Judges at the Seventh Circuit Court of Appeals yesterday appeared to challenge a key argument in the Archdiocese of Milwaukee's efforts to protect $60 million it holds in a trust for the care of cemeteries from being used to pay creditors in its bankruptcy, the Milwaukee Journal Sentinel reported today. The three-judge panel questioned whether the archdiocese needs that entire $60 million to maintain its cemeteries. And one of the jurists, Seventh Circuit Judge Ann Claire Williams, said she found issues related to U.S. District Judge Rudolph T. Randa's decision not to recuse himself from the lawsuit over those funds "troubling." The panel — Appellate Judges Williams and Joel Flaum, along with U.S. District Judge Robert Dow of the Northern District of Illinois — heard oral arguments Monday on several issues related to the bankruptcy, including First Amendment questions that could be of national significance as religious liberty cases make their way through courts around the country. In that lawsuit, filed by Archbishop Jerome Listecki as sole trustee of the cemetery trust, the church maintains that forcing it to turn over even $1 in cemetery funds to the bankruptcy estate would substantially burden its free exercise of religion under the First Amendment and the federal Religious Freedom Restoration Act. Proceeds from the estate would go to finance a settlement with sex abuse victims and the archdiocese's reorganization.
