A judge in the Catholic Archdiocese of Milwaukee's bankruptcy case has ruled that 210 Milwaukee parishes are separate entities from the diocese, a decision that keeps parish assets out of the diocese's chapter 11 case and out of reach of the claimants in the case, including victims of sexual abuse, Dow Jones DBR Small Cap reported yesterday. The unsecured creditors' committee had asked Judge Susan Kelley to lump parish assets into the diocese's bankruptcy estate, but Judge Kelley denied the request in a ruling filed Friday with the U.S. Bankruptcy Court in Milwaukee. "The committee has failed to state a colorable claim for substantive consolidation," Judge Kelley said in her order. Calling a potential consolidation "wholly improper," Judge Kelley added that the committee hadn't proven that the diocese has any kind of complete domination over the parishes or that the affairs of the diocese and the parishes are so entangled that consolidation is necessary. She also said that the committee failed to prove that the benefit to creditors would outweigh the significant harm consolidation would cause the parishes. The committee said that unless it's allowed to try to claw back these funds, there will be little available to the 575 survivors of sexual abuse who have filed proofs of claim.
