By Brendan O'Brien
MILWAUKEE (Reuters) - The Catholic Archdiocese of Milwaukee said on Wednesday it has proposed a restructuring plan for the U.S. Bankruptcy Court that would establish a sex abuse victim compensation fund worth $4 million, an amount advocates called woefully low.
The $4 million would be made available to abuse victims partly through a loan the archdiocese plans to secure using property as collateral and may be used to sue the church's insurance companies, the archdiocese said in a statement.
The Roman Catholic Church in the United States has been hit with a series of abuse accusations and scandals during the past two decades. The scandals have cost the U.S. church about $3 billion in settlements and driven prominent dioceses like Milwaukee's into bankruptcy.
The archdiocese filed for Chapter 11 bankruptcy protection in 2011, citing the financial drain of settling sexual-abuse claims and acknowledging missteps by the church in dealing with pedophile priests. It expects to file a restructuring plan with the court on Wednesday that includes the fund.
The archdiocese in July released hundreds of documents showing that Milwaukee church officials vigorously shielded pedophile priests and protected church funds from lawsuits during a decades-long sex abuse scandal.
"No amount of money could ever be enough to restore what was taken from those who suffered abuse," Archbishop Jerome Listecki said in a statement.
The Survivors Network of Those Abused by Priests said it hoped the court would reject the archdiocese's restructuring plan and the compensation fund.
"It is paltry to say the very least," SNAP spokesman David Clohessy said. "It's way, way off the mark."
Clohessy said at least five sex abuse victims in the United States had received individual settlements against the church of more than the $4 million the Milwaukee plan would provide.
The $4 million proposed by the Milwaukee archdiocese would be one of the smallest, if not the smallest, fund of its kind, according to Bishopaccountability.org, a website that tracks settlements and bankruptcy cases involving the Roman Catholic Church in the United States.
If the archdiocese successfully sues its insurance companies, the additional money won in court would be added to the fund, archdiocese spokesman Jerry Topczewski said.
The fund will be reserved for victims who have not previously settled with the archdiocese and who can prove they were abused by an archdiocese priest rather than priests from independent orders, Topczewski said.
About 125 of the 570 claims filed against the archdiocese may be eligible for a recovery from the fund, Topczewski said.
The restructuring plan also would establish a $500,000 fund for lifetime therapy for victims of sex abuse by clergy, the archdiocese said.
(Reporting by Brendan O'Brien; Editing by Ken Wills)