September 21, 2014

Judge rules Milwaukee Archdiocese funds protected

Those who are owed money in the Milwaukee Archdiocese bankruptcy case will not get their hands on $35 million in parish investment funds.

Federal Bankruptcy Judge Susan Kelley said it was “fishy” that the Catholic Archdiocese transferred the funds to other accounts back in 2005, at a time when it was being sued for sexual abuse by its priests. However, Kelley ruled Monday that the Archdiocese never owned the money, and its 200 parishes either took the funds back or invested them in good faith. As a result, Kelley said the creditors could probably not recover the $35 million.

It’s the second major victory for the Archdiocese in the bankruptcy case it filed almost two years ago. Last week, Judge Kelley said the creditors could not touch the assets of the parishes themselves.

The committee for the creditors is expected to appeal the latest ruling. The committee includes almost 575 people who claim they were sexually abused by priests in the Milwaukee Archdiocese, plus the pension and health care funds in the archdiocese.