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
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
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.