The paper "Montana Diocese Files for Bankruptcy Protection by Eliza Wiley" is a delightful example of an article on finance and accounting. According to an article in News-Journal. com, the Roman Catholic Diocese of Helena in Montana filed for bankruptcy protection Friday 31 January 2014 as part of a proposed 15 million dollar settlement for victims who alleged to have been sexually abused by clergy members. There were two suits filed in respect of the alleged abuse. The Chapter 11 insolvency reorganization plan comes after classified conciliation sessions with the insurers and plaintiffs’ attorneys, resulting in a proposed agreement to solve the abuse claims. Some of the law issues in the case are that the diocese filed a suit in court for bankruptcy protection to prevent its closure.
It was to pay 2.5 million dollars to the victims while the remaining amount was to be settled by its insurers. The diocese officials were to pay a share of the settlement in cash although they anticipated that some of the church’ s property would need to be sold in order to settle their payments. However, the church’ s financial position was precarious before the current suits were filed against it.
From the documents filed in court, the church’ s assets were up to 10 million dollars while its liabilities were up to 50 million dollars. The U. S. Bankruptcy Court in Montana was to approve and supervise the settlement payment to the victims. Most of the clergy members accused of the sexual abuse had however died. The issue concerning the settlement of the abuse victims however was still under negotiation between the parties. One of the legal issues in the above case concerning the Montana Diocese church is protection against bankruptcy.
Such a suit is based on protecting the church from liquidation and allowing it to proceed with the day-to-day running of its business. It is therefore founded on Chapter 11 of the Bankruptcy Code on reorganization. There is however another possible solution with regard to bankruptcy claims against the church. This is liquidation.
Eliza Wiley, (February 1, 2014). 2014Montana diocese files for bankruptcy protection
United States Courts, 2014. Process
United States Bankruptcy Court Northern District of Illinois Eastern Division, (February 4,
2010), 2014.Re Michael Letourneau