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Appeals court considers $55-M in cemetery funds in church bankruptcy case

UNDATED (WSAU-Wheeler News) A federal appeals court in Chicago will hear arguments today on whether the Milwaukee Catholic Archdiocese must make $55-million in cemetery funds available to priest sex abuse victims. Creditors in the archdiocese bankruptcy case say the church has no legal right to protect its cemetery fund. They also say Federal Judge Rudolph Randa had a conflict of interest when he ruled that the church can keep the money. That's because he bought plots in the Catholic cemeteries, and has numerous relatives buried there.

Creditors also believe that former Milwaukee Archbishop Tim Dolan created the fund specifically to hide money from the priest abuse victims. The church says the donations it receives are intended to care for Catholic cemeteries throughout the ten-county Archdiocese in southeast Wisconsin. Randa said the church fund was protected by the Religious Freedom Restoration Act of 1993, and the First Amendment's freedom of religion.

Legal observers call this the first case to be raised about the use of trust funds under the Religious Freedom act. They expect any decision to be appealed to the U-S Supreme Court -- where the final outcome may affect other cases which involve religion's impact on health care and gay marriage.