Federal judge decides that bankruptcy filing applies to all of Puerto Rico’s Roman Catholic churches

After the Supreme Court of Puerto Rico ordered the seizures of all church assets, the Archdiocese of San Juan filed for Chapter 11 bankruptcy. Presiding over the bankruptcy case, Judge Edward Godoy decided that the bankruptcy filing applied to all the dioceses of the Catholic Church in Puerto Rico.

Previously, both the dioceses of Ponce and Mayaguez had filed for a motion to stop the seizure of their assets, claiming that they were not part of the pension plan lawsuit between retired teachers of Catholic school employees and the Archdiocese of San Juan.  This because the Supreme Court had already decided that the church was a single entity and that the embargo would also apply to them.

The legal battle between the retired employees of the Church and the Catholic Church in Puerto Rico goes back to 2016, when the Archdiocese announced that there was no money to continue with the retirement plan payments that were promised to their school teachers. The church continues their claim that they lack the necessary funds to pay the pensions of their retired employees, some of which are now in advanced age. Antonio Buze, an attorney representing the teachers, told AP News that he was not surprised by the bankruptcy filing, stating: “They have used all kinds of tactics to not comply with the pensions of these retired teachers.”  

With the decision made by Judge Gody, the seizure of assets has been paralyzed, and the church does not have to issue retirement payments. The move places pensioned teachers, similar to creditors through a sentencing, in a position to fight with other creditors for their money. In this case, the main creditors are the pensioned teachers and Banco Popular. Banco Popular’s debt is at an estimated $11.1 million for loans, and what is allegedly owed to pensioned teachers is estimated at $4.7 million.