Last Friday, a bankruptcy judge ruled that the archdiocese of Portland owns its parishes and schools and therefore they can be liquidated to pay off legal judgments. The archdiocese had filed for bankruptcy protection and then claimed that the property of parishes and schools should not be considered the legal property of the the archdiocese, but of the individual institutions.
Now under canon law, that is true. But Portland, like too many other dioceses, did not follow the niceties of canon law when incorporating under civil law. If they had, they would have made each parish an individual corporation with the archbishop as the chief corporate officer of the each one. Thus a legal judgment against any one or against the archdiocese or the archbishop himself would not affect the others. But with the archdiocese as a corporation sole, that option is not available. In the eyes of the court, all those parishes and schools are all part of one big corporation in the name of the archbishop, canon law notwithstanding.
[This is all explained in detail in this Catholic World Report article by Tom Szyszkiewicz from October 2005.]
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