Diocese of Norwich racks up additional $1.1 million in legal fees in bankruptcy case
Norwich — Less than two months after a federal judge criticized the Diocese of Norwich for spending more than $1 million in legal and financial services fees related to its bankruptcy case, the diocese has racked up another $1,160,891 in fees over a recent 10-week period.
After his Sept. 9 criticism, bankruptcy Judge James Tancredi implemented an order in which the diocese would pay the firms its has hired 70% of fees and 100% of expenses, for a total of $845,137. The firms could be paid the remainder of the money at a later date. The order requires periodic reports on the bills from each firm.
Attorney Eric Henzy, who represents the committee of people who say they were sexually assaulted by diocesan priests and employees, declined Wednesday to comment on the new fees. In September he had expressed concerns that the greater the legal and professional fees in the bankruptcy case, the less money there will be to distribute to the victims. His firm, which is being paid by the diocese, is discounting its rates 10% and is charging about half of that of some of the diocese lawyers.
New London attorney Kelly Reardon, whose firm represents 15 of the claimants, said Tuesday she was amazed by the "gall of the diocese" when it comes to running up the legal fees. She said it indicates the diocese couldn't care less about the survivors.
Reardon, who has reviewed the bills, also pointed out an example of diocesan attorneys wasting money. She said the diocese was billed $5,000 to draft a one-and-a-quarter page notice to compel the creditors to release information about their interests. But she said that was written a month before they even received a request on Oct. 19 to produce the disclosure and had a chance to respond, meaning the notice may not even be needed.
The diocese's public relations firm did not respond Wednesday to an email requesting comment about the bills for fees incurred from July 15 to Sept. 30.
The Indianapolis-based law firm of Ice Miller billed the diocese $532,748 in fees for 817 hours of work and will initally be paid $372,923 or 70% of its bill along with expenses of $13,006. Its average per-hour fee was $655. Half of those hours were billed by partners who charge $835 and $795 an hour, respectively.
The Hartford law firm Robinson + Cole billed the diocese $171,986 fee for 382 hours of work and will initially be paid $120,390 or 70% of its bill. It was also paid for $2,321 in expenses. Its rates range from $270 an hour for a paralegal to $875 for work done by a partner in the firm. The firm's itemized bill comprises 26 pages.
B. Riley Advisory Services, a financial services firm with 70 offices across the country, billed the diocese $342,916 for 801 hours of work, as well as $76 of expenses. It will be paid $240,041 or 70% of the bill, which totals 25 pages of itemized expenses.
The Norwich firm Brown Jacobsen billed the diocese $4,862 and will be paid $3,403, or 70% of the bill, along with $186 for expenses. The firm's partners, Michael Driscoll and Jeffrey Godley, charged the diocese $110 an hour, a fraction of the fee charged by the other firms, for 44 hours of work.
Documents filed Monday show that diocesan Finance Officer Karen Huffer reviewed the bills and did not object to them.
Henzy's firm, Zeisler and Zeisler of Bridgeport, billed the diocese $92,790 for 240 hours of work from Aug. 19 to Sept. 30 at an average rate of $386.
In July, the diocese filed for Chapter 11 bankruptcy in the face of more than 60 men filing lawsuits in which they charge they were raped and sexually assaulted as boys by Christian Brothers and other staff at the diocese-run Mount Saint John Academy in Deep River from 1990 to 2002. Mount Saint John was a residential school for troubled boys whose board of directors was headed by retired Bishop of Norwich Daniel Reilly. Since then, additional people whose sexual assault allegations involved not only Mount Saint John but diocesan churches have filed claims.
This summer the diocese initially placed its assets, including cash, investments, cars and accounts receivable, at $21.2 million but has not yet publicly stated the current value of the 14 properties it owns. In its initial bankruptcy filing, the diocese estimated its assets at $10 million to $50 million but its liabilities at $50 million to $100 million. In past years, settlements paid to individual victims who say they were sexually assaulted by priests and sued the diocese averaged about $1 million each.
No deadline has yet been set for the filing of claims, but court documents show a Feb. 10, 2022, deadline is being discussed. The next court hearing on the case is scheduled for Nov. 9, at which time the deadline may be established. Information about the bankruptcy and filing claims can be found at dm.epiq11.com/case/rcdn/info.
Editor's Note: This version clarifies the payment costs of the diocese's attorneys and financial services firms .
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