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Lawyers for abuse survivors: Archdiocese hid money to 'avoid financial responsibility'

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Lawyers for hundreds of survivors of clergy sex abuse accuse the bankrupt Archdiocese of St. Paul and Minneapolis of a "scheme" to under-report its assets.

Attorney Jeffrey Anderson said Tuesday the archdiocese has "refused or failed to divulge its true worth and has deceived the (bankruptcy) court ... to avoid financial responsibility." (A video of Anderson's press conference is below.)

After declaring bankruptcy early last year, the archdiocese claimed assets of $45 million but Anderson estimates their net worth is actually $1.7 billion.

The archdiocese takes exception to Anderson's claims. In a statement Archbishop Bernard Hebda says: "The Archdiocese has disclosed all of its assets and has followed all the rules set forth by the Court and all directives from the judge."

Why the huge discrepancy?

The difference between $45 million and $1.7 billion is indeed vast. The disagreement has to do with what should be counted as an asset.

Anderson and his colleagues argue in a court motion filed this week that many parishes, schools, foundations, charities, and cemeteries are under the financial control of the archdiocese. Those entities were not counted in the archdiocese's $45 million figure.

Examples include the Catholic Community Foundation of Minnesota; the Catholic Finance Corporation; Totino Grace, DeLaSalle, and Benilde-St. Margaret High Schools; and The Catholic Cemeteries.

The new filing asks the bankruptcy court to consolidate those and other assets into the case for what Anderson calls "a more realistic picture of the net worth" of the archdiocese.

The motion was filed by the Committee of Unsecured Creditors of the Archdiocese, which includes more than 400 people who say they were abused by clergy members and want compensation from the church.

Most of those abuse survivors are represented by Anderson and his colleague Michael Finnegan, who appeared at a news conference Tuesday to discuss the motion.

What next?

The bankruptcy court is trying to come up with the best strategy for paying back people and businesses that are owed money (including abuse victims) while still keeping the archdiocese afloat financially.

The judge will consider the argument that parishes, schools, and other entities should be included among the archdiocese's assets. MPR News reports a similar argument was unsuccessful in an archdiocese bankruptcy case in Milwaukee.

Meanwhile, Hebda says the archdiocese will give the court its bankruptcy reorganization plan by the end of the week.

The archbishop wrote in his statement Tuesday they "welcome the scrutiny of the Court and all others involved. We believe it will show our commitment to a fair, just and timely resolution of all the claims made against us – especially for those who have been hurt by people in the Church."

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