MONTANA
National Catholic Reporter
Dan Morris-Young | Apr. 3, 2017
Are parish assets immune from liquidation?
That was a dominant question among those that pastors and others posed to Great Falls-Billings Bishop Michael Warfel leading up to the Montana diocese’s March 31 filing for Chapter 11 bankruptcy protection, brought on by financial pressures from sex abuse lawsuits.
The diocese embraces the concept that parish assets are held “in trust,” Warfel told NCR March 31, but attorneys for the currently 72 claimants caution otherwise.
“It is my understanding that the diocese will assert that some of its real estate holdings, investments and cash assets are held ‘in trust’ for the benefit of parishes, and are thus not available to fund a settlement or jury verdict should any case proceed to trial,” Bryan Smith, an attorney representing nearly half of current plaintiffs, told NCR in an email.
“However, there does not appear to be any evidence that the parishes are separately incorporated. If the cases do not resolve in mediation, the issue of which assets are reachable in bankruptcy could be the subject of litigation,” said Smith, who works for the Tamaki Law firm, which is based in Washington state.
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