Priest Payments Imperil Del. Diocese's Ch. 11 Plan

Law360, Wilmington (July 14, 2011, 9:09 PM EDT) -- The Catholic Diocese of Wilmington Inc.’s reorganization went on life support Thursday after a Delaware bankruptcy judge recoiled at the prospect of sexually abusive priests receiving financial aid from the church body and shot down its Chapter 11 plan.

The diocese, which was forced into bankruptcy in 2009 by a flood of lawsuits over alleged sexual abuse by clergy members, had sought in its plan to retain the right to provide limited financial aid — described as sustenance — to admitted or substantiated abuser priests, which...
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