BishopAccountability.org
	Diocesan Bankruptcy Trustee Goes after Pre-Filing Payments By Ann McGlynn Quad-City Times October 10, 2008 http://www.qctimes.com/articles/2008/10/10/news/local/doc48f0123f012dd800983555.txt?sPos=3 The trustee who oversees the $37 million Diocese of Davenport bankruptcy settlement is going after payments the diocese made in the months leading up to its filing in October 2006, documents show. The payments include nearly $20,000 for prepayment of a funeral for retired Bishop William Franklin, more than $100,000 in tuition payments made on behalf of men studying to become priests, at least $135,800 paid to the U.S. Conference of Catholic Bishops and nearly $73,000 to the liaison between the Vatican and the Catholic Church of the United States, among others. Other payments include more than $12,200 for a new computer system and more than $73,000 to the Diocese of Peoria for reimbursement of expenses for a newly ordained priest. Robert Berger, trustee, filed the actions in U.S. Bankruptcy Court late this week. Attorneys for Berger could not be reached for comment. The payments under contention total at least $474,949, plus interest. Berger also filed documents indicating he is working with three organizations — Renew International, the Institute for Priestly Formation and the Iowa Catholic Conference — to determine whether payments they received are subject to forfeiture. "Avoidance complaints are a normal part of the bankruptcy process," said Richard Davidson, attorney for the diocese. "As part of the settlement, the diocese assigned the avoidance actions to the settlement trustee. The diocese is not involved in the avoidance actions other than to provide documentation that may be necessary for these cases." The payments, Davidson said, were disclosed to the court during the bankruptcy case. The "vast majority" were special collections that the parishes took for charitable organizations. Others were dues payable by the diocese, he said. Recovering the payments is a "normal" part of bankruptcy and "it does not mean that there was anything wrong, underhanded or fraudulent with the making of any particular payments, but rather that the payment is 'avoidable' under some very arcane bankruptcy concepts that are difficult for even sophisticated business people to understand," he added. Mike Uhde, co-chairman of the committee representing the sex abuse claimants in bankruptcy, said: "Please let the record show that we were not the first to use the terms wrong, underhanded or fraudulent. As the filings indicate, there was some very, let's say to be kind, curious transfers of funds by the diocese to other parties just prior to their bankruptcy filing." Uhde continued: "We do not consider recovery of assets due the victims an arcane concept. And even though we may not be sophisticated business people, we find it is very easy to understand just what happened here. All one needs to do is look at the numbers and facts contained in the recent filings by the settlement trustee. Shame on them for trying to hide the funds due to the victims and shame on them for trying to deny they did it." Any recovery of payments will mean more money for the sex abuse survivors who filed claims in bankruptcy court, as will the sale of the diocesan headquarters, which was valued at $3.9 million as part of the $37 million settlement. The first checks to the claimants are expected to arrive in November. The Davenport diocese filed for bankruptcy in October 2006 after it lost its first civil sex abuse trial. The diocese, its insurance company and the creditors committee agreed to a $37 million settlement, with the stipulation that all Catholic entities in the diocese will be released from liability just as the diocese is. Diocese payments in question U.S. Conference of Catholic Bishops: $135,798.41 (at least) University of St. Mary of the Lake, Mundelein Seminary: $119,299.75 Diocese of Peoria: $73,337 Archbishop Pietro Sambi, in his capacity as Apostolic Nuncio: $72,906.45 (at least) Quad-City Bank & Trust: $21,277.35 Conception Seminary College: $20,654 Halligan-McCabe-DeVries Funeral Home: $19,984.45 R.K. Dixon Co., also known as Command Business Systems: $13,691.61 Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com.
Any original material on these pages is copyright © BishopAccountability.org 2004. Reproduce freely with attribution.