Friday, January 18, 2013

Cemetery Trust Assets Included In Bankruptcy Estate of Milwaukee Archdiocese

In Listecki v. Official Committee of Unsecured Creditors, (ED WI Bkrptcy., Jan. 17, 2013), a Wisconsin federal bankruptcy court rejected attempts by the Archbishop of Milwaukee in the Archdiocese's Chapter 11 reorganization case to shield assets of a Catholic Cemetery Perpetual Care Trust from creditors. The Trust argued that including its assets in the bankruptcy estate would violate the Religious Freedom Restoration Act and the free exercise clause of the 1st Amendment. The court disagreed, concluding that RFRA only applies against the government, not in a suit against the creditors' committee which not a government actor and is not acting under color of law.  The court also concluded that RFRA may not be used to invalidate a state law, such as the Wisconsin fraudulent transfer law; and neutral, generally applicable provisions of the Bankruptcy Code do not violate the 1st Amendment's free exercise clause.

Meanwhile, the Milwaukee Journal-Sentinel reported yesterday that in the Archdiocese's bankruptcy proceedings, lawyers for sex-abuse victims are now asking the court to make public all records involving credibly accused priests, as well as their depositions and other documents. The request comes after a controversy over the Archdiocese's failure to provide the Fond du Lac police department information on an accused and defrocked priest.


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