Court Sees Attempt to Move Funds after Chapter 11 Filing
By Stephanie Innes
Arizona Daily Star
April 11, 2007
http://www.azstarnet.com/metro/177894
A Tucson attorney was scheduled to appear in federal court in San Diego today to defend herself against claims that her client, the Roman Catholic Diocese of San Diego, attempted to shift funds to parishes without court approval.
Susan G. Boswell is expected to appear before bankruptcy Judge Louise DeCarl Adler at 2 p.m., along with lawyers for the San Diego Diocese's parishes and its newly formed Organization of Parishes, according to a court order.
 |
| Susan Boswell is set to appear in San Diego. |
Boswell also represented the Roman Catholic Diocese of Tucson during its bankruptcy proceedings.
Adler said Boswell must appear to "show cause why you should not be cited for contempt of court."
Boswell, who is the Diocese of San Diego's lead bankruptcy attorney, was unavailable for comment Tuesday.
The judge's order says the Organization of Parishes encouraged parishes to get new taxpayer identification numbers to transfer parish money that the diocese had been holding for them.
The order also says it appears that officials with the San Diego Diocese and Boswell "conspired" with parishes to transfer the funds after the diocese filed for Chapter 11 bankruptcy protection.
The San Diego Diocese on Feb. 27 became the fifth diocese in the U.S. to file for Chapter 11 bankruptcy protection in the face of potentially expensive litigation over allegations of sexual abuse by clergy members.
In addition to the Tucson Diocese, the others that filed for bankruptcy were the Archdiocese of Portland, Ore.; the Diocese of Spokane, Wash.; and the Diocese of Davenport, Iowa.
Tucson's was the second diocese in the nation to seek Chapter 11 protection in September 2004, and it the first in the nation to emerge from bankruptcy one year later.
In the Tucson case, plaintiff attorneys Lynne M. Cadigan and Kim E. Williamson had filed a lawsuit accusing the local diocese of improperly transferring property before the bankruptcy filing by, among other things, selling its Downtown headquarters to the separately incorporated Catholic Foundation for the Diocese of Tucson for $1.63 million.
The diocese denied the property sale was improper, and the lawsuit later was dismissed as part of the bankruptcy settlement.
The local diocese also sold more than $5 million in property to put into the settlement pool.
The stakes are much higher in San Diego, where the diocese has nearly 1 million parishioners, assets of more than $100 million and liabilities topping $100 million, according to its bankruptcy filing.
In comparison, the 350,000-member Tucson Diocese's Chapter 11 filing listed $16.6 million in assets and said it owed $20.7 million to creditors.
• Contact reporter Stephanie Innes at 573-4134 or at sinnes@azstarnet.com.
Any original material on these pages is copyright © BishopAccountability.org 2004. Reproduce freely with attribution.