Litigation Resumes Over Insurance Coverage In Milwaukee Archdiocese Bankruptcy

As the Catholic Archdiocese of Milwaukee completes work on its plan of bankruptcy reorganization, litigation over insurance coverage resumes with competing court filings.  The Milwaukee Journal-Sentinel reports that the Archdiocese filed suit yesterday in federal bankruptcy court seeking to recover reimbursement from OneBeacon Insurance Co. for over $2.6 million in legal fees incurred defending claims that the Archdiocese allowed priests who were known sexual abusers to have access to children. In litigation begun before the Archdiocese filed for bankruptcy, two state lower courts had ruled that the claims against the Archdiocese fell under the policy exclusion for intentional acts. The Archdiocese appealed those rulings to the Wisconsin Supreme Court, but before that court could decide the appeal the bankruptcy petition was filed and an automatic stay on litigation was triggered. Yesterday, OneBeacon Insurance Co. filed a motion asking the bankruptcy court to lift the automatic stay and allow the state Supreme Court to decide the matter.