A federal judge has ruled that the parishes of the Catholic Archdiocese of Milwaukee will not be included in its bankruptcy proceedings, the Associated Press reported today. The archdiocese is facing more than a dozen civil lawsuits over how it handled clergy sex abuse cases and filed for bankruptcy last January. Attorneys for creditors argue that more than 200 parishes should be included in the archdiocese bankruptcy, alleging that the archdiocese fraudulently transferred assets to protect it from sex abuse claims. The parishes could still face separate lawsuits over more than $35 million in parish investment funds that the archdiocese moved off its books in 2005. U.S. Bankruptcy Judge Susan Kelley (E.D. Wis.) could decide as early as today whether to allow creditors to sue to recover some of that money.
