all proceedings are overseen in bankruptcy court in Anchorage.

The diocese was "extraordinarily pleased" with the agreement, according to a spokesman, who called it an important milestone in its reorganization effort.

"We look forward to working with the claimants so that the insurance companies fulfill their obligations," Chancellor Robert Hannon said. "This is all about finding a just way to compensate those who were harmed and we'll have much work to do to restore their trust."

Roosa said the agreement with the diocese is an improvement over an offer last month that would have guaranteed each alleged victim $5,500 apiece in a reorganization plan that would provide $11 million to victims and creditors.

Diocese attorneys had said the secured pay would have been a minimum to settle the claims and that there would be roughly $7.5 million more later for plaintiffs.

Roosa said the amount was not hard money, but based on property sales minus paying off debts including legal fees, and that victims would have received just a fraction of the money.

"We said 'no,'" he said. "We want money set out - hard cash directly going to the victims, to the survivors."

Another hearing is scheduled for Dec. 4 before U.S. Bankruptcy Court Judge Donald MacDonald to hear unresolved insurance issues pertaining to the diocese's revised reorganization plan.