Abuse Settlement May Include Parish Cash

The Diocese of Wilmington, Del., plans to appeal a federal bankruptcy judge’s ruling that the funds deposited by parishes, schools and other Catholic entities into its investment fund are property of the diocese and subject to distribution to victims of sexual abuse by members of the clergy. Judge Christopher Sontchi said in his decision on June 28 that the entire $120 million pooled investment account held in the name of the diocese should be considered diocesan assets, even though the diocese said it has only $45 million of its own money in the account. Others with funds in the pooled investment account include five parishes, four schools, three cemeteries, three present or former group homes for children, the Catholic Youth Organization and the Catholic Diocese Foundation. Bishop W. Francis Malooly of Wilmington announced in October 2009 that the diocese had filed for bankruptcy protection. His announcement came a day after the breakdown of settlement negotiations with representatives of eight victims of abuse.

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