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Bankruptcy Court Can’t Join Catholic Affiliates to Archdiocese Case

Bankruptcy Court Can’t Join Catholic Affiliates to Archdiocese Case

Bankruptcy Court Can’t Join Catholic Affiliates to Archdiocese Case

Consolidation would violate Code’s prohibition on involuntary bankruptcies of nonprofits
A federal District Court in Minnesota has affirmed a Bankruptcy Court decision refusing to join more than 180 separate Catholic affiliates in the bankruptcy proceeding of the Archdiocese of St. Paul and Minneapolis. The Court has ruled that the action would violate the Bankruptcy Code’s prohibition against involuntary bankruptcies against a corporation that is not “a moneyed, business or commercial corporation.” The Unsecured Creditors’ Committee sought to join 187 separately-incorporated parishes and their related schools and cemeteries within the Archdiocese’s region, several consolidated schools, the Catholic Community Foundation of Minnesota, and a variety of other Catholic...

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