Clergy Abuse Survivors, Hancock Bank on Archdiocese of New Orleans Bankruptcy Creditors" Committee

By Ramon Antonio Vargas
Times-Picayune and New Orleans Advocate
May 20, 2020

https://www.nola.com/news/courts/article_5338fac0-9acd-11ea-8629-c39ec6a9019e.html

A committee representing the unsecured creditors in the Archdiocese of New Orleans’ bankruptcy case will include clergy abuse claimants and Hancock Whitney Bank, which has managed more than $38 million in state facilities bonds that helped the local Catholic Church rebuild after Hurricane Katrina.

Federal court records Wednesday only identified one representative on the seven-member committee: Beth Zeigler of Hancock Whitney. The rest of the names were redacted, suggesting that the committee’s balance might be comprised of people who claim they were sexually molested by New Orleans-area clergymen and religious personnel.

The records said a prior order from U.S. Bankruptcy Judge Meredith Grabill classifies the names of clergy abuse claimants as confidential information. But to facilitate the committee’s work, an attorney with the U.S. Trustee’s Office — which helps oversee bankruptcy cases — requested Wednesday that the redacted group members’ names be disclosed.

Those members consented to having their identities revealed, U.S. Trustee’s Office attorney Amanda George wrote in a court filing.

Along with the archdiocese, the committee of creditors will handle a flurry of new claims of sex abuse that are expected to roll in once Grabill sets a hard deadline — or “bar” date — for people to claim the archdiocese owed them before it filed for bankruptcy protections on May 1.

The church said steep financial fallout from several lawsuits alleging clerical child sex abuse as well as the coronavirus pandemic made it necessary to file for Chapter 11 bankruptcy. Chapter 11 bankruptcy allows organizations to restructure while shielding them from creditors’ demands.

Hancock Whitney topped an archdiocesan-supplied list of its 20 largest creditors at the time of the bankruptcy filing. The list did not enumerate any abuse claims.

Experts say more than two dozen bankruptcies involving Catholic institutions in other parts of the country have shown the creditors committee’s relationship with the church can become quite adversarial. Besides disagreements on the value of individual claims, the creditors committee and the church can also clash over the release of diocesan records outlining how Catholic bureaucrats administered credibly accused clergymen.

One other initial order from Grabill involved halting church payments to clergymen who retired in the face of credible abuse allegations. At least two such clergymen have filed petitions asking Grabill to restart the payments, saying they were cut off from payments promised to them under internal church law without having a chance to defend themselves.

Advocates for clergy molestation survivors, in turn, have asked Grabill to leave her order in place. They say the church, following its bankruptcy filing, has also cut off payments to abuse claimants whose therapy bills the church had agreed to cover.

John Denenea, a lawyer for more than two dozen abuse claimants, said Wednesday it would be “a shocking irony” to allow the church to pay suspected predator priests but withhold money from their prey.