Appeals Court Overturns Ruling on Milwaukee Catholic Cemetery Trust

By Tom Corrigan
Wall Street Journal
March 9, 2015

http://www.wsj.com/articles/appeals-court-overturns-ruling-on-milwaukee-catholic-cemetery-trust-1425949192

Hundreds of people who claim they were sexually abused as children by Roman Catholic clergy members won a major victory against the Archdiocese of Milwaukee on Monday when a federal appeals court struck down a lower court’s decision to shield a $55 million trust from their claims.

The U.S. Court of Appeals for the Seventh Circuit found that a trust created to maintain the archdiocese’s cemeteries must be made available to the alleged abuse victims and other creditors, potentially freeing up a major funding source in a contentious Chapter 11 bankruptcy case that has stretched out over more than four years.

The archdiocese had argued using the funds to compensate victims would violate its constitutionally protected free exercise of religion. Monday’s ruling is a victory for the more than 500 abuse victims who challenged the archdiocese’s stance.

“I’m very pleased with the result,” said James Stang, a lawyer with Pachulski Stang Ziehl & Jones LLP who has represented victims in all but two of the diocesan bankruptcies to date. “This decision has great significance for the case and also for all litigation in federal court regarding religious entities.”