Parish Assets Not Includable In Archdiocese Bankruptcy

As reported by the Minneapolis Star Tribune, a Minnesota federal bankruptcy court yesterday refused to include the assets of 200 parishes, schools and other entities as part of the assets of the Archdiocese of St. Paul and Minneapolis in its Chapter 11 bankruptcy proceedings.  In In re: The Archdiocese of Saint Paul and Minneapolis, (MN Bkruptcy., July 28, 2016), the court said in part:

The typical substantive consolidation is reserved for situations where the finances of two or more debtors are so confusingly intertwined that it is impossible to separate them. Nothing of the sort is alleged here. There were insufficient facts demonstrating a complete abuse of the non-debtors’ corporate form under Minnesota law governing religious corporations and organizations.

Reacting to the ruling,  Archbishop Bernard Hebda in a statement (full text) said that he is "particularly thankful that [the judge] was not swayed by the allegations that the Archdiocese had hidden assets and engaged in deceptive practices...." He added: "The Archdiocese nonetheless continues to stand ready to work with counsel for sexual abuse claimants to provide fair compensation as part of our Plan of Reorganization.." [Thanks to Tom Rutledge for the lead.]