Insurers in Delaware Diocese Bankruptcy Balk at $15M Payout

By RANDALL CHASE | September 8, 2011

A dispute over insurance payments is threatening to blow up the Catholic Diocese of Wilmington’s bankruptcy reorganization plan.

Under the plan, the diocese, its parishes and affiliated entities would be released from legal claims related to priest sex abuse in return for paying $77 million to some 150 alleged abuse victims by Sept. 26. Insurers are responsible for $15.4 million of the settlement.

But attorneys for the victims say the insurers are refusing to pay by the agreed time because two pedophile priests have filed appeals challenging a judge’s confirmation of the diocese’s plan.

Diocese attorneys asked the judge on Tuesday to declare that his confirmation order is final and non-appealable as far as the insurance settlements are concerned, or to approve the insurance settlements separately.

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