Supplementing what has been posted above, may I add the following:
(1) There are 2 general ways the local Catholic Church in any given country, or in any U.S. State, to “exist” legally as a juridical person: (a) as a Corporation Sole; or (b) as a charitable organization incorporated as non-profit.
(2) Both are endowed the attributes of corporate life by “legal fiction.” As a Corporation Sole, the local ordinary, i.e., the presiding Bishop, incorporates himself as the “sole corporation,” holding the property and business of the Church in his name. As a charitable organization, the Diocese, headed by the Bishop, is incorporated as a non-profit corporation having the same or similar rights and privileges as an ordinary corporation.
(3) Individuals and “corporations” (considered as juridical persons by legal fiction) are both entitled to file for protection under Federal bankruptcy laws.
As a corporation (Sole or otherwise), therefore, the Diocese of Tucson has the right/privilege to avail itself of the protection of Federal Bankruptcy Laws.
These laws aim to provide a legal cover for individuals and corporate entities against catastrophic claims over their assets where there is a reasonable certainty that such an event would constrict their ability to continue operating or their very own survival.
In the meantime, the Diocese should not be constrained to operate its normal day-to-day business while it tries to re-organize its finances.
