Progress toward mediation in archdiocesan bankruptcy case

A third mediator will be added to the panel working to come up with a settlement in the Archdiocese of Baltimore’s Chapter 11 bankruptcy case.

In May, the archdiocese and the Official Committee of Unsecured Creditors filed a Joint Request for Mediation with Judge Michele M. Harner to appoint Robert J. Faris and Brian J. Nash as co-mediators. Faris is a sitting bankruptcy judge in the District of Hawaii and recently served as mediator in the successful resolution of the Archbishop of Agaña’s (Guam) Chapter 11 bankruptcy case. Nash has been a practicing attorney since 1975 and been involved in mediating more than 2,000 cases involving claims of medical negligence and sexual abuse.

In a court hearing July 22, Harner agreed to the framework of a revision of the request that would allow a mediator selected by attorneys representing insurance carriers that would likely be a part of any settlement negotiations.

In preparation for the hearing, which was held in the courtroom at the federal courthouse in Baltimore and via Zoom, lawyers for the creditors’ committee, the archdiocese and some of the insurance companies worked on language upon which they could agree before entering the courtroom to formalize the amendments to the motion.

The insurance representatives have until July 29 to present a name to the court, and then the archdiocese and the creditors’ committee could then accept that or argue against it. During that time, the parties will file forms disclosing connections the nominees for mediator may have under Bankruptcy Rule 2014. This requires disclosure of “all of the potential mediator’s connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee,” according to Joseph A. Sisca, U.S. Trustee, in information filed in an unrelated 2019 case.

The parties also agreed to changing certain language from the original motion.

Blake Roth, an attorney from Holland & Knight who represents the Roman Catholic Archbishop of Baltimore as the debtor in the case, told Harner that the parties had agreed she could dismiss the adversary proceeding the archdiocese had filed against the insurance companies that the archdiocese believes are liable for damages because they covered the archdiocese, parishes or schools in the time frame covered by the case. Roth said the dismissal would preserve the archdiocese’s right to resubmit that case in the bankruptcy court with the creditors’ committee permitted to intervene as a party, if mediation does not work out as planned.

In the hearing, several of the attorneys present – including those for the archdiocese, the creditors’ committee and some of the insurers – noted that they had been working together to come to agreements before coming to the court to formalize the work. 

Harner also expressed appreciation for that cooperation, saying: “I commend counsel and all parties’ efforts to work together to create a mediation structure that works for all.” As in past hearings, she noted that she strives for an efficient and expeditious process that results in as much compensation as possible for the victim-survivors of clergy abuse. She thanked the parties for keeping the case moving.

Edwin H. Caldie, of Stinson LLP, who is the lead attorney for the creditors’ committee, said he is concerned about the timing of getting the mediators on board so they can begin their work, beginning with looking at calendars for those who will be involved.

He said he was pleased – and surprised – with the level of engagement and connection between lawyers for all sides, even though he has worked with some of these people before in other cases. “It has created more trust and hope in the mediation process as it continues,” he told the court.

Philip Anker, of WilmerHale, representing the Hartford insurance company, said at the hearing that he echoes the comments about cooperation and said he hoped to have an agreement about the mediator before the July 29 status conference that Harner scheduled.

She said, “I only want to intervene when the parties need me to. We can get together very quickly when needed.”

In light of the implementation of the Child Victims Act in Maryland that removed any statute of limitations in civil cases of child sexual abuse, the Archdiocese of Baltimore the filed for Chapter 11 bankruptcy protection Sept. 29, 2023. 

In a news conference July 8, Paul Jan Zdunek, chairman of the Official Committee of Unsecured Creditors, which represents all the victim-survivors who may have a claim in the case, and Baltimore Archbishop William E. Lori pledged to continue to cooperate toward the goals of compensating as many victims as possible equitably, allowing the archdiocese to continue its ministries and ensuring that policies and procedures are in place to prevent future incidences of child sexual abuse.

The creditors’ committee has not yet released the number of claims filed by the May 29 deadline. In early July, Zdunek said, “We don’t want to report on it until we have a clear picture as we believe it would be irresponsible to do so and would not be helpful to our process moving forward.”

Email Christopher Gunty at editor@CatholicReview.org

Also see

Mediation framework set for archdiocesan bankruptcy

Survivors committee and archdiocese discuss next steps in bankruptcy case

Deadline arrives for claims in Archdiocese of Baltimore’s bankruptcy case

Survivors of abuse address court for second time in bankruptcy process

Victim-survivors address court in Archdiocese of Baltimore’s bankruptcy process

Archdiocese files complaint against insurance companies in bankruptcy case

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