Catholic asset-stripping coming unstuck

It's standing room only in courtroom eight of the Supreme Court of Victoria on Friday morning, where an audacious plan to limit the cost to the Catholic Church of decades of sexual abuse by some of its worst offfenders is about to collide with state laws designed to keep the church on the hook.

At stake are payouts for decades of victims of abuse at the hands of the Christian Brothers, a lay order – they're not priests – notorious for both the extreme cruelty it meted out to boys at its schools and institutions and for the extreme wealth of their landholdings.

But in a corporate restructuring of the Christian Brothers, likened by furious lawyers and victims' advocates to the infamous gutting of James Hardie, the order has since 2013 spun much of its school land off to another entity, which paid as little as $1 per property.

Its remaining assets have been drained by the pressing weight of sex abuse claims – it is estimated that as many as one in five boys who passed through the Brothers' clutches were abused – and last week it proposed putting seven entities into a scheme of arrangement that, given the order's grim financial situation, would pay creditors much less than 100c in the dollar.