Milwaukee parishes excluded from archdiocese bankruptcy

MILWAUKEE — A federal judge has ruled the parishes of the Catholic Archdiocese of Milwaukee will not be included in its bankruptcy proceedings.

Attorneys for creditors argue more than 200 parishes should be included in the archdiocese bankruptcy. They allege the archdiocese fraudulently transferred assets to protect it from sex abuse claims.

The archdiocese is facing more than a dozen civil lawsuits over how it handled clergy sex abuse cases and filed for bankruptcy last January. The parishes could still face separate lawsuits over more than $35 million in parish investment funds that the archdiocese moved off its books in 2005.

The Milwaukee Journal Sentinel says U.S. Bankruptcy Judge Susan Kelley could decide as early as Friday whether to allow creditors to sue to recover some of that money.