Avoiding Moral Bankruptcy

Abstract

Faced with hundreds of clergy sexual misconduct cases last year, the Archdiocese of Boston hinted that it was considering filing for bankruptcy. Although it is hard to imagine an archdiocese or church filing for bankruptcy, bankruptcy has become an important forum for many social issues that cannot be easily resolved elsewhere. This Article explores the implications of a religious organization bankruptcy filing by focusing on four problems with the bankruptcy alternative: the possibility of dismissal for being filed in bad faith; the question of what church assets are subject to the process; the fact that the church might be subject to intrusive scrutiny; and the moral implications. Although these concerns suggest that a religious organization should file for bankruptcy only as a last resort, this Article concludes that, in some circumstances, a bankruptcy filing may be appropriate.