This article from Angelus tells of the the July 1, 2025, bankruptcy filing of the Catholic Diocese of Fresno, California.  The article makes this comment about the filing:

In the Chapter 11 petition — filed July 1 in U.S. Bankruptcy Court for the Eastern District Court of California, Fresno Division — diocesan chief financial officer Cynthia Martin said that the “volume of lawsuits” puts the diocese “in immediate, dire financial distress,” with the diocese’s “total exposure … likely to exceed its assets.”

The bankruptcy filing would suggest that all assets of the diocese may have to be used or liquidated to pay for liabilities, however, the article also made this statement about some of those assets:

In a separate July 1 letter, provided in both English and Spanish, Bishop Brennan described the implications of the bankruptcy on the diocese’s cemeteries, of which there are at least five.

While the cemeteries are owned and operated by the diocese, “regardless of the Chapter 11 filing, the Diocese of Fresno will continue to own its cemeteries and fulfill its obligations to the Faithful under the terms of both its paid-in-full and financed pre-need contracts,” wrote Bishop Brennan.

Although the contracts are included in the bankruptcy schedules, the diocese plans to file a motion to assume them, and expects no objection, he said.

“Throughout the Chapter 11 proceeding, Catholic funerals and burials will continue uninterrupted as if no bankruptcy had been filed,” Bishop Brennan said in his letter, asking clients to continue their contractual cemetery payments.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I write this column today just to comment on what I might say of business and legal issues in the United States.  To me, it just seems that you have to take an attitude of “you just never know”.

For instance, the diocese is probably correct in assuming that a court will maintain that the church body continuing to operate the cemeteries is a good result for preneed consumers and lot owners. . .and possibly the best result for the congregations.  However, I’ve never been one to count on probable assumptions.  What if some other group puts in a bid to purchase the cemeteries out of bankruptcy or what if the plaintiffs win judgements that can only be satisfied by the sale of the cemeteries?  Who will operate the cemeteries then. . . . and, depending on the jurisdictions laws, what might happen to consumer pre-arrangements?

It’s just a cautionary statement by me that when you are in business it is best to assume that things won’t always be as you think they will be.  Things change over the years and as a business person you need to change your operations at times to “go with the flow”.

More news from the world of Death Care:

Life insurance questions seniors should be asking in today’s economy.  MSN

Cemetery faces financial strain as cremations rise.  BBC News (Great Britain)

Defense Department reviews process for handling remains of fallen warriors.  Department of Defense Information Distribution Service

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“A servant’s attitude guided by Christ leads to a significant life”

It has been pretty well publicized that former President Donald Trump may have assets seized by the State of New York to satisfy a judgement recently decided against his companies.  Turns out that is not the only siezure battle by a state against against someone as you can see from this article in the Vallejo Sun that the State of California is proceeding in an effort to seize about $50 million of trust funds set aside for cemetery mainenance.

The article points out that the State of California has already asked the operators of the cemeteries in question to surrender their licenses to manage cemeteries and are now proceeding in an action for the trust funds.  And, as you can see from this more recent February 2024 article, the cemeteries in question are being accused of being negligent in the upkeep of the cemeteries according to people who have family members buried there.

Make sure that you read the articles because there are a lot of plot twists already.  They include:

• “Questionable distributions” from cemetery funds, including about $1.35 million in payments to two companies managed by the cemetery owners and over $50,000 in cemetery funds purportedly used to pay for taxes in locations where the cemeteries did not operate

• A petition of over 1,500 people calling the conditions of at least one of the cemeteries ““disgraceful” due to the presence of weeds, gopher holes, unwatered grass, and buried headstones.

• An attempt by the owners to transfer over $50 million in trust funds to a religious nonprofit corporation called Evergreen Ministries, which now operates the cemeteries. Officers of that group are essentially the same that control the cemeteries today.

• Families of Jewish-faith people buried at a cemetery in question say that the transfer of what once was a secular cemetery with a Jewish section to a non-Jewish religious organization is “deeply troubling,”

Funeral Director Daily take:  This is truly one of those stories that if you included it in a fictional novel the story would be far-fetched to be believable.   What’s the old standard line? . . . .”You can’t make this stuff up“.  That line, in my opinion, is very true with this situation.

While this is an interesting story, it certainly is not unique when it comes to who holds and controls cemetery perpetual care trust funds.  And, I think we are bound to see more of these stories.

In my area of Minnesota there are hundreds of small country churches that have, or are being decommissioned, because there are just no longer small farms with families operating in the area to populate the churches.  Most are kept up by well-meaning and volunteer-minded individuals for the benefit of the cemeteries on the church grounds.  Taking some amount from the pepetual care funds to do this is what those perpetual care funds were designed for.

However, as families have left the area with their ancestors buried in these cemeteries they have donated to the perpetual care funds in order to have an ample “perpetual endowment” for the future.  In some cases those perpetual care funds have became quite large.

There are what I term “opportunist ministries” in our society who are on the look-out for these type of small parishes and offer to re-open the church to re-build the congregation, but many also have a suspected motive of getting their own church board in place and then being able to access the cemetery’s perpetual care fund for their own benefit. . . .such as paying out large stipends to board members until the fund is exhaustive.

In many states religious organizations are exempt from state or other governmental oversight on how they handle their endowment or cemetery funds.

Here’s an article entitled, “Is this the future of small rural cemeteries?” that Funeral Director Daily did on this topic almost two years ago.

More news from the world of Death Care:

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“A servant’s attitude guided by Christ leads to a significant life”

The California attorney general filed a lawsuit earlier this month against the Neptune Society, alleging $100 million was “swindled” from customers who prepaid for cremations.

California Attorney General Xavier Becerra and three Bay Area prosecutors claim that the Neptune Society and its subsidiary Trident Society broke state laws by failing to hold more than $100 million in a fully refundable trust for customers who signed up for prepaid cremation services.

The lawsuit alleges that the Neptune Society should have kept the money in reserve for  prepaid cremation customers.

“As a result, many of the company’s customers failed to get full refunds if they canceled their contracts, and thousands of other prepaid customers could also lose their money if they cancel,” said a recent story in the Los Angeles Times.

The story reported that the well-known company also falsely claimed to use its own crematoriums when in fact it contracted with others and illegally accelerated payments when customers died, among other misleading business practices.

The company is “swindling customers who were simply trying to look out for their families and prepare for one of life’s most difficult moments,” the attorney general said in a statement.

Beth Dombrowa, a spokeswoman for Neptune and its parent company, Texas-based Service Corp. International, said she could not immediately comment, the L.A. Times reported.

The lawsuit claims that “the Service Corporation International subsidiaries deceive purchasers of a standard package of cremation and merchandise, typically costing $2,500, by leading them to believe that all of their money is refundable.”

The suit alleges Neptune steered 99% of customers to its Standard Neptune Plan, which included both cremation services and related funeral services “products” but then illegally kept about half the money because it was earmarked for products

Neptune thus deceived consumers who thought all their money was protected, as required by California law, the lawsuit claims.

“Consumers should expect the money paid toward future funeral needs will be fully protected and available to pay for the necessary services when the need ultimately arises so family and loved ones are not further burdened,” Marin County Dist. Atty. Lori Frugoli said in a statement, the L.A. Times reported.

Service Corp. International and its subsidiaries are North America’s largest provider of funeral, cremation and cemetery services, including in the Metro Vancouver area.

The lawsuit noted that nearly two-thirds of people in California choose to be cremated, with many choosing to prepay for those services through companies such as Neptune.

The suit seeks civil fines and court orders requiring Neptune and Trident to put the full amount of money collected in the past into trusts and to stop the allegedly deceptive practices.

Neptune Society was established in 1973 in Florida and was purchased by SCI in 2011. It is known as Trident Society in six California locations.

At Sept. 30, of this year, Service Corp. International says it owns and operates 1,477 funeral service locations and 483 cemeteries in 44 states, eight Canadian provinces and Puerto Rico. It markets its services under the “Dignity” brand.

SCI was founded in 1962 by Robert L. Waltrip, a licensed funeral director who grew up in his family’s funeral business; he still serves as chairman of  SCI’s board of directors.

Both SCI and Neptune Society have faced numerous lawsuits in the past.

In 1988, Neptune Society reached a $32-million settlement involving 5,000 plaintiffs who claimed the cremated remains of their deceased relatives were “unceremoniously dumped” in the Sierra Nevada foothills.

In 2014, SCI and its Eden Memorial Park cemetery in California reached an $80.5 million out-of-court settlement with families who claimed the cemetery disturbed the remains of loved ones to fit more deceased in graves.

SCI also reached a $100-million settlement in 2003 involving a class-action filed by families who claimed the remains of their loved ones had been desecrated at two Menorah Gardens cemeteries in Florida.