Diocese of Harrisburg gets court approval of refinancing agreements

By Sarah Lizee

Olympia, Wash., Sept. 8 – The Roman Catholic Diocese of Harrisburg received court approval to enter into refinancing agreements with First National Bank and the Ortenzio Foundation, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Middle District of Pennsylvania.

The agreements will provide for a $10 million loan from First National Bank to the charitable trust and school and a $10 million forgivable loan from the Ortenzio Foundation to the debtor, charitable trust and school, both of which will be used to pay the amounts due under the $30 million promissory note issued in December 2009.

The agreements require the irrevocable trust to issue a new note in an amount equal to the amount due under the $15 million promissory note issued in December 2010 and payable by the school, which will be used to refinance the 2010 note.

As a result of the refinancing, the debtor’s overall liability on the 2009 and 2010 notes will be reduced to about $10 million from $30 million.

Neither the First National Bank loan nor the new note to be issued by the irrevocable trust will be obligations of the debtor.

The diocese filed bankruptcy on Feb. 19, 2020 under Chapter 11 case number 20-00599.

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