A legal request to widen the scope of assets included in the Archdiocese of St. Paul and Minneapolis’ bankruptcy proceedings filed by survivors of clergy sexual abuse was shot down Thursday.
In an order issued in the U.S. Bankruptcy Court in Minnesota, Judge Robert J. Kressel denied the motion, which ultimately sought to consolidate the archdiocese’s assets to reflect what the survivors believe is a more accurate representation of its financial reach.
The survivors’ committee, called the official committee of unsecured creditors, alleges the archdiocese has attempted to shield many of its assets over the years to protect itself and its bank account from legal claims made by survivors.
It argues that the archdiocese has some $1.7 billion in assets — far more than the $49 million it has listed in its bankruptcy filings.
In court papers, the committee has accused the archdiocese of vastly undervaluing assets such as the Cathedral of St. Paul and tucking money away in other corporations to shield it from creditors. It’s also claimed that the archdiocese’s roughly 200 parishes should be considered part of its assets.
Archbishop Bernard Hebda has said in the past that the archdiocese was fully cooperating in the bankruptcy case and had fairly disclosed all of its assets. On Thursday, he released a statement saying He was thankful the judge was not swayed the allegations.
“The Archdiocese has fully and appropriately disclosed its assets,” the Archbishop said. “We certainly concur with Judge Kressel’s earlier comments that inflammatory allegations to the contrary are not helpful as the case moves forward. Further litigation could needlessly prolong the process and take away funds from claimants.”
Kressel outlined the rationale behind his denial in a 10-page order released Thursday.
“Even if I had the authority to substantively consolidate the debtor with non-consenting … non-debtors, the committee failed to allege sufficient facts to support substantive consolidation,” part of the order read.
Mike Finnegan, an attorney representing the survivors committee along with Jeff Anderson, called the judge’s decision disappointing and said an appeal would be forthcoming.
“It is disappointing but it’s something that we are not going to stand by and allow to happen … We think it is truly not fair what the archdiocese has been up to for years and years trying to move these assets around,” Finnegan said.
Hebda said the Archdiocese continues to stand ready to work with attorneys representing the sexual abuse claimants “to provide fair compensation as part of our Plan of Reorganization.”
The archdiocese filed for bankruptcy in January 2015 as it faced an onslaught of new abuse claims after Minnesota lawmakers opened a three-year window for claims that had previously been barred by the statute of limitations.
The Associated Press contributed to this report