Lawyers for the federal government have expressed concern over what they describe as the “disturbing” possibility that the Christian Brothers Catholic order may have transferred property to another entity for a pittance years before claiming it was too broke to pay abuse survivors’ civil claims.

On Thursday, the New South Wales supreme court granted a moratorium on all abuse claims against the Christian Brothers, a Catholic order deeply entangled in the church’s child sexual abuse scandal. The order requested the halt, arguing it was going broke and wanted to establish a separate scheme to sell off its remaining property and divide the proceeds among creditors, including survivors.

The Christian Brothers estimates it owes $774 million to survivors with current or future abuse claims. It claims to have 36 remaining properties worth $216 million under its control. The moratorium gives survivors time to consider whether to support the order’s proposal.

But significant concerns have emerged about how the Christian Brothers transferred property - land, school buildings, and homes near former schools - to another entity, Edmund Rice Education Australia (EREA), over the past decade. Property records obtained by the Guardian show those transfers were made for $1 each, even for multimillion-dollar homes in Sydney. EREA, named after the founder of the Christian Brothers, was established in 2007 as an independent entity to take over former Christian Brothers schools.

In court, Sera Mirzabegian SC, representing the commonwealth, said the federal government was “concerned to ensure that institutions take responsibility for abuse [and] that they provide appropriate compensation.” She highlighted particular concerns about “historical asset transfers between the Christian Brothers and EREA” and whether they were “proper and appropriate.” It would be “obviously disturbing,” she said, if the transfers resulted in assets not being available to compensate survivors.

The court heard that the Christian Brothers’ proposed scheme would preserve the rights of creditors, including survivors, to pursue assets transferred to EREA. The order provided 15 pages of evidence about the property transfers, but Mirzabegian noted significant “discrepancies,” including about the value of the transferred land. “What is abundantly clear from that evidence is that it unfortunately raises more questions than it answers,” she said.

A Christian Brothers spokesperson previously told the Guardian the property was transferred as part of a slow, progressive process of turning over school land and property to EREA, delayed by the “complexity of transferring individual titles across multiple jurisdictions.”

Justice Scott Nixon ordered the moratorium on Thursday, halting claims against the Christian Brothers. Without it, he said, the opportunity to consider the scheme would be lost. The Christian Brothers has warned that if its proposed scheme is not supported, the order will go into liquidation, and survivors will likely receive even less.