In re: Archdiocese of Milwaukee

Federal 7th Circuit Court
Civil Court
Case Number: 
No. 12-3689
Decision Date: 
February 25, 2014
Federal District: 
E.D. Wisc.
In instant Chapter 11 proceeding, Bankruptcy Ct. did not err in disallowing claim against debtor-Archdiocese stemming from allegations of sexual abuse by priest, where claimant had previously signed release of said claim in exchange for $100,000 payment. While claimant, in attempting to set aside release, asserted that he had been fraudulently induced to sign release where representative of debtor gave him false information that no other individual had been abused by said priest, Bankruptcy Ct. could properly find that release was binding on claimant where, although claimant stated that information provided by representative was important emotionally, claimant never explained how such information actually factored into his decision to accept $100,000 settlement offer. Moreover, Bankruptcy Ct. could conclude that other factors led to claimant’s acceptance of settlement offer since, at time of settlement, it was questionable under Wisconsin law whether, because of statute of limitations problems, claimant had any cause of action against debtor for either negligent supervision or fraud.