Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bankruptcy fees cost Wilmington Diocese almost $16M
Author: Joel R. Glucksman
Date: August 28, 2014
Key Contacts
Back
Bankruptcy fees have reached the spotlight recently, after they claimed almost one-third of the total payout in a recent Catholic diocesan insolvency case.
The Wilmington Diocese’s move to file for protection under Chapter 11 of the bankruptcy law in 2009 cost $15.8 million in lawyers’ fees and other expenses, The Associated Press reported. About $77 million was left over to pay into a trust for victims of sexual abuse by a former priest.
The Wilmington Diocese filed for bankruptcy protection after receiving a flood of lawsuits filed by survivors of clergy sexual abuse, according to The News Journal in Delaware. Many of these lawsuits would have been past the statute of limitations, but this bar was lifted for a two-year window by Delaware’s 2007 Child Victim’s Act.
Diocese attorney Anthony Flynn, of Young Conaway Stargatt & Taylor, told the news source that the $15.8 million sum for administrative costs was the third highest of the several diocesan bankruptcies nationwide. His firm received about $6.2 million.
“The cost is extremely high,” Flynn told The News Journal. “However you slice it, it was an extremely expensive process. But it was the only process we could use to make sure whatever assets were available could be apportioned among the survivor claimants.”
In stark disagreement, Wilmington attorney Tom Neuberger called the bankruptcy costs “outrageous,” and told the news source that more money could have been distributed had the Diocese agreed to appropriate settlements in mediation. His firm represented 99 of the 152 claimants in the case.
Attorney’s fees and expenses accounted for roughly $12.3 million of the total bankruptcy fees, according to The News Journal. The remaining sum went to financial advisers, consultants, accountants, a pension specialist and the Office of the United States Trustee.
The Wilmington Diocese isn’t the first diocese to fall into bankruptcy in America. As a U.S. bankruptcy attorney, In the past, I’ve written about the financial struggles many catholic churches are facing. Here are a few of my previous posts:
- Milwaukee Archdiocese Filing for Reorganization
- Judge Questions Archdiocesan Bankruptcy Plan
- Bankruptcy Hits the Catholic Church
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.