Bishop Walter Hurley, Apostolic Administrator for the Diocese, announced that by October 2020, all Catholic parishes will be incorporated as separate non-profit corporations. The cost of this will be in the thousands of dollars. This is in the backdrop of continued investigations by the Michigan attorney general into dioceses across Michigan regarding a host of issues, most prominently, sexual abuse. Various individuals have stated that incorporating these parishes is meant to shield the Diocese from potentially damaging lawsuits.

This comes to some as a surprise, as Bishop Hurley was thought to be a caretaker bishop/administrator until a new bishop was installed for the Diocese.  It is clear that he intends to play a more active role.

Each parish will be required to set up articles of incorporation. The corporation will have 4 board members:

  • The diocesan Vicar
  • The Diocesan Chancellor
  • The Pastor/Pastoral Administrator
  • A member of the Finance Council of the parish
  • The Bishop is listed as the sole member of the corporation.

This move comes as dioceses around the United States attempt to deal with literally of millions of dollars of payouts to sex abuse victims, their families, and the legal community to deal with this disaster.  By incorporating each parish separately, some legal experts believe this may prevent the assets from these individual parishes from being part of a lawsuit against a bishop and/or his diocese.

That move, however, may not be a guarantee that individual parishes are spared from being targets of a major lawsuit against the bishop.  This is because the bishop will retain essentially total and complete control of each of the individual parish corporations.  In the bylaws of these corporations, the bishop is listed as “sole member” of the corporation.  The bishop will have the following power over the corporations:

  •  Approval of any amendments to the corporation’s articles of incorporation and bylaws.
  • Remove and replace directors and officers of the corporation.
  • Veto any resolutions of the board of directors that the Bishop deems to be
    inconsistent with Universal and Particular Law or the purposes or philosophy of the corporation or the Catholic Faith.

With this power and involvement in the individual corporations, it may be difficult for a court to honor the independence of each of these corporations as separate from the bishop or the diocese.  It remains to be seen if a diocese involved in a lawsuit will be able to prevent individual parish assets from being dragged into a settlement or payout if the diocesan personnel (vicar, chancellor) and its bishop is so heavily involved with each of these corporations.

The cost of this will be significant, as each parish will need to file articles of incorporation with the State of Michigan, have yearly meetings, and keep corporate records.  Many have noted that these maneuvers come as a response to the gross mishandling and often compliance with active sexual abuse committed by priests of the diocese.  Donor dollars of the faithful are paying for all of this.  Therefore, all faithful Catholics have a duty to appropriately guard their hard-earned dollars and try as best as possible to ensure their dollars are put in the hands of honest people for only moral causes in the Church.