The rest at Appleton Post CrescentAPPLETON — The Roman Catholic Diocese of Green Bay, facing civil lawsuits tied to sex abuse by a former priest, could follow the Archdiocese of Milwaukee's lead and file for bankruptcy protection to inoculate itself from bank-breaking damages.
But the strategy is fraught with risks and could backfire, possibly inflicting a catastrophic toll on Catholic parishes, schools and hospitals throughout the Fox Valley.
This week the Archdiocese of Milwaukee joined at least seven other U.S. Catholic dioceses in seeking Chapter 11 bankruptcy protection amid fraud lawsuits fueled by sex abuse cover-ups.
At that time, Green Bay Bishop David Ricken said in a written statement that he was "deeply saddened" by the archdiocese's announcement. The Green Bay diocese would not comment further on this issue this week.
The goal is to keep the archdiocese running and also compensate current and future sex abuse claimants. But if the archdiocese and claimants aren't able to agree on a bankruptcy settlement, a subsequent bankruptcy trial could pull in other Catholic organizations.
"If you push this and litigate, there's obviously some risk that the court could rule against some of the parishes or some of the other related entities and drag more assets into the bankruptcy estate in a way that would have long-term consequences," said Stephen Lubben, a professor at Seton Hall Law School in New Jersey and bankruptcy expert.
"It's usually best to try to work out some sort of reasonable settlement."
Bankruptcy trials can be particularly unfavorable to dioceses because it's often unclear what property the diocese owns and which assets it has spun off. For example, if a diocese isn't sufficiently independent from a local Catholic Charities organization, the two could be lumped together in a court judgment.
Don't worry folks, the Catholic colleges of Wisconsin are safe. Nobody will confuse them with actual Catholic institutions.
No comments:
Post a Comment