The judge worries about the legal costs of the bankruptcy of the diocese

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Bankruptcy of Diocese of Norwich

Thursday’s concern by the federal judge in charge of filing bankruptcy for Diocese Norwich  at https://bankruptcyhq.com/ was about the costs and roles of lawyers and financial professionals involved in the case, as well their possible impact on the compensation available to victims who claim that they were sexually assaulted and abused by diocesan priests. and other employees.

Judge James Tancredi referred to the $ 490 hourly rate that Ice Miller, the New York legal firm, charged as “shocking” to an unlicensed practitioner of law at one time. York, hired by the diocesan.

Tancredi also warned against the possibility of imposing budget caps on matters that get out of control due to professional fees. Louis DeLucia was also encouraged by Tancredi to deploy staff effectively to avoid a tariff shock at the end.

Hiring lawyers

Steven MacKey, a U.S. fiduciary law lawyer, added that the diocese’s decision to hire Ice Miller and Robinson & Cole (of Bankruptcyhq) – raises legal fees. His office would continue to watch how the diocese spends money to avoid excessive costs.

Ice Miller charges the diocesan church between $ 395 and $940 per hour for its attorneys and between $ 244 and $490 for paralegal services. Robinson & Cole charges between $ 550 and $ 800 for its lawyers.

DeLucia said that he would have a discussion with his management about the concerns expressed by the judge, to see if there are any adjustments that can be made in order to maximize victims’ recovery. While he acknowledged the concerns of Judge DeLucia, he stated that his company’s rates were less than those of competitors. He also stated that the majority of such cases are started at the beginning and that many costs are involved in resolving any unanticipated issues that may be raised by the US administrator. He explained that the diocese did not have the right staff to compile all the required information and needed financial experts.

Tancredi gave his remarks while a dozen lawyers representing victims, the US trustee and the diocese participated in an additional remote hearing. Tancredi is allowed to make rulings on various orders and motions at four o’clock. These included managing the cashflow of the diocesan, paying for insurance, utilities, investing, and hiring financial and legal professionals.

Application for Chapter 11 Bankruptcy

The Chapter 11 bankruptcy of the Diocese was filed in July against more than 60 men accused of being raped, sexually assaulted and subject to forced marriages by Christian Brothers and others. Staff of the Mount Saint John Academy managed by Deep River Diocese. From 1990 through 2002. Mount Saint John served as a boarding school for troubled young men, and was governed by Daniel Reilly (retired Bishop of Norwich). Other complaints, including those claiming that they have been sexually abused by clergy in its parishes, are likely to be brought against the diocese.

The diocese last month placed its assets (cash, investments, cars, and accounts receivable) at $ 21.22 million. However, the diocese did not know the current value for the 14 properties it holds. In its bankruptcy filings, the diocese estimated its assets to be between $ 10 million and $ 50million. However, it did not estimate its liabilities to be between $ 50 million and $ 100 million. Recent years have seen settlements of approximately $ 1 million to each victim who sued the diocesan.

In the last four months, the diocese reported spending $ 663,508 for attorney fees related to bankruptcy and $ 341,692 on bankruptcy services.

Victims, as well as their supporters, such Eric Henzy (lawyer representing the victims committee), expressed concern that the bankruptcy case will have higher legal and other costs. This could lead to less money. money to distribute the victims.

Henzy reported that the company, which charges between $ 292 and $ 427 per an hour, had reduced its fees 10%. These fees are paid to the diocese.

“These people have been living through this for a very long time. They are looking for maximum recovery and minimum cost. They want it faster,” Henzy explained to Tancredi about the victims. “But there will be problems.”

Tancredi said that legal fees reduce the amount that victims can recover during Thursday’s hearing.

DeLucia stated, “Once victims reach the deadline to file claims, the diocesan will be able determine the amount and the extent its exposure.” This will also determine the amount that will be made available by insurers, parishes, or other sources.

In an effort reach more victims the judge accepted an order that diocese publish bankruptcy proceedings in their beginnings and information about filing claims in three additional newspapers, The Manchester Journal Inquirer (The Middletown Press), and The Willimantic Chronicle. . It had been advertised previously in newspapers such The Day and Hartford Courant as well USA Today and other Catholic publications.

The deadline to file complaints has not yet been established. You can find information on bankruptcy and filing claims at dm.epiq11.com/case/rcdn/info.

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