The former Milwaukee archbishop was schedule to move to a Benedictine abbey in September, but the abbot rescinded the invitation because "he did not think it was a good time."
Lawyers have asked the appeals court to remove a judge's decision, saying that the concern was for "his endorsement of the religious faith."
The Milwaukee branch of the Society of St. Vincent de Paul wants to borrow $3.2 million for a thrift store critics say is far from those who need it most.
There are still major hurdles before the Milwaukee archdiocese's bankruptcy plan is presented for a vote by claimants, of whom 575 are survivors of sexual abuse.
For 30 years, the Milwaukee archdiocese has provided therapy for abuse victims. But survivors are unhappy with how therapy will be handled under the new plan.
The claimants' lawyers also asked the bankruptcy judge not to rule on the plan until an appeals court rules on the status of a hotly contested cemetery fund.
The Milwaukee archdiocese will walk away from bankruptcy relatively unscathed if its proposed reorganization plan is accepted by Judge Susan V. Kelley.