Parishes can't be forced into archdiocese bankruptcy, court affirms

Parishes and Catholic entities associated with the Archdiocese of St. Paul and Minneapolis cannot be forced to make their assets available for its bankruptcy court settlement, a U.S. Court of Appeals affirmed Thursday.

The ruling, however, does not affect the more than 100 Twin Cities parishes facing lawsuits for clergy abuse outside the bankruptcy.

Attorneys representing clergy sex abuse victims in bankruptcy court had argued that the archdiocese assets are far greater than the chancery reported to the court.

The archdiocese reported a net worth of $45 million, which abuse attorneys argued was a fraction of its true worth.

They argued that the true worth should reflect more than $1 billion in assets from entities such as the archdiocese's 187 parishes, Catholic cemeteries and the Catholic Finance Corp.

The ruling, by the Eighth Circuit U.S. Court of Appeals, affirmed a 2017 decision by U.S. Bankruptcy Court Judge Robert Kressel, who presides over the archdiocese bankruptcy case.

The case is now in its fourth year of mediation. "We understand the [clergy abuse survivors] committee's sincere attempts at recovery for a class of creditors who have suffered greatly by clergy abuse," said the appeals court ruling. "However, global consolidation of all entities in the archdiocese is not authorized by the bankruptcy code."