“One of the things that would happen under the Chapter 11 is we would continue to operate,” Marek said. “We don’t anticipate cutting more employees because one of the reasons we’re filing a Chapter 11 is to be able to put a number of affairs in order, but also to submit an operating plan that is feasible for the organization going forward, and on a day-to-day basis we’ve been able to pay our bills.
“What we can’t deal with is the potential litigation cost of a large number of lawsuits, which are very expensive to take through a trial process, and we’ve already in the past made significant cuts in staffing, to where we really are operating with a very bare bones type of operation now,” he added.
The second largest portion of assets is the St. Aemelian Trust, which holds $4.65 million to support orphans, dependent and neglected children, and promotes education, charity and religion.
Another asset is the Catholic Stewardship Appeal, the annual archdiocesan collection that supports the central offices of the Archdiocese of Milwaukee. As of June 30, 2010, the amount of appeal donations on hand was $4.4 million.
Other assets include funds invested for others totaling $2.98 million. This money has been raised, held and invested for groups such as the Black and Indian Mission grant, and the Continuing Formation for Clergy fund.
The $4.1 million for restricted, long-term investments are monies received from donors for designated purposes that are invested until needed for a specific purpose. Under law, these funds can only be used for activities specified by the intent of the donor, according to the statement. The same is true for restricted short-term investments that total $3.6 million.
In addition to assets, the archdiocese also has legal responsibilities that include contributions payable, accounts payable, and the Cousins Center mortgage.
In 2006 the archdiocese mortgaged the Cousins Center to fulfill its obligation to victims/survivors and settle claims of sexual abuse of minors in California by two Milwaukee archdiocesan priests. On the market for more than four years, the Cousins Center holds an outstanding loan of $4.65 million. In light of the impending bankruptcy, the bank that issued the mortgage requires the archdiocese to pay back principal, rather than just the interest they’ve been paying these last few years, according to Marek.
“We would anticipate that the other property that the archdiocese has either put up for sale in the past or was willing to use to achieve a settlement, would become part of a settlement within the Chapter 11 proceeding,” Marek said, describing areas of land in Caledonia, Germantown, Mount Pleasant, New Berlin and Franklin, as well as a chapel in Genoa City and a school building in Milwaukee. “In the case of the Cousins Center, there is a secured interest – which is Park Bank – who made the loan to the archdiocese, who would have first claim on proceeds to selling the Cousins Center.”
Accounts payable are debts for which the archdiocese is responsible, and as of June 2010 totaled $1.4 million, owed to companies and individuals providing goods and services to the archdiocese. The archdiocese also owes approximately $1 million to victims/survivors of clergy sexual abuse from mediated settlement agreements.
