Archbishop: ArchSPM not shielding assets, accusations signal work needed to gain trust

| May 25, 2016 | 6 Comments
Archbishop Bernard Hebda speaks to media on the lawn of his residence May 24. Jessica Trygstad/The Catholic Spirit

Archbishop Bernard Hebda speaks to media on the lawn of his residence May 24. Jessica Trygstad/The Catholic Spirit

Archbishop Bernard Hebda emphasized that the Archdiocese of St. Paul and Minneapolis has been fully cooperative with the U.S. Bankruptcy Court and has fully disclosed its assets as part of those proceedings.

“Let me be extremely clear: The archdiocese has disclosed all of its assets and followed all of the rules set forth by the court and all directives from the judge,” Archbishop Hebda said during a press conference on the lawn of his residence May 24.

The archbishop’s remarks followed allegations from attorneys representing clergy sexual abuse victims that the archdiocese is hiding or undervaluing assets that could be made available for victim compensation as part of its bankruptcy resolution. After entering Reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2015, the archdiocese has spent months in mediation with insurance carriers and victims’ attorneys. It is expected to file a plan for reorganization by May 27.

The archdiocese denies shielding funds with potential for victim remuneration.

“I know for at least the past 11 months, we have been working very hard to marshal and maximize our assets with the hope of providing the most for the most,” Archbishop Hebda said, referring to his time as apostolic administrator in the archdiocese. After holding that temporary role, Archbishop Hebda was installed the archdiocese’s archbishop May 13.

In a motion filed with the court May 23, attorney Robert Kugler, who represents sexual abuse victims in the archdiocese’s bankruptcy proceedings, argued that the archdiocese should consider Catholic parishes, schools and foundations as fund sources, despite their separate incorporation.

It alleges that in recent decades the archdiocese legally separated itself from more than $1 billion in assets through the separate incorporation of parishes and the establishment of separate entities for donors, such as the Catholic Community Foundation and the Catholic Finance Corporation, while maintaining supervision and control of the parishes and foundations, primarily through their governing boards.

The motion asks the court to consolidate the assets and liabilities of the archdiocese with those of parishes, parish schools and parish cemeteries; the Catholic Community Foundation; the French-speaking African community, the Native American community at Gichitwaa Kateri in Minneapolis, and the Latino community at Sagrado Corazon de Jesus in Minneapolis; the Catholic Finance Corporation; Catholic Cemeteries; and the high schools of Totino-Grace, DeLaSalle and Benilde-St. Margaret’s, which sit on archdiocesan-owned land.

In a May 24 press conference, Jeff Anderson, a St. Paul attorney representing 378 sexual abuse victims with claims against the archdiocese, also suggested that the archdiocese include among its assets those of the Catholic Services Appeal Foundation and Catholic Charities, for a total of $1.7 billion.

Archbishop Hebda said the archdiocese is carefully reviewing the motion and will count on the court to evaluate it.

“It sadly tells us that there is much that needs to be done to restore trust in our affirmations that we are serious about redressing wrongs,” he said.

“The bankruptcy process is complex and difficult. It can be, at times, adversarial,” he added.

He said the archdiocese plans to file a plan for Reorganization this week.

“We welcome the scrutiny of the court and all others involved,” he said. “We believe it will show our commitment to a fair, just and timely resolution of all the claims made against us, especially for those who have been hurt by people in the Church.”

He asked for continued prayers for sexual abuse victims and their families, and for a quick resolution for the bankruptcy proceedings.

May 25 marks the final day decades-old sexual abuse claims can be filed under the Minnesota Child Victims Act, which the State Legislature passed in 2013. The law lifted for three years the statute of limitations for child sexual abuse civil suits.

The lifting of the statute ushered in a wave of claims against clergy who had been or were serving in the archdiocese, leading the archdiocese to enter Reorganization as a means to distribute assets equitably and fairly among victims. By a court-established claim deadline in August 2015, more than 400 claims of clergy sexual abuse had been filed against the archdiocese.

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