Mediation framework set for archdiocesan bankruptcy

The parties in the Archdiocese of Baltimore’s Chapter 11 bankruptcy have agreed to a framework for mediation in the case. 

Judge Michele M. Harner, who oversees the process, signed the order July 29, which resulted after the three sides came to an agreement on the structure. The agreement includes the archdiocese as the debtor; the Official Committee of Unsecured Creditors, representing victim survivors who have claims in the case; and insurance companies that may have held policies for the archdiocese, its parishes and schools during the time period in question.

During a brief court hearing via teleconference July 29, Harner said she was pleased to hear that the sides had hashed out their concerns. “I think mediation has the best success when everyone is in agreement. I’m pleased that we reached a consensus,” she said.

Edwin Caldie, an attorney representing the survivors’ committee, said during the hearing that his clients still had a significant disagreement with the insurers on implications of a recent Supreme Court case on the archdiocese’s Chapter 11, but that “pragmatism won out” and he believes the plan to move to mediation works best.

Harner continued to emphasize that the sooner mediation can begin, the better it will be, since a protracted process adds time and legal costs and cuts into the amount of a settlement pool that could be available to survivors. She kept the hearing to under 15 minutes, with the admonition that if major issues arose, the court could schedule another hearing quickly.

The judge’s order names two mediators: Robert J. Faris and Brian J. Nash, who had been nominated in May by the archdiocese and the survivors’ committee. A third mediator will be selected by the insurers, who have until Aug. 5 to submit the name to the judge.

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.

According to the order, since Faris will be performing judicial duties, he can be reimbursed only for out-of-pocket expenses related to the mediation, but no other fees. As the debtor, the archdiocese will pay Faris’ expenses, as well as reasonable fees and costs for Nash. The archdiocese and the insurers will share the costs for the third mediator.

The order sets aside an adversarial case the archdiocese filed against its insurers, with the stipulation that if the mediation does not work out, the archdiocese and the survivors’ committee can bring a new adversary proceeding.

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