The Catholic Archdiocese of Milwaukee's 200-plus parishes are separate legal entities and their assets will not be consolidated with the archdiocese's as part of its bankruptcy, U.S. Bankruptcy Judge Susan V. Kelley ruled Thursday in a major victory for the church.
ut 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.
Kelley could decide as early as Friday whether to allow the bankruptcy creditors - including hundreds of sexual abuse victims, the archdiocese's pension and health care funds, and others - to sue to recover at least a portion of those millions.
Attorneys for the creditors argued in a Thursday hearing that the archdiocese fraudulently transferred the money to shield it from sex abuse claims.
They pointed to the minutes of a 2003 meeting of the archdiocese's finance committee in which it discussed "setting up a trust fund to shelter the Parish Deposit Fund."