Twin Cities Archdiocese transfer of assets may protect it from bankruptcy creditors

Star Tribune

Article by: JEAN HOPFENSPERGER and JENNIFER BJORHUS , Star Tribune Updated: January 30, 2015

Local Catholic Church officials created nonprofit foundations, funds to potentially keep them out of creditors’ reach.

For decades, the Archdiocese of St. Paul and Minneapolis has been shifting money into separate nonprofits that may be beyond the reach of its creditors in bankruptcy court.

There’s the Catholic Community Foundation, created in the 1990s. The Catholic Finance Corporation, created in 2000. The Aim Higher Minnesota Foundation in 2011. The Catholic Services Appeal Foundation in 2013.

The nonprofits were created for various reasons, but they carry the potential benefit of protecting the church’s assets from liability linked to clergy abuse suits. The moves are seen as prudent by some church finance leaders, but by others as maneuvers to transfer money to where victims and their lawyers will have a harder time reaching it.

The archdiocese declined to discuss the moves.

“The archdiocese at no time has taken action to defraud any creditors,” Joe Kueppers, chancellor for civil affairs, said in a written statement.

Priests such as the Rev. Michael Tegeder say litigious times require organizations to protect themselves. “People have donated large sums of money for specific purposes,” he said. “That’s a sacred trust.”

David Clohessy, national director of Survivors Network of Those Abused by Priests, accused the archdiocese of “self-serving financial maneuvers.”

“Can anyone honestly claim that Jesus would have spent time and energy shielding assets?” asked Clohessy.

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