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Judge orders changes to information going to voters on Milwaukee archdiocese bankruptcy plan

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MILWAUKEE — The Archdiocese of Milwaukee must explain in documents being sent to its creditors why its bankruptcy reorganization plan classifies sexual abuse victims into categories, with plans to pay one group and not others, a federal bankruptcy judge ordered Thursday.

The archdiocese filed for bankruptcy in 2011, saying it would not have the money to pay if lawsuits filed by clergy sexual abuse victims went against it. The reorganization plan filed in February would provide about $4 million to pay nearly 130 victims, but it would exclude hundreds of others from compensation.

The archdiocese has maintained that it is liable only for abuse committed by its priests, and people who were abused by religious order priests or lay people working in schools or parishes should seek compensation from those organizations. Victims believe the archdiocese has responsibility for all priests and lay people working within its boundaries.

Bankruptcy Judge Susan Kelley told the archdiocese's lawyers to explain in documents going to creditors why the plan divided victims into groups to be paid or not paid instead of turning the money over to them and letting them decide how to divide it up, which is how other church bankruptcies have been handled.

Dozens of sexual abuse victims attended the hearing where Kelley and attorneys haggled over the wording of the documents to be sent to creditors voting on the plan. Kelley will then consider the votes in deciding whether to approve the plan.

Along with hundreds of sexual abuse victims, the archdiocese's creditors include the bank that holds the mortgage on its headquarters and pension and medical funds.

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