Calif. diocese threatened with contempt

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Maybe the diocese is hiding money, maybe it is not. Everybody knows that bankruptcy lawyers pull a lot of shenanigans to get debtors the best deals they can. A lot depends on factors over which no one has real control - the attitude of the judge, the personalities of the lawyers, and a host of other intangibles.

A lot of these problems started a couple of decades ago when the bankruptcy law was changed to give debtors an easy way out. It wasn’t long before large entities simply included bankruptcy as another financial management tool. That’s what the SD diocese is doing here. It is a handy way to avoid having liability imposed in trials. You see, you don’t have to be broke to file for bankruptcy protection. Anybody can do it. And, it is indeed a byzantine system that can be navigated only by the well-initiated. But for the cognoscenti who can afford the fees and costs, it is a very handy financial/legal weapon to use against creditors.
 
Boswell wrote in court documents Tuesday that no intentional misrepresentations or misstatements had been made. She said the diocese has “no access or control” over money in more than 770 bank accounts opened by parishes and parochial schools under the diocese’s taxpayer identification number.I guess I don’t understand. Is the bankruptcy judge wanting to obtain assets belonging to individual parishes rather than the diocese?

Why would individual parish assets belong to the diocese? Our parish, for example, can borrow money from the diocese, but parish debts belong to the parish and parish assets belong to the parish.
 
. . .The judge said any post-bankruptcy transfers between the diocese and parishes outside of normal cash operations violate her ruling against shifting the diocese’s assets while the bankruptcy case is pending. She said any transfers require court approval.
In a sternly worded order, Adler said attorneys Susan Boswell, Jeffry Davis and Victor Vilaplana appear to have “conspired with parishes” to create new bank accounts separate from the diocese.
Boswell wrote in court documents Tuesday that no intentional misrepresentations or misstatements had been made. She said the diocese has “no access or control” over money in more than 770 bank accounts opened by parishes and parochial schools under the diocese’s taxpayer identification number.
Davis wrote in court papers that he thought comments Adler made in an earlier hearing suggested that parishes should obtain their own taxpayer identification numbers for clarity in the bankruptcy case. . . .
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I read elsewhere that the attorneys told the parishes that this was being done with the judge’s approval. I suspect misquoting a judge is not conducive to an attorney’s health. “I thought you meant . . .” doesn’t make it.
 
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