New Orleans Archdiocese Seeks Sept. 29 Deadline for Abuse Claims, Survivors to Fight for More Time

By Ramon Antonio Vargas
NOLA.com
July 2, 2020

https://www.nola.com/news/courts/article_ad3d01f6-bc97-11ea-9ccb-631a57f8cb22.html

The Archdiocese of New Orleans asked a federal judge late Wednesday to require anyone with clergy abuse claims against the local church to come forward by Sept. 29, almost certainly setting up the next legal dispute in the church’s two-month-old bankruptcy case.

U.S. Bankruptcy Judge Meredith Grabill did not immediately rule on whether to make Sept. 29 the so-called “bar date,” which is expected to prompt many more remaining claimants to file complaints of abuse and demands for compensation. That date would also stand as the deadline for other entities to claim debts from the church that predate its May 1 filing for Chapter 11 bankruptcy protections, except for government agencies, for whom the church requested a couple of extra months.

In its 21-page request to Grabill, church attorneys argue that bankruptcy procedures allow for bar dates to be set 90 days after the date of the first meeting for the committee representing creditors’ interests. The church says the end of that 90-day window in this case is Aug. 27 but believes “believes that providing an extra 32 days will provide sufficient notice to known and unknown creditors while striking an appropriate balance of moving this bankruptcy case forward at an appropriate speed.”

“The setting of a bar date is an important step in providing the (church) with the information it needs to formulate a plan and eventually conclude this bankruptcy proceeding,” attorneys for the church also say.

An attorney for a committee of creditors in the case, most of whom are clergy abuse survivors, said Thursday that a bar date just three months into the future was “unacceptable.”

Jim Stang, who’s represented clergy abuse victims in more than a dozen church bankruptcies, said in his experience bar dates are on average set for six months after various claim-related forms are approved. Assuming that process in this case ends in August, a reasonable bar date would be February of next year, he said.

Stang, who also represented survivors of the USA Gymnastics sex abuse scandal, noted that the bar date in the Diocese of Rochester’s bankruptcy was set nearly a year out from the case’s September 2019 filing.

The archdiocese, which has avoided discussing its bankruptcy out of court, didn’t immediately respond to a request for comment on the timeline for claims.

Bar dates are standard in bankruptcy proceedings, which are usually meant to allow financially troubled entities to address all of their claims and start anew with a clean slate. Still, in most corporate bankruptcies, claimants are typically creditors, customers or other vendors with a business relationship to the company in bankruptcy. Church proceedings often involve scores of claimants dealing with the wrenching trauma of having been abused by priests and other clergy as children.

Notably, the archdiocese’s attorneys explain that their request came one day after Stang’s side indicated it would ask Grabill to dismiss the bankruptcy. Stang on Thursday confirmed that was true but declined to discuss the grounds to request a dismissal from Grabill.

The move, if filed soon, would come a little more than a month after the archdiocese’s Vicar of Finance, Patrick Carr, testified at a hearing that the local church would be solvent without the Chapter 11 bankruptcy — or “reorganization” — protections.

Carr’s testimony echoed statements he and Archbishop Gregory Aymond made when they met with news media reporters hours after the bankruptcy filing.

That day, the pair said the church needed to file for bankruptcy protections because the cost of litigating numerous clergy abuse claims and shutdowns associated with the coronavirus pandemic had dealt crippling blows to the finances of archdiocese’s administrative offices. They said it was the only way the church could settle its debts without compromising its ministry to a half-million Catholics in the New Orleans area.

Clergy abuse advocates have rejected those explanations, contending that the bankruptcy’s goal was to halt numerous pending lawsuits that had produced revelations that were embarrassing to the church.

One suit turned up emails establishing that the New Orleans Saints and Pelicans sports franchises had given what the organizations called public relations advice to the archdiocese as church officials prepared to release a November 2018 list of priests and deacons deemed "credibly accused" of child sex abuse. The emails between the church and the teams — owned by Aymond’s close friend Gayle Benson — remain under seal.

Evidence in another suit detailed the church’s practice of providing priests with financial support for living expenses even if abuse claims had forced them to retire years earlier. Grabill ordered a halt to such payments in May.

Meanwhile, molestation survivors’ advocates have noted, the bankruptcy filing indefinitely postponed a May 28 deposition of Aymond, who was expected to face questioning over the archdiocese’s handling of the decades-old clergy abuse crisis.

There have been moves to dismiss bankruptcy cases after they got underway elsewhere.

In one such instance, in 2007, before a judge ruled on whether to dismiss the Diocese of San Diego’s Chapter 11 bankruptcy due to fiscal irregularities, the church reached a $200 million settlement with victims.

And, in March 2018, the Diocese of Great Falls, Montana, moved to dismiss the bankruptcy case it filed a year earlier, saying it was draining resources that could instead be used to make abuse victims whole. A few months later, the diocese reached a $20 million settlement with survivors.

Grabill has tentatively set the next hearing in the New Orleans archdiocese’s bankruptcy case for July 16.