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Helena diocese seeks bankruptcy judge's approval of key piece of sex-abuse settlement

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HELENA, Montana — The Roman Catholic Diocese of Helena is asking a judge to approve an agreement with its insurers that would provide the bulk of the funding for a proposed settlement with hundreds of people who say they were sexually abused by clergy.

The plan would allow the insurers to buy back their policies from the diocese for $10.9 million, which would go toward the $15 million proposed settlement with 362 people who sued the diocese in 2011 over sexual abuse from the 1940s to the 1970s.

Those plaintiffs say the diocese knew or should have known the abuse was happening but did nothing to protect the children in the schools and parishes in western Montana at that time.

The diocese's insurers had filed separate legal challenges over which claims they are obligated to cover. This deal would settle those challenges and permanently bar anybody else from coming forward with sexual abuse claims related to those insurance policies.

The diocese filed for bankruptcy protection in January as part of the proposed settlement with victims, and the deal with the insurers is a big step toward finalizing that settlement and the diocese's bankruptcy reorganization plan.

"It is definitely key to moving forward," diocese spokesman Dan Bartleson said Thursday. "This is the beginning of confirming the plans that have been put in place."

U.S. Bankruptcy Judge Terry Myers has set an Oct. 22 hearing on the insurance settlement proposal at the federal courthouse in Butte. The diocese also is sending out public notices asking anyone who objects to the plan to send their objections in writing to the federal bankruptcy court.

Attorneys for the Ursuline Sisters of the Western Province, the diocese's co-defendants in the two sex-abuse lawsuits, said in a court filing earlier this month that they have an interest in the same insurance policies.

The Ursulines plan to object to the diocese's plan to ensure their rights aren't affected, attorney Elizabeth Fella said in the filling.

The plaintiffs are suing the Ursulines for abuse that allegedly happened at the St. Ignatius school run by the order of nuns.

The Ursulines are not participating in the diocese's settlement, and their own attempts to settle with the victims have gone nowhere. The first in a series of trials against the Ursulines is scheduled to begin in December.

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