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Bankruptcy court rules Milwaukee parish assets not included in settlement

Catholic World News - December 07, 2012

A federal bankruptcy-court judge in Wisconsin has ruled that creditors of the Milwaukee archdiocese cannot tap into the assets of over 200 individual parishes.

Rejecting an argument by lawyers for sex-abuse victims, Judge Susan Kelley ruled that individual parishes are distinct legal corporations. Creditors can only divide up the legal assets of the archdiocese itself, the judge said.

Victims’ lawyers continue to argue that the archdiocese improperly transferred funds to a trust fund for parishes, in order to shield those assets from bankruptcy proceedings. A lawyer for the archdiocese dismisses that claim as “ridiculous.” Judge Kelley will rule separately on that argument.

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