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Milwaukee archdiocese asks Supreme Court to weigh in on bankruptcy fund

Milwaukee Archbishop Jerome Listecki answers questions in St. Francis, Wis., after announcing the archdiocese would file for bankruptcy. Listecki said Wednesday, Feb. 12, 2014, that the Archdiocese of Milwaukee has proposed setting aside $4 million to compensate the victims of clergy sexual abuse in its bankruptcy reorganization plan. (AP Photo/Morry Gash, File)

Milwaukee Archbishop Jerome Listecki answers questions in St. Francis on Feb. 12, 2014, after announcing the archdiocese would file for bankruptcy. (AP File Photo/Morry Gash)

MILWAUKEE (AP) — The Archdiocese of Milwaukee asked the U.S. Supreme Court on Tuesday to weigh in on whether an estimated $70 million held in trust for the care of its cemeteries is off-limits in the archdiocese’s bankruptcy case.

Archbishop Jerome Listecki, who serves as sole trustee of the fund, asked the court to review a March ruling by the 7th U.S. Circuit Court of Appeals in Chicago. The appeals court said the federal Religious Freedom Restoration Act, which protects religious organizations from government interference, doesn’t protect the money because creditors seeking a share of the fund aren’t the government.

But the archdiocese, which filed for Chapter 11 bankruptcy protection in 2011 to address its sex abuse lawsuit liabilities, argues the ruling is at odds with decisions in at least three other federal courts, the Milwaukee Journal Sentinel reported.

Attorney Timothy Nixon, who represents the trust, said a Supreme Court review is needed to resolve those so-called circuit splits, and to restore religious protections.

“The Supreme Court’s intervention is urgently needed to protect the religious freedoms the Seventh Circuit decision threatens and to restore the free exercise of religion protections the decision rolls back,” Nixon said in a statement.

Marci Hamilton, a First Amendment scholar representing the creditors committee, called the archdiocese’s arguments “slim pickings” and said it was unlikely the Supreme Court would take the case so soon after last year’s Hobby Lobby decision, which also turned on the Religious Freedom Restoration Act.

“In this circumstance, there are some minor disagreements over some of the issues, but no deep seated circuit split that would invite the court’s attention,” Hamilton said. “It’s unfortunate that they have decided to draw out this (bankruptcy) process even further for these survivors.”

Attorneys for clergy sexual abuse victims have accused New York Cardinal Timothy Dolan of creating the trust fund when he was archbishop of Milwaukee to hide money from their clients. Their lawsuit has potentially far-reaching consequences because many Roman Catholic dioceses hold money in trust, and the victory for victims in Milwaukee could pave the way for others elsewhere.

Jerry Topczewski, chief of staff for Listecki, said the filing would have no effect on the archdiocese’s reorganization plan, which is scheduled for a confirmation hearing beginning Nov. 9. The archdiocese is in the process of revising that plan, which is scheduled to be submitted to U.S. Bankruptcy Judge Susan Kelley on Aug. 3.

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