The Catholic archdiocese filed for Chapter 11 bankruptcy protection in January 2011 as it prepared to defend itself against more than a dozen civil fraud lawsuits for its handling of clergy sex abuse cases, saying it was the only way to compensate victims while continuing its mission.
Lawyers for both sides met again Monday with a mediator, retired U.S. Bankruptcy Judge Randall J. Newsome, to negotiate a settlement, the Milwaukee Journal Sentinel reported Tuesday.
Archdiocese spokesman Jerry Topczewski said "much progress" had been made.
The extension of the 60-day mediation period into next week, which was ordered by U.S. Bankruptcy Judge Susan V. Kelley to end what she termed an "all-out war" and "scorched-earth" legal battle, ends adversarial proceedings through Oct. 2.
The case is the largest of Catholic diocesan bankruptcy to date in terms of the number of claimants, nearly 500, who say they were sexually abused by an individual working for the church, the newspaper said.