Who Owns the Local Church? A Pressing Issue for Dioceses in Bankruptcy

Abstract:     
The recent bankruptcies of Catholic Dioceses are unprecedented. For the first time, Bankruptcy Courts must deal with the difficult question of who owns the parish church. In this paper, I will explore two possible sources of confusion about this question. The first is the non-commercial, charitable nature of the Church. The second is its organizational complexity. Resolving the confusion requires a familiarity with various different sources of law including charities law, bankruptcy law, trust law, and Canon Law. In this paper I address this issue by: 1. discussing why the equities and policies that govern charitable bankruptcies are different from those that govern commercial bankruptcies; 2. laying out a road map for determining ownership issues that indicates what sub-questions must be answered and in what order; and 3. discussing the role that each of the different sources of law plays in answering these questions. My conclusion is that, in most circumstances, individual parishes do have a significant ownership stake in assets that are given or dedicated for their use.

Keywords: Catholic Church, Catholic Dioceses, Bankruptcy Court, charities law, bankruptcy law, trust law, Canon Law, charitable bankruptcies, commercial bankruptcies, ownership, parish church

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