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.According to a diocesan press release,
"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.
Merrill Lynch has frozen the accounts indefinitely until the Court issues a ruling on these issues. This freeze will not affect any of the Episcopal Diocese of San Joaquin's assets, accounts or operations.
The Diocesan Office in Stockton, California announced that it is seeking an arrangement with Merrill Lynch that would allow staff purportedly working for Mr. Schofield to continue to be paid in hardship cases.