St. Paul Archdiocese parishes concerned about bankruptcy

By Jean Hopfensperger And Tony Kennedy
Star Tribune
January 18, 2015

http://www.startribune.com/local/stpaul/288939541.html

Like many other Catholics on Friday, Jennifer Hildebrand of St. Paul prayed during noon mass at St. Olaf Catholic Church in Minneapolis.

Catholic parishes take steps to limit impact from archdiocese’s bankruptcy in wake of clergy abuse.

Twin Cities Catholics going to mass this weekend saw something waiting for them along with the bulletins and hymnals — fliers explaining their church’s bankruptcy.

The incongruous fact sheets were a stark outline of the reckoning that has come to the spiritual home of 850,000 Minnesota Catholics after decades of sexual abuse by priests, a scandal that has rocked the faith of some believers and the patience of all.

Reflective and questioning, those coming to mass were still coming to terms with a step that their archbishop said Friday had been made necessary by the damage done to victims and to the church.

Some believers, like Amy Holtan of Maple Grove, kept the news firmly within the framework of their faith.

“We have sinners who lead the church: We’re all sinners,” said Holtan, who attended St. Olaf Catholic Church in downtown Minneapolis shortly after the bankruptcy announcement. “But where sin abounds, grace abounds all the more. God is in the midst of this.”

Other Catholics, like Mary Schrankler of Woodbury, aren’t planning to set foot in a church anytime soon.

“We need to understand better why this decision was made now,” Schrankler said. “Was it in the best interest of the people abused, or in the best interest of the archdiocese?”

A retired school principal, Schrankler said she has been sickened by abuse “committed against vulnerable children who will be affected the rest of their lives.”

If Catholics were united in their grief, they also were united in asking what will come next.

Within the individual parishes that make up the 12-county archdiocese, some fear that their financial futures are at risk and are moving to protect themselves.

About 50 parishes, roughly one-quarter of the total within the archdiocese, have already signed on for representation with Mary Jo Jensen-Carter, a White Bear Lake bankruptcy attorney who met with dozens of them in December.

Other parishes are hiring their own attorneys or weighing the option to join the larger group.

“Many parishes have said, ‘We need a seat at the table so that we can protect our money,’ ” said Don Grant, acting parish administrator at St. Olaf.

Parishes are wary

Archbishop John Nienstedt said Friday that parishes would not be affected by the bankruptcy, filed as the archdiocese faces 20 clergy abuse lawsuits and more than another 100 still pending.

Reality could prove more complex.

Individual parishes typically have not been sued in the 11 other bankruptcies filed by Catholic dioceses or archdioceses since 2004, said attorney Mike Finnegan of the St. Paul law firm headed by victim’s attorney Jeff Anderson.

However, some parishes have been sued in bankruptcies in Wilmington, Del., and San Diego, Finnegan said. In both cases, the parishes had employed priests who abused the children, he said, and also had insurance coverage.

While Anderson said Friday he did not intend to disrupt “the core mission” of the church, he emphasized that the archdiocese carries “a lot’’ of insurance, indicating an secondary line of attack in seeking to get money for abuse victims.

The two priests who began the movement within Twin Cities parishes to collectively hire Jensen-Carter oversaw parishes that, like those in Wilmington and San Diego, employed men identified as child sex abusers: Our Lady of Grace in Edina and St. Elizabeth Ann Seton Church of Hastings.

Denny Farrell, parish administrator at Guardian Angels of Oakdale, said the parish has hired its own bankruptcy attorney, even though it hasn’t employed any priests found to have been credibly accused.

“It’s just to make sure we are doing everything we can to protect Guardian Angels now,” Farrell said.

The parish owns 23 acres of land, including a cemetery, and its leaders have a carefully planned communication strategy to discuss the bankruptcy with its members, Farrell said.

He said Guardian Angels is lucky that it doesn’t owe the archdiocese any money right now. He said there are a number of parishes in arrears on regular assessments from the archdiocese and that those debts might be called in to help solve the cash crunch in St. Paul.

St. Olaf has been assured that its assets, which include three-quarters of a block of high-priced real estate in the downtown Minneapolis business core, will be shielded from the bankruptcy because it is a separate legal entity from the archdiocese, Grant said. But there’s still a sliver of uncertainty.

For instance, would a bankruptcy judge force St. Olaf to take out a mortgage on its downtown real estate, which it owns outright, to raise cash to cover liabilities for the archdiocese?

Although Grant said he doesn’t think that’s a possibility, St. Olaf wants to be counseled by a professional so that it is prepared.

Loan funds at risk

Parishes face another indirect threat that could prove damaging.

Money they deposited in the archdiocese’s inter-parish loan fund — an account that’s been used to help parishes short of cash — could be at risk. The Church of St. Anne-St. Joseph Hien in Minneapolis, for example, had $496,459 in the fund, according to bankruptcy documents.

The Rev. Mike Tegeder said he’s contacted the archdiocese about the status of the $50,000 deposited in the fund by his church — St. Frances Cabrini in Minneapolis.

“My understanding is that we will lose it,” he said. “But there’s still a lot of questions out there.’’

Churches are trying other strategies. The Church of the Presentation of the Blessed Virgin Mary in Maplewood created a Legacy Foundation in 2013, the same year the Legislature passed the Minnesota Child Victims Act, which opened a three-year window allowing sex abuse cases that were otherwise barred by the statute of limitations to go to court. The law change sparked the unprecedented explosion of abuse lawsuits.

“Having the endowment held by a separate institution, the funds should be protected from any possible litigation or action of creditors against the parish, and are also protected against possible misuse by future parish leaders to solve short-term financial problems,” the church’s website says.

The foundation’s chairman, Jim Miettunen, declined to provide further details of why the foundation was created.

The archdiocese did much the same last year, when it created the Catholic Services Appeal Foundation to safeguard parishioner’s donations made during its annual Catholic appeal. Last year, Catholics donated more than $9 million to the nonprofit foundation, which is a separate legal entity. Nienstedt on Friday cited it as an example of the continuing support coming from the pews.

The archbishop also encouraged Catholics to continue contributing to their church.

For many Catholics, however, their questions will only be answered by the course of the archdiocese’s bankruptcy proceedings and the final outcome of what has become a long crisis for their church.

Schranker has stopped donating to her church. She hopes to return to church someday, but now worries that her friends who are retired Catholic schoolteachers will lose their pensions.

“You develop a mistrust of religion,’’ she said.