Yesterday, I signed an affidavit in support of substantive consolidation in the bankruptcy case involving the Archdiocese of Saint Paul and Minneapolis. Substantive consolidation is an equitable remedy available to bankruptcy courts whereby the assets of entities closely related to the debtor, in this case the Archdiocese of Saint Paul and Minneapolis, are combined into the bankruptcy estate.

At the heart of a motion for substantive consolidation is the question of equity and fairness. American law does not allow a corporation like the Archdiocese of Saint Paul and Minneapolis to misuse the benefits of the separate corporate forms of, say, parishes or foundations, to unfairly deprive creditors like the victims of sexual abuse by clergy. In other words, the test for whether substantive consolidation is appropriate in a given case is determined by the degree of interrelatedness between the entities to be consolidated and the parent organization.

I was hired as an expert witness in this case, to offer my opinion as to whether the legal standards and factual predicates for substantive consolidation exist. The payment I have received is a $2000 retainer, which is the standard retainer I require for my services.

I support the motion for substantive consolidation in this case for four primary reasons.

1)      The request to consolidate does not include Catholic Charities or Commonbond Communities. This means that those organizations are not impacted by this motion, and they will continue to provide the charitable and compassionate care upon which their much-deserved reputations are based.

2)      The request seeks to make more assets available to compensate the victims of sexual abuse of minors by clergy. Two years ago I proposed a means of promoting reconciliation and reparation for victims, and at that time I noted that organizations like the Catholic Community Foundation were established as a way to insulate funds belonging or donated to the Archdiocese from potential legal judgments and settlements. At that time the website of the Catholic Community Foundation stated that it was founded to support the ‘spiritual, educational and social needs of our Catholic community.’ I asked then, as I ask now, if making reparation towards those who have been harmed in such unspeakable ways by our clergy is not also a spiritual and social need of this Catholic community. I believe we cannot turn a blind eye to the harm and suffering experienced by those individuals, most of whom are or were members of our Catholic community, to preserve advantages for others.

3)      The motion and my affidavit will expose the ways in which the Archdiocese of Saint Paul and Minneapolis has harmed the pastors, assistants, and the lay leadership of the parishes, schools, and affiliated entities within this Archdiocese. This scandal began when the Archdiocese imposed sexually abusive clergy on parishes and their unsuspecting communities, not even offering the courtesy of a warning to parents and others responsible for the well-being of children and other vulnerable people. In addition, those of us who remember the 2010 Strategic Plan and subsequent decisions made regarding the subsidizing of parishes and schools will recall the arbitrary and unfair nature of the decisions that were imposed and then attributed to ‘local decisions’. And, those of you who are parish and school employees or who have been otherwise impacted by recent decisions regarding payroll providers and benefits plans will know that the same type of heavy-handed control continues. This is not only an abuse of the corporate form, but it unjustly, and at times cruelly, impinges upon the autonomy and the consciences of those who have been legitimately entrusted with the spiritual and temporal affairs of our local churches and ministries.

4)      Finally, it is my hope that the request for substantive consolidation creates a path by which we, as the people of this Archdiocese, can finally put this scandal and its fallout behind us. Despite what you may have been told by the Archdiocese or its representatives, the separate incorporation of the parishes is being called into question, meaning the only real way for parishes to get out from under the sexual abuse claims that they are facing is to participate in the bankruptcy process. I know that as a matter of justice, many parishes would gladly contribute the little that they are able to a settlement agreement, but are being prevented from doing so because a few parishes want to avoid having to add their considerable assets to the settlement pot. One might ask if such actions should be understood as mistaking right or wrong for what is good or bad for the institution, and if so doing is not an abdication of our collective responsibility to promote reconciliation and make reparation.

You can find my affidavit here.


 


Comments

scott
05/24/2016 9:24am

Keep being a hero Jennifer. You are a voice for us!!

T Russell
05/24/2016 3:54pm

This is a very interesting and informative affidavit Ms. Haselberger.

The ins and outs of this chapter 11 bankruptcy proceeding are daunting and somewhat frustrating at best. The non-profit status of these institutions, and religious missions, make the moral issues especially compelling as well.

Your approach, as I read it, seems to suggest that on a moral level (as opposed to the civil and canonical legal ones) the local Church in this diocese must remember that it is morally required to seek to care for the victims of sexual abuse at the hands of our Church leaders. It follows thus that all local Catholics bear some responsibility towards those harmed by this institution.

It seems to me that if this motion for substantive consolidation is granted, and the entire Church organization(s) exposed to liability it will be the donors and lay folks that pay up in any event, at a later date, as assets that are sold off would need to be replaced should the Catholic endeavor proceed in this local diocese. That is, if ordinary Catholics want this organization to continue its work and ministry going forward.

Indeed, it is our collective moral responsibility to adequately compensate sex abuse victims...at least if we still want to have places and institutes to practice, and serve, our faith and uphold our Church's integrity and mission. There is no way of getting around it folks...someone must pony up the cash to reach a fair and reasonable settlement of the legitimate claims made. It will be the abusers, clergy, and hierarchy that fund the fair solution to these liabilities anyway...that we know for certain. It will always be lay donors who desire to financially support this institution, and fund its continued existence, that will be stuck with the bill.

In this regard, what I would like to know is just what might be a fair remuneration to the legitimate victims of this Church caused abuse? That is, how much are we talking here given the nature of the claims? (and I realize it is not the same sum for each individual victim.) But I'd like to know an aggregate amount from the experts in the field for these types of personal injury cases.

Knowing that fair and carefully discerned figure might allow the entire Church, always funded by the laity and big donors anyway, to consider raising these sums out right. No more hiding assets and diverting fundraising efforts to bogus entities. Is it possible to have the donors, practicing Catholics, take on this responsibility head on! It's the right thing to do, especially, if we actually want this Church to continue its presence and ministries here in our area. Ahem, and yes, perhaps the laity and donors can receive some truth, transparency, and change as well for their faithful funding?

I realize that given the political and legal realities this idea is probably not a feasible option. However, always remember that subsequent to the selling of buildings and real estate, and emptied bank accounts too, guess whose going to come calling for for donations then folks?

That is, if any of us are still sitting in the pews.

Mary
05/25/2016 9:27pm

Thank you, thank you, Jennifer. You are as Esther, Deborah, and countless courageous & wise women of faith who have come before you. (I'm fairly convinced you're the most brilliant, though!) Publish my post or not - I'm "good" either way - mostly wanted to send you a note of encouragement & support.

06/13/2016 9:09pm

I was greatly fulfilled to find this site.i expected to thank you for this unprecedented read!! I without a doubt getting a charge out of each and every piece of it and I have you bookmarked to take a gander at new stuff you post.


Comments are closed.

    Author

    Jennifer Haselberger is a canon lawyer who served as the Chancellor for Canonical Affairs in the Archdiocese of Saint Paul and Minneapolis until April of 2013, when she resigned in protest of the Archdiocese's handling of sexual misconduct by clergy.

    To receive notice when a new post is added, follow @jmhaselberger.

    Archives

    February 2015
    January 2015
    December 2014
    November 2014
    October 2014