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Bankruptcy court may recover transfer to church cemetery trust

Bankruptcy court may recover transfer to church cemetery trust

Bankruptcy court may recover transfer to church cemetery trust

Neither the Religious Freedom Restoration Act nor the First Amendment precludes a bankruptcy court from recovering a $55 million transfer of funds from the general accounts of Archdiocese of Milwaukee to a separate trust for the maintenance of Catholic cemeteries, the Seventh Circuit Court of Appeals has held. The Court has rejected a series of arguments from the Archbishop that the money had been set aside for perpetual care according to Canon Law. The Archdiocese filed for bankruptcy protection in 2011 while facing financial problems and lawsuits from victims of alleged sexual abuse. It transferred the funds in 2008 after the Vatican had approved the action. The Bankruptcy Court allowed...

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