Dioceses come under scrutiny as they change legal structures


January 23, 2020

By Jack Lyons

South Bend IN – As dioceses across the country continue to face multi-million dollar payouts related to clerical sex abuse, some bishops have relied on advice from lawyers to reconfigure the property of their dioceses into charitable trusts.

The practice – which has been implemented by several dioceses after the clerical sex abuse revelations of the early 2000s – creates significantly different outcomes for dioceses and abuse victims in the case of bankruptcies.

Critics say the moves shield assets that could be paid to victims of clerical abuse and may even be illegal. However, Church officials defend the practice, saying their actions were intended to better align the dioceses’ corporate status with canon law. Other dioceses say they acted to ensure the long-term viability of the Church.

In the Archdiocese of St. Paul and Minneapolis’s bankruptcy, which was resolved in 2016, the archdiocese calculated its assets at $45 million, while advocates for abuse victims argued that other church entities brought the sum up to $1.7 billion. That means individual victims could receive tens of thousands of dollars more in a bankruptcy settlement depending on how courts define the assets of the archdiocese.

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