MINNESOTA
Star Tribune
Article by: JENNIFER BJORHUS , Star Tribune Updated: January 16, 2015
Q: What is a Chapter 11 bankruptcy?
A: It’s a form of bankruptcy protection in which the organization does not liquidate but reorganizes while continuing to operate under the court’s supervision.
Q: Why did it file?
A: The Archdiocese of St. Paul and Minneapolis faces more than 20 lawsuits and says the total claims would likely outstrip the $5.3 million it has set aside to compensate victims.
Q: How many dioceses have filed for bankruptcy?
A: At least 11 Catholic dioceses in the United States have filed for bankruptcy since 2004.
Q: How long have they stayed in bankruptcy?
A: From one to about five years.
Q: How does an archdiocese bankruptcy differ from a business bankruptcy?
A: They are very similar. Secured creditors, such as mortgage holders on the diocese’s real estate, will be paid first. Priority creditors, such as the IRS, come next. Victims, who are unsecured creditors, are paid next and would be likely be divided into classes. The plan can treat each class differently.
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