St. Paul-Minneapolis Diocese to Declare Bankruptcy

[Jerurussia]

startribune.com/lifestyle/288822521.html

Milwaukee’s Archbishop and now New York Cardinal Archbishop Dolan of the Diocese of New York forestalled bankruptcy by isolating and limiting diocesan sexual abuse settlement funds by creating a trust of 50+ million to service the Catholic cemeteries in the Milwaukee diocese’ purview.

This announcement of bankruptcy by the diocese of St. Paul-Minneapolis was announced one week before a trail for clerical sexual abuse was to begin, and is seen by critics as a means to limit not only cash outlays but the release of information. PAX CHRISTI +

 

[otjm]

Ah yes, the critics.

A pound of flesh, to bait fish, withal. If it will feed nothing else, it will feed my revenge.

And we continue to clean up the mess which started - when exactly seems a moving target, but can be cast back to (at least starting with) men ordained in the 1950’s, if not the 1940’s.

And I can put it that far back because in 1960, my classmates from grade school and I rode in from the suburbs with a priest teaching at one of the Catholic high schools in Portland; he was criminally convicted finally in about 1980. He wasn’t some wild-child ordained in the 70’s or 80’s.

And here we go again.

If there is a bishop out there who hasn’t figured this out, then they need to be removed from their diocese and sent to a life or prayer and penance in a monastery.

 

[ProVobis]

From the article:

Q : How does an archdiocese bankruptcy differ from a business bankruptcy?

A : They are very similar. Secured creditors, such as mortgage holders on the diocese’s real estate, will be paid first. Priority creditors, such as the IRS, come next. Victims, who are unsecured creditors, are paid next and would be likely be divided into classes. The plan can treat each class differently.

The bankruptcy code in the U.S. astonishes me. Perhaps our lawmakers can start looking at it. Theoretically if the property is enough “underwater” the bankers could end up with the assets, leaving nothing for the abuse victims. Of course, the judge has a little leeway, but those banks can get ruthless, especially when it comes to new loans. Most bond-holders are unsecured so they will no doubt get pennies back on the dollar, if anything at all.

Good luck in raising new funds.

 

[otjm]

From the article:

The bankruptcy code in the U.S. astonishes me. Perhaps our lawmakers can start looking at it. Theoretically if the property is enough “underwater” the bankers could end up with the assets, leaving nothing for the abuse victims. Of course, the judge has a little leeway, but those banks can get ruthless, especially when it comes to new loans. Most bond-holders are unsecured so they will no doubt get pennies back on the dollar, if anything at all.

Good luck in raising new funds.

there are complete, going out of business bankruptcies, and reorganization plans. This is most likely the latter.

 

[ProVobis]

there are complete, going out of business bankruptcies, and reorganization plans. This is most likely the latter.

One of the articles mentioned that this is about the 11th diocese bankruptcy since 2004 and no diocese has gone out of business yet. But some other dioceses and bishops are certainly watching this particular bk. It can have some repercussions, such as more parish mergers and other asset sales in their dioceses. The Church doesn’t want to leave bk judges running parishes now.

 

[otjm]

One of the articles mentioned that this is about the 11th diocese bankruptcy since 2004 and no diocese has gone out of business yet. But some other dioceses and bishops are certainly watching this particular bk. It can have some repercussions, such as more parish mergers and other asset sales in their dioceses. The Church doesn’t want to leave bk judges running parishes now.

My archdiocese was the first to go the bankruptcy route. I can’t speak for the diocesan level, but parish wize all is fine.

 

[ProVobis]

My archdiocese was the first to go the bankruptcy route. I can’t speak for the diocesan level, but parish wize all is fine.

Probably the same can’t be said for the former creditors of the diocese.

As was mentioned in the article, parishes maintain separate balance sheets.

 

[Brendan]

My archdiocese was the first to go the bankruptcy route. I can’t speak for the diocesan level, but parish wize all is fine.

It is standard practice in the US for each parish to incorporate individually.

This makes them legally distinct from the diocese, and their assets are not useable in any settlement with the diocese.

 

[Tarpeian_Rock]

It is standard practice in the US for each parish to incorporate individually.

This makes them legally distinct from the diocese, and their assets are not useable in any settlement with the diocese.

I’m not sure of this. In Massachusetts church property is, under the law, vested in the “Roman Catholic Bishop of (diocese name), A Corporation Sole.”

 

[ProVobis]

It is standard practice in the US for each parish to incorporate individually.

This makes them legally distinct from the diocese, and their assets are not useable in any settlement with the diocese.

Brendan, I’m not sure that’s true.

Think of a holding company. Corporations under them do incorporate individually but money does flow to and from the holding company.

In this case, the Church does own the properties and can buy or sell them. In a bk, it may be that the diocese is not in any shape to improve on its properties (parish building fixes, etc.) the same way a more healthy diocese would, if it came to that. In this case, the diocese will be run under the supervision of the courts. IOW, all assets are on the table. It is not an ideal climate to be under. One doesn’t just simply file bankruptcy expecting no repercussions.

 

[otjm]

It is standard practice in the US for each parish to incorporate individually.

This makes them legally distinct from the diocese, and their assets are not useable in any settlement with the diocese.

I am not sure we were at or before the time of filing.

 

[manualman]

startribune.com/lifestyle/288822521.html

Milwaukee’s Archbishop and now New York Cardinal Archbishop Dolan of the Diocese of New York forestalled bankruptcy by isolating and limiting diocesan sexual abuse settlement funds by creating a trust of 50+ million to service the Catholic cemeteries in the Milwaukee diocese’ purview.

This is said like it’s some sort of trick. It’s not. When people purchase a cemetery plot, it is forever. The only way that commitment can be honored is if sufficient funds are reserved so that the maintenance costs are equal to or less than the long term average return on the principle investment. You can’t exactly raise the rent on a cemetery plot!

What the lawsuit lawyers were trying to do was defraud the honest people who had bought cemetery plots out of what they paid for. Dolan did what had to be done to separate that out and honor those commitments. No foul there, just justice to those who will get what they paid for. Those people didn’t abuse anybody. Abuse victims have no right to seize their asset.

 

[ProVobis]

This is said like it’s some sort of trick. It’s not. When people purchase a cemetery plot, it is forever. The only way that commitment can be honored is if sufficient funds are reserved so that the maintenance costs are equal to or less than the long term average return on the principle investment. You can’t exactly raise the rent on a cemetery plot!

What the lawsuit lawyers were trying to do was defraud the honest people who had bought cemetery plots out of what they paid for.

Okay, but can the same case be made for those who lost memorials around the Crystal Cathedral, after they went bankrupt?

nytimes.com/2013/09/06/us/parishioners-find-removal-of-memorial-stones-an-added-indignity.html?_r=0

 

[manualman]

Okay, but can the same case be made for those who lost memorials around the Crystal Cathedral, after they went bankrupt?

You do have to draw a line somewhere. It doesn’t seem unreasonable to me to say that the care for the final resting place of human remains is a different thing than a name carved in a stone. The article said nothing about actual human remains being there, no?

It would indeed have been nice if they had offered to relocate them elsewhere, but I’m not sure it rises to the level of duty of maintaining graves.

 

[ProVobis]

You do have to draw a line somewhere. It doesn’t seem unreasonable to me to say that the care for the final resting place of human remains is a different thing than a name carved in a stone. The article said nothing about actual human remains being there, no?

It would indeed have been nice if they had offered to relocate them elsewhere, but I’m not sure it rises to the level of duty of maintaining graves.

Okay, I see what you’re saying.

Thanks.

 

[Dave_Noonan]

It is standard practice in the US for each parish to incorporate individually.

This makes them legally distinct from the diocese, and their assets are not useable in any settlement with the diocese.

Corporation Sole (everything in the diocese belongs to the Bishop) is far and away more common.