The Catholic Church of Guam to declare bankruptcy?

Not very much at all, for the most part. The basic deal is that a religious order needs the permission of the diocesan bishop to set up in his diocese but, once they have set up, they operate pretty independently of him. They don’t work for him, they don’t report to him, they don’t take direction from him. If the bishop really doesn’t like what they are doing and can’t get them to agree to change it, the only sanction available to him is to ask him to leave his diocese.

It’s different if the operation they have set up is running one of his parishes, in which case the priests assigned to the parish will report to the diocesan bishop, and be subject to his control, in much the same way that regular parish clergy do. But if they set up a school, or a convent, or a university, or a seminary, or a hospital, or . . . well, anything, really, they work with the diocese to the extent that they and the diocese find mutually convenient, having regard to the nature of the work they are doing.

Parish clergy generally live in a house in the parish, usually convenient to the church, and are paid an allowance or salary. The house (like the church) belongs to the diocese or the parish. In theory each parish supports its own priests; in practice there’s a good deal of rebalancing going on so that all parish clergy get similar allowances regardless of the prosperity or otherwise of the parish they are assigned to.

Getting back to the corporate organisation issue, most of Canada has inherited the English common law, which included the concept of the “corporation sole”, meaning that a particular office can itself be a corporation, composed solely of the current holder of the office.

I understand that the Roman Catholic Church sometimes used this concept, where the “Bishop of So-and-So” is a corporation sole and that corporation owns all the diocesan property.

When the Bishop retires, dies, etc, the new Bishop takes over as the corporation sole.

Then why not sue the Vatican? Some sort of diplomatic immunity?

Basically. The United States offers sovereign immunity to foreign states except in commercial transactions (You loan them money and they don’t pay you back as an example.) That’s fairly typical in international law, largely because you don’t want the government forced into taking actions that are contrary to its long-term strategic goals just because a judge and jury got a bug up their butt about something. With the Vatican, it’s not as big of a deal since they can’t really do anything anyway, but imagine that some jury gives Bob Smith a ten trillion dollar judgement against the Chinese government for patent infringement on his widget machine and we have to start confiscating their assets. Those are the kinds of things that lead to war. One hopes that appeals and such would preclude such a thing, but sovereign immunity ensures that those types of things don’t happen.

I don’t think it’s that cut and dried.

The Pope as head of the micro-state of Vatican City can claim sovereign immunity.

Not so sure that the Pope, wearing a different biretta as pontiff/head of the Catholic Church, can equally claim sovereign immunity for personnel changes in a diocese that is not part of Vatican City, and is not part of Vatican City diplomatic representation abroad.

Actually goes further than that – often each parish is often a separate legal corporation. Not really independent, but legally separate.

Here in Minnesota, the Minneapolis-St. Paul diocese filed for bankruptcy, due to a settlement for child sexual abuse. But they were given months to organize this, and they managed to hide much of their assets away by splitting them up and putting them in the name of the various parishes. The individual parishes could be sued also, but that’s harder to do:

  1. You would have to sue each one individually, increasing legal costs.
  2. It’s harder to prove for an individual parish; in particular the ‘pattern’ of moving abusive priests from parish to parish can’t be used, since it is the diocese, not the parish, doing that.