Multiple issues still await resolution in complex church bankruptcy

MILWAUKEE (WI)
Milwaukee Journal Sentinel

By Annysa Johnson of the Journal Sentinel July 17, 2013

Following the recent release of documents on the Catholic Archdiocese of Milwaukee’s handling of sex abuse cases, the local church’s immensely complex 3-year-old bankruptcy case is now poised to resume playing out at three levels of the federal court system.

At the heart of the case are three key questions: Did the archdiocese defraud victims by exposing them to sexually abusive priests, teachers and others without warning them? Just who, among the 575 creditors who allege they were assaulted over the years, is entitled to compensation? And, what church assets, including insurance coverage, can and should be made available to pay them?

The legal debates over these and other issues have filled thousands of pages in federal court filings and already cost the archdiocese millions. And any decision can alter the balance of power between the archdiocese and creditors, pushing them toward a possible settlement or back to their trenches — or setting up a new round of appeals that can drag on for months.

There are all these moving parts,” said Ralph Anzivino, who teaches bankruptcy law at Marquette University. “And unfortunately, it’s a slow process to finally get them to stop moving.”

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