A new settlement has been reached with the Catholic lay order, the Irish Christian Brothers, that affects 160 victims of sexual abuse at the former Mount Cashel orphanage in St. John's.
The settlement includes a $16.5-million cash payment from the Christian Brothers and one of its insurers and affects 400 men and women in the U.S. and Canada who say they were molested as children by members of the Christian Brothers.
Geoff Budden of Budden, Morris Law Offices in Mount Pearl, who represents 90 former Mount Cashel residents, said it will take several months for the allocations to be worked out and eligible victims to receive cheques.
The plan will still require a majority vote of all the claimants, but a select committee has approved it.
Clients can continue with claims
The settlement does not prevent any of the Mount Cashel clients from continuing their claims against the Catholic archdiocese of St. John's, nor the U.S. victims from pursuing action against Catholic organizations there.
The victims include people who were at the Mount Cashel orphanage in the 1940s right up to when it closed in the late '80s. The legal battle for those victims stretches back to the late 1990s, and Budden deemed Thursday's announcement an important one for them.
The cash could potentially be increased by several million because there is an outstanding lawsuit involving a high school in the Bronx area of New York, plus dealings with other insurers that haven't been settled, as well as the future sale of three properties, said James Stang of Pachulski, Stang, Ziehl & Jones, counsel to the official committee of unsecured creditors for The Christian Brothers Institute and The Christian Brothers of Ireland, Inc.
The committee involved seven representative victims appointed by the U.S. Justice Department, although three of the men were Canadian abuse victims, Stang said.
According to Stang, ownership of the high school in the Bronx was transferred years ago in an attempt to protect it and he credited Budden with uncovering documentation Stang believes will result in that property being handed over to the creditors.
Budden's firm participated with several U.S. law firms in mediation presided over by Judge Elizabeth Stong of the U.S. Bankruptcy Court for the Eastern District of New York.
Stang expects everything will be resolved within two years on those outstanding matters and said the settlement also allows the Christian Brothers, now in dwindling numbers, to go on.
"The brothers now have the opportunity to tell themselves and tell their alumni they have reached what we think is a fair settlement - not enough, but fair in terms of the assets," Stang said.
Stang said he's open to hearing from the archdiocese if it wants to now settle claims against that entity.
As for the settlement announced Thursday, the committee has approved the terms and conditions of an agreed-to reorganization plan in the Chapter 11 cases of The Christian Brothers Institute and The Christian Brothers of Ireland, Inc. (In the United States, the Christian Brothers are the civil arms of the North American Province of the Congregation of Christian Brothers of Ireland).
In response to sexual abuse claims, the Christian Brothers filed Chapter 11 cases on April 28, 2011 in the United States Bankruptcy Court for the Southern District of New York. During the course of the Chapter 11 cases, more than 400 survivors of sexual and physical abuse filed claims with the Bankruptcy Court. The claims generally arise from the Christian Brothers' operation/staffing of schools and child-care facilities from 17 U.S. states and Canada.
The reorganization plan, which the parties anticipate will be filed within the next three weeks, provides for steps by the Christian Brothers which the committee said it believes will safeguard children from future abuse.
Stang said claimants will receive notices within 45-60 days and the plan will require the acceptance vote of two thirds of the clients.
Then there will be a procedure worked out to assess how the money is distributed.
St. John's lawyer Richard Rogers, who represents seven clients among the 160 Mount Cashel claims said he learned of the proposed settlement Thursday.
"Definitely this is good news," he said, adding it allows victims who didn't fall in the timeframe that the provincial government compensated to obtain closure.
"It's a very positive thing that probably would not have happened if we had gone to court."
According to a statement from a spokesman for the Christian Brothers based in New Rochelle, N.Y., prior to filing for Chapter 11, the order had been operating at an annual seven-figure deficit, including mounting legal costs involving lawsuits, particularly in Seattle, Washington and St. John's.
In the statement from the Christian Brothers and Christian Brothers of Ireland, Brother Kevin Griffith, deputy leader of the Edmund Rice Christian Brothers North American Province, said that the Chapter 11 reorganization proceedings have been imperative to the healing and reconciliation process.
"Intense negotiations during the past three months have led to painful concessions in bringing about this mutually agreed upon settlement. This settlement will allow an opportunity to recommit ourselves to bringing the gospel of Jesus and the charism of our founder, blessed Edmund Rice, to those we serve. The protection of children must remain the highest of priorities in creating safe environments at our ministry sites and in our communities. Let us continue to pray for all those affected by child sexual abuse and ask the Lord for healing and reconciliation," Griffith said.