The Official Committee of Unsecured Creditors v. The Archdiocese of Saint Paul and Minneapolis

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The Committee, which represented more that 400 clergy sexual abuse claimants, appealed the district court's decision affirming the bankruptcy court's denial of the Committee's motion for substantive consolidation of debtor, the Archdiocese, and over 200 affiliated non-profit non-debtors (Targeted Entities). The Eighth Circuit held that the Targeted Entities were entitled to the protections under 11 U.S.C. 303(a), and could not be involuntarily substantively consolidated with the Archdiocese. In this case, the Committee failed to plausibly allege sufficient facts to negate the non-profit non-debtor status of the Targeted Entities. View "The Official Committee of Unsecured Creditors v. The Archdiocese of Saint Paul and Minneapolis" on Justia Law