BALTIMORE (MD)
The Daily Record [Baltimore MD]
August 21, 2025
By Ian Round
Key Takeaways:
- Survivors’ committee seeks recovery of $1M in payments before bankruptcy.
- Motion for derivative standing filed against Baltimore Archdiocese.
- Nearly 1,000 child sex abuse claims linked to bankruptcy case.
- Charitable immunity trial set for December to determine liability.
The committee representing abuse victims in the Roman Catholic Archdiocese of Baltimore’s bankruptcy case has moved to recover more than $1 million in “avoidable” payments made by the archdiocese in the three months before it declared bankruptcy in 2023.
The Official Committee of Unsecured Creditors on Aug. 18 filed a motion for derivative standing to force the return of allegedly unnecessary payments the archdiocese made while it was “at acute risk of insolvency” and knew it would file for bankruptcy before the Maryland Child Victims Act took effect.
The survivors’ committee says the money, which it estimates at “more than $1,014,539.70,” should be part of an eventual global settlement through which victims would be compensated. Nearly 1,000 people have filed claims.
Creditors in bankruptcy cases may seek what is known as “derivative standing” when the debtor is unwilling or unable to assert claims on the creditors’ behalf, known as “avoidance actions.”
“The Debtor has left the Committee with no other choice,” the committee’s lawyers wrote, saying the archdiocese didn’t provide sufficient evidence to justify its refusal to pursue recovery of the funds.
The action by the survivors’ committee follows months of debate with the church’s lawyers over a list of “plausibly avoidable” payments made in the 90 days before the bankruptcy case began.
Monday’s filing was accompanied by complaints against the United States Conference of Catholic Bishops, the Commissariat of the Holy Land for the United States of America, the Maryland Catholic Conference, St. Mary’s Seminary and University, and Ayers Saint Gross Architecture.
According to emails attached to the filing, the archdiocese’s lawyers argued the organization was a “mere conduit” for the transfers, and the transfers were made in the “ordinary course of business.” They said none of the payments qualified as “fraudulent.”
“We respectfully dispute the claim and affirm that we have complied with all requirements of the bankruptcy process,” archdiocese spokesman Christian Kendzierski wrote in an email to The Daily Record.
The committee argues the benefit of pursuing the avoidance actions, even to trial, significantly outweighs the cost.
“The Avoidance Actions are the only mechanism by which to recover over one million dollars that the Debtor placed beyond the reach of its creditors in the days preceding the Petition Date,” the motion states.
Meanwhile, the archdiocese and victims are at an impasse over the church’s claim of “charitable immunity.” The archdiocese argues that the global settlement should be paid by its insurance companies, rather than from the archdiocese’s own accounts. The theory holds that donors to charities expect their money to go toward the organization’s mission, rather than toward litigation.
A trial over the charitable immunity claim is scheduled for December.
A local lawyer for the survivors’ committee referred a request for comment to two Minneapolis-based colleagues from the firm Stinson, who didn’t answer calls or emails.
“Here, the Debtor obviously feels uncomfortable admitting that transfers were imprudently made at a time when the Debtor was acutely aware of the mounting wave of child sex abuse claims that would lead to this chapter 11 case,” the motion states.
“Likewise, the Debtor is likely concerned about litigating against the Proposed Defendants, many of whom are affiliated with the Archdiocese and the Catholic Church. But, the Debtor elected to put aside that discomfort and concern when it invoked the protection of the Bankruptcy Code.”