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Milwaukee Archdiocese appears closer to resolving bankruptcy case

MILWAUKEE (WTAQ) - The Milwaukee Catholic Archdiocese appears to be getting closer to resolving its three-year-old bankruptcy case. 

The church has asked Federal Judge Rudolph Randa to delay proceedings for 60 days in a lawsuit by the church against its insurance company. The two parties have agreed to mediation, amid a legal question of whether church insurance policies can be used to pay victims of sex abuse by former Catholic priests. 

The case does not involve the 570 sex abuse victims who've filed for claims in the church bankruptcy.  

Michael Finnegan, an attorney for the creditors, says victims should have a place a the mediation table. At this point, the archdiocese will only say that it's trying to move the bankruptcy case forward.

Finnegan says there needs to be a decision on the use of the insurance proceeds before the overall case can proceed. 

The archdiocese filed for bankruptcy 3 years ago, to keep the church going while it rounds up the millions-of-dollars needed to pay the sex abuse victims. If insurance cannot be used, the church might be hard-pressed for options. 

Randa has already ruled that church cemetery funds must be left alone -- although the creditors are appealing that decision. 

Bankruptcy Judge Susan Kelley has ruled that individual parishes do not have to pay, because they're separate entities.