MILWAUKEE (WSAU) Over 200 Catholic parishes in southeast Wisconsin breathed a huge sigh of relief yesterday. Federal Bankruptcy Judge Susan Kelley said the parishes will not put all of their assets at risk, as she decides how much the Milwaukee Archdiocese must pay to sex abuse victims and other creditors in its nearly two-year-old bankruptcy case.
Kelley ruled that the parishes are their own legal entities – but they’re not out of the woods just yet. The parishes could still be sued, as the creditors try to obtain $35-million the local churches obtained from the archdiocese in 2005. The creditors say the archdiocese committed fraud by taking the money off its books, to reduce its future legal liabilities related to the nationwide sex abuse scandal by Catholic priests. Archdiocese attorney Frank LoCoco calls the creditors’ allegation “ridiculous.”
Judge Kelley could decide as early as today whether the creditors can sue for at least part of the transferred money. LoCoco says those lawsuits could drag on for years – and it would destroy parishes and make it impossible for the archdiocese to continue its local ministries. Most of the creditors in the Milwaukee bankruptcy case are about 575 victims of sexual abuse by priests in the archdiocese over the past several decades.