Judge Decides in Favor of Archdiocese over Appeal Fees in Bankruptcy

by San Antonio Attorney

U.S. Bankruptcy Court Judge Robert Kressel decided in favor of Archdiocese of St. Paul and Minneapolis over claims of responsibility for paying around $355,000 in legal expenses incurred by a group of unsecured creditors seeking to combine parish, foundation and schools assets into the bankruptcy estate of the archdiocese.

A previous ruling, in which Judge Kressel’s decided that institutions  like schools, churches and charitable organizations cannot be forced to file bankruptcy, was affirmed by the Federal District Court in response to the appeal filed by the Unsecured Creditors Committee, which consists of over 400 sexual abuse claimants.

In addition, the judge on Dec. 8 that professional fee incurred by lawyers, appraisers, accountants and others could be paid through the archdiocese’s normal operating account. The outstanding $2 million for lawyers’ and professional fees for the Parish Committee, Unsecured Creditors Committee and archdiocese are going to be paid after the court approves a reorganization plan. Moving forward, all costs for professional fees are going to be paid after a plan is confirmed, the judge said.

A hearing for disclosure statement arguments connected to reorganization plans was scheduled on Dec. 15. On Dec. 8, the archdiocese revealed that it intends to revise its plan to give above $155 million to the claimants after agreeing with all of its insurance providers.

Furthermore, Judge Kressel denied a request to postpone the schedule of plan confirmation until after the church reaches an agreement with insurance carriers.

Debtors are allowed to exempt certain assets so that they can make a fresh start after the bankruptcy. To find out what assets or property are protected in bankruptcy, speak to a local San Antonio Bankruptcy lawyer.

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