Archdiocese of Milwaukee Files For Bankruptcy As a Result of Abuse Litigation

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On Tuesday, the Archdiocese of Milwaukee, Wisconsin became the latest in a string of Catholic Dioceses to file for chapter 11 protection as a result of costs associated with clergy abuse litigation. The Milwaukee Archdiocese was established in 1843 as a diocese (elevated to an archdiocese in 1875 by Pope Pius IX) and serves over 650,000 registered Catholics in its 4,750 square mile region. The Archdiocese also provides services to 210 parishes, 114 elementary and middle schools, 13 high schools, five colleges and nine hospitals located in its region. It employs over 175 people and has an annual operating budget of $24 million.

Court filings assert that this bankruptcy is unique from other earlier-filed diocesan bankruptcies because of the legal organization of the parishes in the area. In earlier cases for Catholic dioceses in Spokane, Tuscon, Portland, San Diego and Fairbanks, the parishes were unincorporated associations existing as part of the diocese's civil corporation (meaning that the diocese held title to all of the parishes' property), which created a "central issue" in the bankruptcy cases of "whether property of the parishes was included within the diocese's bankruptcy estate." Court filings claim, in contrast, that the Milwaukee Archdiocese "does not hold title to any of the property" of parishes within its region. The parishes have not filed for bankruptcy protection.

The Archdiocese had incurred almost $30 million in "cumulative financial impact . . . for abuse of minors by a diocesan priest or deacon" as of June 30, 2010. Those costs have been funded to date by selling property, using interest and investment income, liquidating investments, and through a loan obtained from the landlord of the Archdiocese's main offices. As of the bankruptcy filing, the Archdiocese remains a defendant in 12 lawsuits brought by a total of 17 claimants and has also received a demand from attorneys for seven additional individuals. The Archdiocese participated in mediation with regard to the existing lawsuits, but that mediation concluded in the middle of November and was unsuccessful in reaching a settlement.

Key court filings are listed in the attached document. For access to all major pleadings filed in this case, please visit

http://www.chapter11cases.com/Archdiocese-of-Milwaukee_c_16718.html

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Consumer Protection Updates, Health Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Randall Reese, Restructuring Concepts LLC | Attorney Advertising

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