Creditors’ attorneys in archdiocese bankruptcy attack cemetery trust

Attorneys for the creditors in the Archdiocese of Milwaukee bankruptcy are attacking the validity of its $50 million cemetery trust, saying it was created in 2007 to defraud victims of clergy sex abuse. The creditors committee, composed of victim-survivors, filed a counterclaim Tuesday against the trust and its sole trustee, Archbishop Jerome Listecki, asking the bankruptcy court to void the 2008 transfer of $55 million into the account, and to declare the trust invalid.

If the trust is declared valid, it argues, the court should require the archdiocese to trace all deposits to ensure that assets legally available to pay settlements are not commingled with cemetery funds.

Archdiocese attorneys say they are not authorized to comment publicly on the legal proceedings, and a spokeswoman for the archdiocese did not immediately return a telephone call seeking comment.

The counterclaim is in response to a claim filed by Listecki and the Archdiocese of Milwaukee Perpetual Care Trust in June seeking to keep the cemetery funds from being considered part of the debtor’s estate and therefore available to pay creditors.