NEW ORLEANS (LA)
WWL-TV [New Orleans LA]
April 28, 2025
By David Hammer
The judge has expressed frustration with the lack of progress before, as the legal fees paid by the church to pursue bankruptcy protection ballooned over $41M.
In a major development for the second-oldest Catholic diocese in the country, a US bankruptcy judge has ordered the Archdiocese of New Orleans to appear in court this June and show why its five-year-old bankruptcy case should not be dismissed.
Judge Maredith Grabill’s order suggests little concrete progress has been made since Sept. 13, 2024, when the archdiocese and a committee representing more than 500 clergy abuse claimants filed competing plans for settling the bankruptcy.
Those two plans were worlds apart, with the church offering to pay the survivors an average of $125,000 per claimant and the committee seeking an average of about $2 million per claimant.
The judge has expressed frustration with the lack of progress before, as the legal fees paid by the church to pursue bankruptcy protection ballooned over $41 million. But the church issued a statement Monday saying there are still hopes for settlement talks.
“While our attorneys will work to formally respond to the court’s order, we are pleased to have the opportunity to share our significant progress in negotiations to bring just and equitable compensation to the survivors and creditors while providing a sustainable path forward for the ministry of the Catholic Church to continue in our area,” the church statement said.
“Despite the unacceptable amount of time and money spent over the past five years, we believe resolution of these bankruptcy proceedings will be for the benefit of all survivors and creditors and the faithful of the Archdiocese of New Orleans,” it added.
The two sides have met several times for mediation and the court has hired three outside experts to help resolve the massive gap between the two sides, but Grabill wrote in her order “the Court views the two proposed plans on file as facially unconfirmable.”
She added: “The record in this case as it stands today shows that, after five years and millions of dollars expended, no coalition of parties has proposed a confirmable plan.”
Grabill issued the order Monday, just three days before the fifth anniversary of the archdiocese filing for Chapter 11 bankruptcy protection on May 1, 2020. The archdiocese sought the protection from mounting claims of child sexual abuse by priests and deacons spanning more than 60 years.
Grabill wrote the church must appear June 26 to show why the case shouldn’t be dismissed, which would force the church to face potentially hundreds of separate lawsuits individually in civil court.