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Milwaukee archdiocese proposes $4M for victims

m.l. Johnson, Associated Press

FILE - In this Jan. 4, 2011 file photo Milwaukee Archbishop Jerome Listecki answers questions in St. Francis, Wis., after announcing the archdiocese would file for bankruptcy. Listecki said Wednesday, Feb. 12, 2014, that the Archdiocese of Milwaukee has proposed setting aside $4 million to compensate the victims of clergy sexual abuse in its bankruptcy reorganization plan. (AP Photo/Morry Gash, File)

MILWAUKEE (AP) -- The Archdiocese of Milwaukee has proposed setting aside $4 million to compensate the victims of clergy sexual abuse in its bankruptcy reorganization plan, according to a statement provided to The Associated Press.

The archdiocese filed for bankruptcy in 2011, saying pending sexual abuse lawsuits could leave it with debts it couldn't pay. Its creditors include hundreds of people who were sexually abused by clergy. They have accused the archdiocese of covering up priests' crimes while assigning them to new churches without warning parishioners.

Milwaukee archbishop Jerome Listecki said Wednesday morning that the bankruptcy plan will be filed later in the day.

The Milwaukee archdiocese is among more than a half-dozen to file for bankruptcy in recent years. Other dioceses have set aside much larger sums to compensate victims of sexual abuse. The Milwaukee archdiocese itself agreed in 2006 to a nearly $16.7 million settlement for 10 victims in California who were abused by two of its priests while they were working there.

Listecki acknowledged that some might be dismayed by the $4 million offer but said the archdiocese would provide therapy for the remainder of victims' lives.

"No amount of money basically is enough to compensate for the loss," he said. "So I think that's first and foremost to realize that."

Some of the $4 million could be used to sue the archdiocese's former insurers to get them to pay victims, according to the archdiocese statement. Listecki said it is too soon to say how the money might be divided up. The archdiocese has not outlined how much it hopes to collect from those companies.

The archdiocese recently reached a deal with one insurer, Lloyd's, of London, to buy back its policies for an as-yet undisclosed sum. The deal relieves Lloyd's, which insured the church in the 1960s and 1970s, of liability in regard to the sexual abuse claims.

The archdiocese said the $4 million will come from the settlement with Lloyd's, other assets and possibly a loan, with church property used as collateral.

Details of the archdiocese's assets are expected to be included in the reorganization plan.

Clergy sexual abuse victims had hoped to be paid in part from a more than $50 million cemetery trust fund, but a federal judge ruled last year that the trust fund was off-limits. U.S. District Judge Rudolph T. Randa said that money could be used only to care for and operate Catholic cemeteries.

The creditors committee, which represents sexual abuse victims as well as others with bankruptcy claims against the archdiocese, has appealed that decision.