MILWAUKEE (WI)
Forbes
Jay Adkisson, Contributor
New documents that have recently come to in the Catholic Church sexual abuse scandal show that in 2007, the Catholic Church transferred $57 million into a trust fund “to protect it against court action”, according to an NPR Article at http://goo.gl/05N4b
In 2011, the Milwaukee Archdiocese filed its Petition for Chapter 11 protection in bankruptcy, and the judge overseeing the case ordered the documents revealing this transfer to be released for the first time.
According to the NPR Article:
One document is a letter that Dolan sent to the Vatican in June 2007 requesting permission to move $57 million into a cemetery trust fund in order to protect the funds from “any legal claim and liability.” The Vatican approved the transfer a month later, according to the documents.
During a news conference on Monday, Jeff Anderson, an attorney representing more than 500 abuse victims, said the money was to be used to “pay off some of the offenders to quietly go away.”
Dolan disagreed with the characterization of the fund in a statement released on Monday. He said it was a “perpetual care fund” from for cemeteries, not an attempt to shield money from bankruptcy.
Under Wisconsin law, Chapter 893.425, the Statute of Limitations for a fraudulent transfer is either four years from the date of the transfer, or one year after the transfer “could reasonably have been discovered by the claimant.”
Assuming that the Statute of Limitations has not run on the 2007 transfer because it just became known to claimants, this transfer would appear to be voidable as a fraudulent transfer on several grounds.
Gifts to trusts are inherently without “reasonably equivalent value”, meaning that the debtor did not get anything back that would be of any utility to creditors. If the Milwaukee Archdiocese was insolvent at the time that it made the transfer, or the transfer rendered it insolvent, then the transfer would be considered a fraudulent transfer without regard to the Church’s intent in making the transfer.
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