After 1st bankruptcy hearing, Archdiocese of New Orleans is told whom it can, can’t pay for now

Times-Picayune / New Orleans Advocate

May 4, 2020

By Matt Sledge

A federal judge said Monday that the Archdiocese of New Orleans can keep its lights on, but she held off on other decisions as the first hearing of the archdiocese’s bankruptcy process turned into a skirmish between lawyers for alleged victims of sexual abuse and the church.

The archdiocese filed for Chapter 11 bankruptcy protection on Friday, citing the financial fallout from abuse lawsuits and the coronavirus pandemic. The move essentially kicks a multitude of lawsuits against the church out of state court and into a single federal case.

While the bankruptcy process continues, the church asked for approval to keep paying utility bills, salaries for hundreds of employees and insurance premiums.

Such requests are standard procedure at the time of a bankruptcy filing, but attorneys wrangled over them for more than two hours during a telephone hearing on Monday.

Accusers’ lawyers said the judge should order that no salary or pension payments be made to predator priests and demanded to know the archdiocese’s plan for using cash in one bank account.

U.S. Bankruptcy Judge Meredith S. Grabill said she would approve requests from the church to keep making utility and insurance payments. She also approved salary payments for nearly 800 full-time and part-time employees.

However, Grabill also said the church should not make salary or pension payments to employees who have been credibly accused of sexual abuse. The church in 2018 revealed a list of dozens of suspected predator priests.

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