The Diocese of Milwaukee has settled the final chapter of a lawsuit resulting from the failed Lake Oaks senior citizen housing project on the grounds of the DeKoven Center in Racine, Wis.

Church Insurance, the diocese's insurer, has agreed to pay the $3 million settlement; the diocese will pay legal costs. The investors, some 1,500 people, will receive about $1.62 from the agreement, for a total reimbursement of about $6 million of their $11.7 million investment. Executive officer Carl Eschweiler said Church Insurance representative David Rider met with diocesan executive council June 24 in "a show of support at a difficult time."

The settlement was announced on the day the case would have gone to trial. The Rt. Rev. Roger White, Bishop of Milwaukee, said the closure was not an admission of wrongdoing. "The failure of the project was disappointing to us as well as to investors," he said, adding that "all parties recognized the financial benefit of a swift settlement."

Lake Oaks is not connected with the DeKoven Center; the two properties are separately owned. The center's director, the Rev. Travis Du Priest, said the settlement "clears the way" for the DeKoven Foundation's possibilities of repurchasing the historic property.