United States Bankruptcy Court Issues Opinion in Jim Stang’s Archdiocese of Santa Fe Case

October 2020
The United States Bankruptcy Court for the District of New Mexico recently published an opinion in the Archdiocese of Santa Fe bankruptcy church abuse case. The unsecured creditors’ committee filed a motion for authority to bring fraudulent transfer and turnover claims against certain trusts and parishes.
The Archdiocese of Santa Fe includes more than 90 parishes within New Mexico. In 2012, the Archdiocese of Santa Fe and the parishes formed real estate and financial asset trusts for the stated purpose of aligning the archdiocese under canon law with civil law. The trust is to “support the religious, charitable and educational purposes” of the debtor [Archdiocese of Santa Fe], the parishes, and other affiliated entities. More than two years before filing for bankruptcy, the archdiocese transferred assets into both the real estate and financial assets trusts.
The committee, represented by James Stang and Ken Brown of Pachulski Stang Ziehl & Jones, proposed to file three complaints before the court: one to avoid transfers to the real estate trust, one to avoid transfers to the financial assets trust, and one to avoid the parishes’ claimed interests in the property titled in the archdiocese's name. The transfers challenged by the committee total more than $150,000,000.
The New Mexico bankruptcy court concluded its opinion by granting the firm’s motion. 

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