Attorneys fees mount in Duluth diocese bankruptcy

A federal judge has approved payment of about a half million dollars in fees and expenses for law firms working on the bankruptcy of the Diocese of Duluth.

Most of the money goes to law firms representing the diocese. Attorneys for the creditors committee, which represents sex abuse victims and other claimants, received about $60,000. The diocese is on the hook for those legal costs.

The church filed for bankruptcy in December. saying that's the only way it can compensate clergy sex abuse victims and continue the church's mission.

The move came after a jury ordered the diocese and a Catholic religious order to pay more than $8 million in damages to a man who was sexually abused by a priest. Despite some insurance coverage and some savings, the diocese said it didn't have enough assets to cover it's $5 million share of that judgment and possible compensation for other abuse victims.

The diocese has admitted to having credible accusations of sex abuse against 34 priests who served in the diocese. The church has acknowledged paying $780,000.00 in previous settlements. Much of that amount was covered by insurers.

The diocese, which includes over 56,000 Catholics and 92 parishes in ten northeastern Minnesota counties, has had about $3 million in annual revenue. For its 2015 fiscal year, the diocese reported its liabilities exceeded its assets by about $7 million. The major factor was underfunded pensions.

Correction (Aug. 4, 2016): An earlier version of this story's headline incorrectly referred to Duluth as an archdiocese rather than a diocese.