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Judge rules Milwaukee Archdiocese investment funds safe from creditors

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Judge's Gavel By Brian Turner (Flickr: My Trusty Gavel) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
Judge's Gavel By Brian Turner (Flickr: My Trusty Gavel) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

MILWAUKEE (WTAQ) - Those who are owed money in the Milwaukee Archdiocese bankruptcy case will not get their hands on $35 million in parish investment funds.

Federal Bankruptcy Judge Susan Kelley said it was “fishy” that the Catholic Archdiocese transferred the funds to other accounts back in 2005, at a time when it was being sued for sexual abuse by its priests.

But Kelley ruled Monday that the Archdiocese never owned the money – and its 200 parishes either took the funds back or invested them in good faith. As a result, Kelley said the creditors could probably not recover the $35 million even if they could.

It’s the second major victory for the Archdiocese in the bankruptcy case it filed almost two years ago. Last week, Judge Kelley said the creditors could not touch the assets of the parishes themselves.

The committee for the creditors is expected to appeal the latest ruling. The creditors include almost 575 people who claim they were sexually abused by priests in Milwaukee Archdiocese – plus the pension and health care funds in the archdiocese.

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