By John Q. Hosedrinker 
A month before bankruptcy, the Oakland Diocese transferred $106 million to a previously inactive non-profit, the Oakland Parochial Fund, prompting accusations of asset protection. Attorneys for abuse survivors claim this maneuver shields funds that should compensate victims of clergy sex abuse. This transfer is part of a larger dispute over the Diocese’s proposed reorganization plan, which survivors argue undervalues their claims and obscures the Diocese’s true financial capacity. The Diocese maintains that the allegations are unsubstantiated and disputes the interpretation of the fund’s purpose and accessibility.
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The Oakland Diocese recently filed for bankruptcy, but allegations of a significant asset transfer just prior to the filing have sparked outrage and legal action. Attorneys representing survivors of clergy sexual abuse claim that the Diocese transferred $106 million to the Oakland Parochial Fund, a non-profit seemingly dormant for years, shortly before declaring bankruptcy. This move is viewed as a deliberate attempt to shield assets and minimize potential settlements owed to abuse survivors.
The timing of the transfer, roughly a month before the bankruptcy filing, is highly suspicious. The sheer magnitude of the sum, $106 million, further fuels suspicions of intentional asset concealment. Attorneys argue that this money should be readily available to compensate victims for the abuse they endured at the hands of East Bay priests, many of whom escaped serious criminal consequences. The argument centers around the principle that a bankrupt entity must make all assets available to creditors, and that the Diocese’s actions directly violate this principle.
One attorney representing abuse survivors stated that any bankruptcy judge would readily recognize the impropriety of removing such a substantial sum before declaring bankruptcy. The assertion is that this action undermines the bankruptcy process and prevents fair compensation for victims. A court filing directly objects to the Bishop’s proposed reorganization plan, highlighting this transfer as a key piece of evidence indicating a broader strategy to mislead survivors, undervalue their claims, and ultimately avoid financial responsibility. A formal complaint has been filed, seeking to reverse the transfer and make the funds available for settlement.
Another attorney involved, representing the Official Committee of Unsecured Creditors, emphasized that a debtor seeking bankruptcy protection must fully disclose their assets. The Diocese, they argue, has failed to do so, holding back hundreds of millions of dollars in cash, investments, and real estate that should be used to compensate abuse survivors. This lack of transparency directly contradicts the requirements of bankruptcy law and raises serious concerns about the Diocese’s intentions.
The Oakland Parochial Fund, established in 2014 and directly controlled by Bishop Michael Barber, is at the heart of this controversy. Corporate records show the fund was inactive from 2017 until shortly before the $106 million transfer. The Diocese’s chief financial officer reactivated the fund months before the transfer, and according to the complaint filed, the fund held no assets prior to receiving this significant sum. This sudden influx of funds immediately before bankruptcy raises serious questions about the legitimacy of the transfer.
The Survivors Network of those Abused by Priests (SNAP) has also condemned the Diocese’s actions, characterizing the fund as a mere corporate shell used to shield assets. They highlight the irony of a fund supposedly intended for charitable purposes now holding millions in assets inaccessible to the very people the church claims to serve. The public outcry highlights the perception of hypocrisy and a systemic effort to prioritize the church’s financial well-being over the needs of abuse survivors.
The situation has ignited a broader debate about the financial practices of the Catholic Church and the potential for abuse of non-profit status. Many are questioning the oversight of religious organizations and the apparent ease with which large sums of money can be transferred to obscure entities, particularly in the context of bankruptcy proceedings. The legal battle promises to scrutinize the Diocese’s financial dealings and potentially expose further instances of questionable behavior. The ultimate outcome will have significant implications for both the legal framework governing religious organizations and the quest for justice for victims of clergy sexual abuse. The sheer scale of the alleged transfer – $106 million – underscores the gravity of the situation and the urgent need for transparency and accountability.