What Happens When A Church Files Bankruptcy?

Archbishop Hon and Father Jeff are not using scare tactics.  The jungle is misleading people into thinking that bankruptcy is a positive solution to cleaning the Church.  Some people in the jungle feel that cleaning the church means selling the RMS property and the chancery.  Now, we know why they want to remove the Deed Restriction on the property.  The reason had always been the 75 million dollar property in Yona.  In his comment in the jungle, CNMI lawyer proposed to sell the RMS property and chancery (the bold is mine). 

CNMI LawyerSeptember 18, 2016 at 3:29 AM

File Bankruptcy Soon -- Voluntary or Involuntary!
One of the great benefits of bankruptcy is that it gets all litigation involving the debtor (Archdiocese of Agaña) under “one roof,” so to speak, through the process of bankruptcy ancillary proceedings.

Any dispute to which the debtor is a party (plaintiff or defendant) must be decided in the federal bankruptcy court -- beyond the reach of NCW Cult. This would include defamation actions, a quiet title action over the RMS property, RICO claims for fraudulent ordination, and any claims by survivors of abuse that was abetted by institutional cover-up.

There is an Automatic Stay on all civil litigation anywhere in the USA as the bankruptcy court sorts things out.

Frankly, bankruptcy would save the Archdiocese a great deal of money in attorney fees alone, considering all the pending and impending litigation. All attorney fees in such cases must be approved by the court.

God created Purgatory because He is infinitely just, but infinitely merciful. 
Bankruptcy is the civil law attempt to emulate that divine justice and mercy in the financial sphere.

To the extent possible, the just claims of those injured by the Archdiocese and its “employees” operating under a culture of blackmail will be satisfied, while the faithful within the Archdiocese are shown mercy in a fresh start without overwhelming debts.

Selling off the Yoña property and the Chancery would be well worth the purification of our Church.

Needless to say, in bankruptcy ancillary litigation, the actual abusers can be forced to disgorge personal assets and any ill-gotten gains.

Fraudulently concealing assets in bankruptcy proceedings is a federal crime. So it is quite possible that predators who have avoided imprisonment due to running of the statute of limitations may once again find themselves facing the same fate if they are not fully candid about their assets.

The beauty of bankruptcy is that we do not need to wait for the tedious workings of the Chancery to do so.

Even a single survivor can file an involuntary case to place the Archdiocese into bankruptcy.

Let the race to the courthouse begin!

 Below is an article explaining the reality when a Church files for bankruptcy.  According to the article: What happens when a Church goes bankrupt?  
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What Happens When a Church Goes Bankrupt?

By Chris Mooney

Faced with the possibility of having to pay more than $100 million in damages to alleged sexual abuse victims, the Archdiocese of Boston is weighing whether to file for Chapter 11 bankruptcy. What happens when a church goes belly up?

Unlike businesses, charitable organizations like churches cannot be forced into bankruptcy by their creditors, but they can opt to file on their own. Such filings are rare, but according to the Boston Globe the Dallas diocese got Vatican permission to file for bankruptcy in 1997 after a jury awarded $119.6 million to the victims of an abusive priest. The diocese never actually filed, but the mere threat of bankruptcy resulted in a settlement for the more modest sum of $31 million.

Once a holy entity like a church seeks a business-oriented remedy like Chapter 11, it has to go through the same procedures as everyone else. Despite the stigma associated with bankruptcy, Cardinal Bernard Law's archdiocese may file as a way of avoiding years of expensive litigation. Filing for Chapter 11 doesn't constitute an admission of guilt: In the business world companies often go straight to bankruptcy court before anyone has won a case against them.

The advantage for the archdiocese is that a bankruptcy filing would stay the civil lawsuits against the church. When a bankruptcy petition is filed, the filing constitutes an automatic federal court injunction that bars anyone from proceeding with a suit against the debtor. So a bankruptcy court—instead of a civil court—would determine what the 450 sexual abuse plaintiffs' claims were worth, if anything. The bankruptcy court's decision is final unless the proceeding is prematurely dismissed, at which point the abuse cases could resume in civil court.

But here's the disadvantage for the archdiocese: If the bankruptcy court decides the church owes the alleged victims a large sum of money, it is going to be obliged to pay them as typical Chapter 11 "creditors" and not necessarily on its own terms. The church would get the opportunity to put forward an initial payment plan, but if the proposed settlement isn't acceptable to the victims, the bankruptcy court could go with a payment plan much less advantageous to the church.

What money would the archdiocese use to pay off its "creditors"? In a typical Chapter 11 reorganization procedure, a business might cut back on its less productive or cost-efficient operations to increase its cash flow. But it's hard to apply concepts like productivity to a religious entity, and since donations have declined dramatically in the wake of the scandal, the archdiocese would probably have a rough time paying off its creditors through income alone. The church might have to liquidate some of its assets. No need to start auctioning off pews, bibles, and religious relics—the Boston Archdiocese has a very worldly $1.3 billion in real estate holdings.