FORT WORTH, Texas — In a move that surprised Episcopalians around North Texas, All Saints Episcopal Church declared bankruptcy on Wednesday. The 75-year-old institution was at the center of a property dispute hearing in the 141st District Court. 

What You Need To Know

  • All Saints Episcopal Church of Fort Worth declared bankruptcy on Wednesday morning

  • The move came moments before a contempt of court hearing was set to begin, of which All Saints was one of two parishes accused of withholding property

  • All Saints is one of six churches that recently lost its property to a conservative splinter group that was awarded the buildings in April by the Texas Supreme Court

  • Declaring bankruptcy triggered a stay of the hearing, but attorneys for the Episcopal Diocese of Fort Worth, the splinter group, believe that the bankruptcy declaration is invalid and the contempt hearing should proceed

All Saints was one of six local parishes forced out of their buildings in April. The Texas Supreme Court awarded their property, along with more than $100 million of other Episcopal Church properties, to a splinter group that left the Episcopal Church in 2008 over disagreements about ordaining women and including LGBTQ people in the full life and ministry of the church. The dispute between the two factions has been simmering for more than a decade.

In addition to property, the splinter group was awarded the name The Episcopal Diocese of Fort Worth, though it is affiliated with the Anglican Church In North America. It is not part of The Episcopal Church, though the diocese uses the name. 

The former Episcopal Diocese of Fort Worth is now named The Episcopal Church in North Texas. This includes all the congregations that have been in the diocese since the split in 2008, including the six parishes that lost their buildings.

The Episcopal Diocese of Fort Worth sued the rectors of All Saints and Saint Luke’s in the Meadow — two of the six congregations that lost their buildings — claiming those churches were withholding property the courts awarded to the diocese in April. Though all of the land owned by the six churches has been handed over, the diocese is also staking claim to money collected on behalf of the church and various other pieces, such as statues and books.

The Rev. Karen Calafat of Saint Luke’s and Rev. Christopher Jambor of All Saints were the only two people named in the contempt of court lawsuit.

Earlier in the week, at least two of the six parishes, including All Saints, found their bank accounts had been frozen at the request of the diocese, and without approval from the churches that no longer had access to their funds.

People familiar with the case said that attorneys for the diocese are claiming that at least part of that money is owed to the rightful Episcopal Diocese of Fort Worth, since many people intend to donate to the Episcopal Church, not an individual parish no longer associated with it.

A spokesperson for the Episcopal Church in North Texas said they have complied fully with frequent requests from the diocese.

At the Zoom hearing on Wednesday, both the judge and attorneys for the diocese appeared surprised and frustrated by All Saint’s move to file for bankruptcy. The move triggered an automatic stay from the contempt hearing. Judge John P. Chupp, a Fort Worth Republican, indicated he might sever All Saints from the suit before him that morning. He told the smattering of people present for the trial that the initial property dispute will be delayed at least a week.

Chupp has frequently sided with the dioceses in his decisions. A move to federal bankruptcy court would likely give All Saints a better chance of holding onto any disputed property.

In a statement from Wednesday, a spokeswoman for the dioceses told Spectrum News 1 that its attorneys found a legal technicality that might keep All Saints in the contempt of court suit.

“Today’s scheduled hearing was abruptly canceled when the surprise bankruptcy filing was shared with the court,” wrote Suzanne Gill. “However, it was not All Saints’ Episcopal Church but rather its corporation that submitted the filing. As our attorney’s letter makes clear, the corporation has never at any point been a party to the litigation now being concluded before the 141st District Court. Therefore, we are asking for another hearing date in order to proceed as originally planned with motions that were filed to compel the Plaintiffs to surrender property and funds awarded to the Defendants.”

In a letter to the court, David Weaver, an attorney for the diocese, told Chupp that the court had been “mislead” by attorneys for All Saints.

“Based on the foregoing indisputable facts, it is clear that the Automatic Stay in Bankruptcy does not apply to the referenced lawsuit,” Weaver writes. “Accordingly, the Movants in the three Motions that were to be heard this morning respectfully request that the hearings be re-set at the Court's earliest availability.”

An attorney for All Saints did not return emails in time for publication of this story.

EDITOR'S NOTE: This story was updated to clarify that the Episcopal Diocese of Fort Worth is not a part of the national Episcopal Church. A detail was also added to reference that The Episcopal Church in North Texas is composed of more than just the six churches that lost their buildings in April. (Oct. 22, 2021)