The Sacramento Bee reports:
A federal judge found Friday that the Roman Catholic Diocese of San Diego misrepresented its finances and ordered it to explain why its bankruptcy case shouldn’t be dismissed.
U.S. Bankruptcy Judge Louise DeCarl Adler found the church undervalued real-estate holdings and failed to disclose “material facts” to the court. She named federal statutes that would allow the case to be dismissed on grounds of the diocese’s “gross mismanagement” and “unexcused failure” in its financial reporting.
The judge’s six-page order mentioned an independent auditor’s report filed last week, which detailed how individual parishes violated diocese policy and court orders by neglecting to deposit up to $22 million into a diocese account. The auditor also found that a handful of parishes deliberately hid money from the bankruptcy court.