A federal judge has rejected an attempt by the bankrupt Archdiocese of Santa Fe to block three lawsuits accusing it of transferring millions of dollars in property to individual parishes to shield the assets from settlements in sexual abuse cases.

Last week’s ruling allows lawsuits for hundreds of victims to proceed, while the archdiocese says it will file another appeal.

“The gist of the proposed actions was that [the archdiocese] allegedly transferred to its 93 parishes most of [its] property, without consideration, and with the intent to hinder, delay, or defraud its creditors (almost entirely sex abuse claimants),” U.S. Bankruptcy Judge David T. Thuma wrote in his ruling.

The real estate assets the Church is accused of attempting to shield could be worth more than $150 million, according to the ruling. The assets include churches, schools and money raised from parishioners.

If the lawsuits brought against the archdiocese are successful, the assets could be sold to pay settlements to survivors of clergy sex abuse.

Attorneys said the overwhelming majority of 340 claims filed against the archdiocese by a June 2019 deadline alleged sexual molestation and assault, but the actual number of survivors is closer to 2,000. The archdiocese said at the time at least 78 clergy members had been credibly accused of sexually abusing children.

The archdiocese filed for bankruptcy in 2018.

A committee of lawyers filed complaints arguing the archdiocese created trusts for real estate and assets, and made individual parishes the beneficiaries before transferring millions of dollars in land and other assets to the trusts in 2013 to protect them from creditors.

The plaintiffs also argued that prior to 2013, the parishes did not exist as separate legal entities and could not hold legal or beneficial interests in the property.

The archdiocese argued that the shifting of assets was part of a reorganization effort and not fraudulent.

According to the ruling, the archdiocese intends to appeal the decision in a process that could last several years.

“One of the things [the archdiocese] said is that the First Amendment — religious freedom — a federal law called the Religious Freedom Restoration Act and the Church’s canon law says that Judge Thuma cannot do anything about these transfers,” said James Stang, a Los Angeles attorney representing the claimants.

“Our position is the First Amendment does not protect you from defrauding your creditors, that the Religious Freedom Restoration Act does not protect you from defrauding your creditors and that canon law has nothing to do with this dispute because this is not a dispute between the parishes and the diocese, which would be controlled by religious law,” he continued.

“This is a dispute between people who were sexually abused as children and the parishes and the diocese. And their rights are not controlled by the law of the Catholic Church. Their rights are controlled by the laws of New Mexico,”

Ford Elsaesser, an attorney who represents the archdiocese, could not be reached for comment.

(7) comments

Grace Trujillo

And now they are worried about their First Amendment. Wow. They should have to sell their assets to pay the victims. They are not above the law! They didn't think about the victims, when they moved their pedophile clergy around when there were complaints. If a citizen was arrested in this situation, they would have to pay, and the church should not get away with this.

Stefanie Beninato

I remember that one poster's comment that abusive priests represented "only" one percent of the priests. The archdiocese has admitted to credible allegations against 78 priests. With 93 parishes that is almost one per parish--a lot higher than one percent.

I am thrilled that the bankruptcy court is not allowing this attempt at wholesale fraud on the part of the Catholic Church. Welcoming in trans people to the Church does not make up for the history of abuse of children (mostly boys) and women. They have produced lifetimes of trauma and the Church should be held accountable IMHO.

Steve Martinez

These 78 or so abusers were priests before, and during the administration of Robert Sanchez. Archbishop Sheehan cleaned up the Church, getting rid of the abusers, by sending them back where they came from, after letting their Bishops know why are were removed from our Archdiocese, or by removing those under his control from being priests.

If you know of any priests who abused anybody after Archbishop Sheehan took over, or under Archbishop Wester, I'd like to know who they are.

Stefanie Beninato

I didn't say that. And Sanchez himself allegedly abused women sexually; sent a known predator back into a parish in NE NM and allowed many to leave up in Jemez Springs. I am objecting to Wester's attempt to shield church assets rather than compensating victims.

Steve Martinez

You tried to suggest that 78 of 93 Priests in the Archdiocese were dirty, you were just being dishonest.

Anita C de Baca

What does "getting rid of" mean exactly? Sending them back where they came from so they can do it to someone else? Anyone who is enough of a monster to do these things belongs in prison, period.

Steve Martinez

Getting rid of them means that they were sent back to their dioceses, with an explanation as to why. It is up to the so called priest's Bishops to remove them. Regarding prison, yes, they needed to go, but by the time charges were filed, most of these so called priests have died.

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