Court Protects All Episcopal Property and Accounts During Appeal: Sets Six-Figure Bond, and Orders Monthly Financial Reporting from All Southern Cone Defendants

On October 20, 2011, the Hon. Judge John P. Chupp signed an order setting the terms of a $100,000.00 supersedeas bond and imposing injunctions designed to protect all of the historic Church property during the breakaway faction's appeal. See copy of the order to the right.

To stop execution of the February 8, 2011 Final Judgment against them, the Southern Cone defendants must post a $100,000.00 bond by November 20, 2011. The Court declined to adopt the breakaway faction's repeated assertion that $0 was the only permissible bond.

The Court also imposed the injunctions requested by the Episcopal Parties at the May 19 supersedeas hearing. These injunctions protect "all real and personal property," including all historic church buildings, trusts, endowments, and savings accounts, that were held by or for the Episcopal Diocese, its Corporation, its parishes and missions, and its other constituent entities as of November 15, 2008, plus any new property acquired by or through the protected property ("Episcopal Property"). The order applies to all 62 breakaway Defendants, from the individuals wrongly holding themselves out as Diocesan leaders to the breakaway factions from 48 congregations that wrongfully took and retained possession of Episcopal Property. Defendants must submit monthly financial reports to monitor their actions during appeal, to ensure that no further wrongful dissipation, transfer, or encumbrance of Episcopal Property occurs.

The order also prohibits the breakaway faction from using any Episcopal Property to pay the breakaway faction's attorney's fees or litigation costs without prior notice, hearing, and leave of court. And it prevents the breakaway faction from increasing the balance of indebtedness on the Jude Funding line of credit, or on any other debt that is purportedly secured by Episcopal Property, without prior notice and hearing.

The breakaway faction also remains bound by its March 14, 2011 Rule 11 Agreement with the Episcopal Parties to "preserve and safeguard all documents in their possession relating to bank accounts, endowments, trusts, investment accounts, investments, real, personal, or intellectual property, expenditures, income, finances, transactions, taxes, and any and all other [such] documents."

The Court's injunctions are effective immediately.

Chancellor Kathleen Wells noted that, "This order is yet another positive step to preserve the sacred property that has been accumulated over more than 170 years of Episcopal mission in this area and to hasten the day that this property is returned for the mission and ministry of The Episcopal Church."