MINNESOTA
Canonical Consultation
Jennifer Haselberger
05/23/2016
Yesterday, I signed an affidavit in support of substantive consolidation in the bankruptcy case involving the Archdiocese of Saint Paul and Minneapolis. Substantive consolidation is an equitable remedy available to bankruptcy courts whereby the assets of entities closely related to the debtor, in this case the Archdiocese of Saint Paul and Minneapolis, are combined into the bankruptcy estate.
At the heart of a motion for substantive consolidation is the question of equity and fairness. American law does not allow a corporation like the Archdiocese of Saint Paul and Minneapolis to misuse the benefits of the separate corporate forms of, say, parishes or foundations, to unfairly deprive creditors like the victims of sexual abuse by clergy. In other words, the test for whether substantive consolidation is appropriate in a given case is determined by the degree of interrelatedness between the entities to be consolidated and the parent organization.
I was hired as an expert witness in this case, to offer my opinion as to whether the legal standards and factual predicates for substantive consolidation exist. The payment I have received is a $2000 retainer, which is the standard retainer I require for my services.
I support the motion for substantive consolidation in this case for four primary reasons.
1) The request to consolidate does not include Catholic Charities or Commonbond Communities. This means that those organizations are not impacted by this motion, and they will continue to provide the charitable and compassionate care upon which their much-deserved reputations are based.
2) The request seeks to make more assets available to compensate the victims of sexual abuse of minors by clergy. Two years ago I proposed a means of promoting reconciliation and reparation for victims, and at that time I noted that organizations like the Catholic Community Foundation were established as a way to insulate funds belonging or donated to the Archdiocese from potential legal judgments and settlements. At that time the website of the Catholic Community Foundation stated that it was founded to support the ‘spiritual, educational and social needs of our Catholic community.’ I asked then, as I ask now, if making reparation towards those who have been harmed in such unspeakable ways by our clergy is not also a spiritual and social need of this Catholic community. I believe we cannot turn a blind eye to the harm and suffering experienced by those individuals, most of whom are or were members of our Catholic community, to preserve advantages for others.
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