Harrisburg diocese committee OK’d to pursue fraudulent transfer claims

By Sarah Lizee

Olympia, Wash., Feb. 23 – The Roman Catholic Diocese of Harrisburg’s official committee of tort claimants received court approval to pursue fraudulent transfer claims against the diocese, according to court documents filed with the U.S. Bankruptcy Court for the Middle District of Pennsylvania.

The committee had filed a motion seeking an order granting it authority to commence, prosecute and settle two fraudulent transfer complaints against two trusts created by the diocese. The alleged fraudulent transfers occurred on Nov. 13, 2009, when the diocese transferred substantially all its assets, including its real and non-real property, into the Roman Catholic Diocese of Harrisburg Charitable Trust and the Roman Catholic Diocese of Harrisburg Real Estate Trust.

The committee claims the transfers were made with actual intent to hinder, delay or defraud creditors because they were made at a time when the debtor faced increasing threats of litigation due to widely publicized reports of clergy sexual abuse throughout the United States.

The committee alleges the estimated dollar value of the assets transferred to the trusts was around $80 million, leaving the debtor with essentially no assets.

As previously reported, both the diocese and the committee have filed separate Chapter 11 plans and related disclosure statements. Under the committee’s plan, plan distributions would be funded in part with proceeds from the two self-settled trusts.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.