Merrill Lynch freezes disputed San Joaquin diocesan accounts pending court ruling
Episcopal News Service. June 4, 2008 [060408-01]
Pat McCaughan, Correspondent for Episcopal Life Media in Province VIII
Merrill Lynch has frozen the financial accounts it manages for the Episcopal Diocese of San Joaquin until the courts decide the rightful owner of those accounts, an attorney for the financial institution said June 3.
"Merrill Lynch has placed an immediate freeze on those accounts held in the name of the Diocese and related entities," according to Eric J. Glassman of Mennemeier, Glassman & Stroud, in a letter to diocesan chancellor Mike Glass, and to Russell VanRozeboom, who represents former bishop John-David Schofield.
The San Joaquin diocese, along with The Episcopal Church (TEC), on June 2 amended an earlier lawsuit against Schofield, "on the basis of new information gathered about recent transfers of real and personal property and assets to entities formed by Mr. Schofield and his attorney sometime in early April of 2008," Glass said.
According to the amended complaint, Schofield had been transferring real property and investment accounts into a non-Episcopal entity called the Anglican Diocese Holding Company. The holding company was also added as a co-defendant in the June 2 amended complaint.
The original lawsuit, filed April 24 in Fresno County, seeks to recover from Schofield control of the diocese's "Corporation Sole," which holds title to most of the real estate of the diocese along with liquid assets valued at between $4-5 million in cash, as well as other diocesan entities such as the Diocesan Investment Trust.
Tuesday's action will not affect any of the assets, accounts, or operations of the continuing diocese, according to Nancy Key, communications director.
Schofield had announced his intention to retain diocesan property last December when he attempted to remove the Diocese of San Joaquin from TEC and to realign with the Argentina-based Anglican Province of the Southern Cone. After a Title IV Review Committee determined he had "abandoned the communion" of TEC and the House of Bishops gave its consent to his deposition, Presiding Bishop Katharine Jefferts Schori deposed him and removed him from the episcopate on March 12.
Bishop Jerry Lamb was elected at a special March 29 Convention of the Episcopal Diocese of San Joaquin and was formally seated as provisional bishop the same day.
Lamb said June 3 that he "is seeking an arrangement with Merrill Lynch that would allow staff purportedly working for Mr. Schofield to continue to be paid in hardship cases," according to a diocesan press release.
"We are working with financial institutions to minimize any financial hardship on their staff such as parish administrators, Lamb said. He added that: "This legal action is intended to insure that the assets given by faithful parishioners remain in the Episcopal Diocese of San Joaquin for its continuing ministry."