Victims’ attorneys appeal judge’s decision not to consolidate parish, archdiocesan assets

| August 11, 2016 | 1 Comment
The U.S. Courthouse in Minneapolis. iStock

The U.S. Courthouse in Minneapolis. iStock

A committee representing sexual abuse claimants filed Aug. 10 to appeal a bankruptcy court judge’s ruling that declined to consolidate the assets of the Archdiocese of St. Paul and Minneapolis with those of parishes and other Catholic entities in the archdiocese’s bankruptcy process.

Minneapolis attorney Robert Kugler appealed the ruling to the Federal District Court. Kugler represents the unsecured creditors committee, which includes people with clergy sexual abuse claims.

St. Paul attorneys Jeff Anderson and Associates also filed an appeal Aug. 10. The firm represents more than 350 clergy sexual abuse claimants.

The unsecured creditors committee filed a motion in May asking U.S. Bankruptcy Court Judge Robert Kressel to consolidate the assets of more than 200 parishes and local Catholic organizations such as the Catholic Community Foundation, Catholic Cemeteries and some Catholic schools, with those of the archdiocese. As The Catholic Spirit previously reported, the motion argued that the organizational relationships between the archdiocese and the institutions give the archdiocese or archbishop control over their governance and finances, thereby linking their assets.

Attorneys for the archdiocese, parishes and other Catholic entities argued that the archdiocese and other institutions were separate entities under civil law.

On July 28, Kressel dismissed the unsecured creditors committee’s motion, writing that the committee “failed to allege sufficient facts to support substantive consolidation.”

The archdiocese filed for Reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2015 in response to mounting claims of clergy sexual abuse. In May, it filed a plan for Reorganization, which listed an initial $65 million to be used primarily for sexual abuse claimant compensation.

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