DULUTH — U.S. Bankruptcy Judge Robert Kressel has handled thousands of cases in his nearly four decades on the bench.
He has seen an ever-growing number of consumers overwhelmed by credit card debt. He has moderated family feuds and sought to keep cash-strapped businesses afloat. He has steered big-name cases, including the restructuring of Sun Country Airlines and the fraud-ridden case that sent Twin Cities auto mogul Denny Hecker to prison.
By definition, most parties appearing in Kressel's courtroom find themselves experiencing the most challenging situations in their lives.
"It's a common thing that when people ask me what I do and I tell them, the comeback is usually, 'Well I hope I never see you again,'" he said.
Kressel has seen a lot since he was first appointed in 1982. But it wasn't until the past decade that he was dealt what he considers to be some of his most impactful cases as a judge.
Since 2015, he has been tasked with overseeing all the Catholic Church bankruptcies in Minnesota.
"They’ve been very difficult cases," he said. "They’re more than just bankruptcy cases, and I will certainly remember those. Of all the cases I’ve done, not only are they recent, but they’ve been the most emotional cases.”
Kressel, to date, has approved settlements totaling more than $325 million to benefit some 800 sexual abuse victims who filed claims against five dioceses plus the Crosiers religious order in the state.
The cases, evoking decades of trauma for survivors and imperiling the future of church operations in Minnesota, have been fraught with emotions, high-stakes litigation and media coverage that transcends most proceedings in Kressel's courtrooms.
But as that chapter closes, Kressel, too, is ready to move along. Currently the second-longest-serving bankruptcy judge in the nation, and a presiding judge in Duluth for 35 years, Kressel will fully retire June 30.
"It’s a humbling experience being a public servant," he said in an interview. "Maybe it's trite to say, but I just feel so lucky to have had this job for so many years. There's not a day that goes by where I don't pinch myself and say, 'How did I ever get this job?'"
From young judge to chief judge
Kressel, the son of a longtime Minneapolis attorney, said he never aspired to a career of bankruptcy work.
He was a solo practitioner working in Washington, D.C., in 1979 when he paid a visit to his father's former partner, who had been appointed to lead the newly created U.S. Trustee Program for Minnesota and the Dakotas. The office had been established within the U.S. Department of Justice to help administer bankruptcies and ensure legal compliance.
"At the end of the chat, he looked across the table and said, ‘Do you want a job?’" Kressel recalled. "I was a solo practitioner at the time and had little kids. A regular paycheck sounded kind of attractive."
Just three years later, at age 35, the judges of the U.S. District Court in Minnesota selected Kressel for a vacancy on the bankruptcy court, which maintains its own budget and largely operates independently from district court.
"It was not a very attractive position in those days," he said. "It didn't pay very well. There was a big boom going on in bankruptcy practice, so there was a lot of money to be made as a bankruptcy lawyer, and none of them really wanted to give that up to take this job, so there might have been a kind of shallow pool of candidates."
First serving the Twin Cities, Kressel quickly added monthly calendars at the federal courthouse in Duluth, which handles all cases filed in a 14-county region. Along with Fergus Falls, it is one of only two permanent locations housing federal court operations in Greater Minnesota.
"I think it’s really important that we have a judge here because it benefits the community when (litigants) don't have to travel far to go to court," said Anita Miller, deputy in charge of the Duluth bankruptcy court. "The judges of our Minnesota bankruptcy court don't want to pose any kind of hardship on people who are already facing hardship."
Throughout his tenure, Kressel said he has worked in some 25 federal courthouses. He was Minnesota's chief bankruptcy judge from 1986 to 1993, and he also spent 21 years on the 8th Circuit's Bankruptcy Appellate Panel — joining fellow judges to review decisions from courts in seven states.
‘As American as apple pie’
The biggest trend over nearly 40 years, Kressel said, is that the caseload has "exploded."
"About three-fourths of the American economy is consumer spending," he said. "Unfortunately, a fair amount of that spending is on credit cards. So people get in trouble. Some people consider it fraud, but it’s usually not that sophisticated. They just get overwhelmed, and they file bankruptcy."
Kressel noted that merchants have typically been paid, so it's usually the credit card companies that lose out when a consumer's debts are erased by the court. Those companies, however, continue to bring in massive profits. And while bankruptcy can elicit negative connotations, Kressel said it plays an important role.
"(Consumers) can start spending again," he said. "It keeps the economy going. … Our economy, as we’ve discovered through this pandemic, depends very largely on consumer spending."
Many bankruptcies move through the system without the judge ever having to get involved; it's only when there are disputes that he needs to step in. Bankruptcies are only handled in federal court, as judges need to issue orders that are binding across state lines.
"Bankruptcy is as American as apple pie," said retired Judge Gregory Kishel, a Northland native and court historian.
"If you’re going to have a society that has very liquid capital markets, money sloshing back and forth constantly, and you value individuals and individuals’ participation in that economy, then people have to have a fresh start, and businesses that might have made some bad mistakes but could survive should have a remedy."
Most cases are filed under Chapter 7, which allows for debts to be erased, or Chapter 13, which provides for a restructured repayment plan.
But increasingly, Kressel said, businesses also have been turning to Chapter 11 reorganization — a tactic used by asbestos companies as they were hit with a wave of lawsuits, and more recently by the Catholic Church in response to sexual abuse claims.
‘Gut-wrenching’ church cases
When Kressel was assigned the Archdiocese of St. Paul and Minneapolis bankruptcy in 2015, he said he initially approached it as if it were any other case. But it quickly became apparent that the church cases would be different — starting with the fact that some 450 abuse claims were filed by victims.
"I sealed them so that they weren’t public, and I at first didn't see any reason for me to read them," he said. "But then, at some point, I thought I should. And even though they were sometimes bare-bones descriptions of what happened, they were distressing to read — and that's a mild word for it."
Kressel, too, evolved his process for authorizing the reorganization plans. When the archdiocese case settled for $210 million, he held a "pro forma" confirmation hearing, asking for any objections and rubber-stamping the plan.
That changed with the Diocese of Duluth, when attorney Jeff Anderson, representing most of the 125 claimants, asked survivors and their supporters to stand in the courtroom as he gave an impassioned speech before Kressel approved a payout of more than $39 million.
When the Diocese of New Ulm reached an agreement, Kressel arranged to hold a special hearing in a state courtroom in the city, with three victims selected to tell their stories — a scene reminiscent of a criminal sentencing hearing.
Finally, by the time the Diocese of St. Cloud settled, COVID-19 forced the confirmation hearing to be conducted over the phone. Three representatives had again been selected, but then Kressel decided to simply open up the line to anyone.
"I think because no one could see them, about 12 more people spoke up and told their stories," the judge said. "It was one of the most gut-wrenching hours of my life to listen to their stories."
Kressel said it was powerful to hear survivors open up after carrying their trauma for decades and, in some cases, having their closest relationships torn apart.
"We’ve all read plenty about how these kids felt," he said. "They all broke my heart. But the ones that really broke my heart the most were the ones who talked about going to their parents. Most of them didn’t, because the priest told them not to, and they were raised to never question the priest. And their parents either didn’t believe them or refused to do anything about it. What a way to grow up as a kid."
Commitment to Duluth
Kressel, who lives in Minneapolis, technically retired from full-time service in 2012, but he has continued to hear cases under recall status. While he has been winding down his workload, he said he enjoys traveling to Duluth and wanted to keep that component.
"I've been working for free the last nine years," he noted. "I guess if you want any proof that I like this job, that's it."
Kressel's wife, Chris, often joins him on stays at Fitger's Inn. They paid a visit to the Duluth courthouse last week for a small ceremony attended by longtime colleagues on Flag Day, which also happened to be the judge's 74th birthday.
"We truly are a court family," said Miller, who has worked in the Duluth office for 29 years. "Judge Kressel leads the team, and he truly has a respect for the institution of the federal bankruptcy court. He's been a mentor and a friend. He judges with the utmost compassion, fairness and humor. He brings so much to the court."
Kressel is the second longtime bankruptcy judge to say goodbye to the Duluth courthouse in recent years. Kishel, a Virginia native and former Duluth attorney, retired in 2016 after several decades of splitting Northeastern Minnesota duties with Kressel.
"We always had a commitment that, for the convenience of local parties (or) local witnesses, we would always have a hearing here in Duluth," Kishel said. "Our institution is utterly committed to maintaining a presence here, because it's just a really important thing to be accessible in outstate Minnesota. And I say that not just as a Range guy and a guy who practiced here, but because it's the responsible thing for any public institution to do."
Starting July 1, the Duluth caseload will be handled by Judge William Fisher, who will also take over the still-pending Diocese of Winona-Rochester bankruptcy.