Abuse Victims Say MN Church Is Hiding Assets

By Lorraine Bailey
Courthouse News Service
May 25, 2016

http://www.courthousenews.com/2016/05/25/abuse-victims-say-mn-church-is-hiding-assets.htm

Attorneys representing more than 400 victims of clergy sexual abuse say the Minnesota Catholic archdiocese's bankruptcy reorganization plan undervalues its assets by about $1 billion.
     In 2013, Minnesota passed the Minnesota Child Victims Act, creating a temporary window in the civil statute of limitations to allow child sex abuse victims to come forward with their claims, even if the abuse happened a long time ago.
     That window closed Wednesday. More than 850 child sex abuse claims have been filed in the past three years, including about 500 against Minnesota Catholic clergy, according to a Star Tribune report.
     The huge number of claims has led the Minnesota archdiocese to declare bankruptcy.
     But victims are concerned that the archdiocese wants to shield its money through reorganization, by transferring money to trusts and corporation that it claims no control over.
     "Within the next few days, the debtor will file a plan of reorganization that (i) seeks to prohibit more than four hundred survivors of clergy sexual abuse from reaching any of the assets that the debtor alienated as a matter of civil law, but (ii) simultaneously provides more than 200 entities holding such assets with a complete and final release of liability for sexual abuse claims," the victims claim in a Monday filing in federal bankruptcy court Tuesday.
     "Confirming a plan that extends the full benefits of bankruptcy to hundreds of entities without requiring them to disclose their assets or contribute appropriately to the payment of creditor claims would constitute nothing short of a miscarriage of justice and a grave misuse of the bankruptcy process," states a memo accompanying the motion to consolidate the archdiocese's estate with parishes and other entities.
     The victims estimate that the archdiocese and its parishes, along with some of its schools and cemeteries, are worth approximately $1.7 billion — far more than the figure of $45 million the archdiocese cited in prior court documents.
     The discrepancy is partially accounted for by differing estimates of the value of church real estate, its interests in religious schools, and revenues from Catholic cemeteries.
     Sex abuse victims asked the court to consolidate the archdiocese, parishes, schools, charities, and other entities, arguing in its lengthy 100-page filing that the archdiocese exercises complete control over the parishes, so their finances should be considered together.
     Archbishop Bernard Hebda told reporters Tuesday afternoon, "Let me be extremely clear: The archdiocese has disclosed all of its assets. And has followed all of the rules set forth by the court. And all directives from the judge."
     The victims are represented by Robert T. Kugler with Stinson, Leonard, Street LLP in Minneapolis.