NEW ORLEANS (LA)
Times-Picayune [New Orleans LA]
May 24, 2025
By Stephanie Riegel
Two days after a tentative settlement with survivors of clergy sex abuse was announced in the Archdiocese of New Orleans bankruptcy, Archbishop Gregory Aymond made a rare court appearance Friday at a hearing over whether to extend the appointment of a key mediator in the case who helped broker the recent agreement.
Aymond did not speak during the 90-minute proceeding, in federal bankruptcy court in New Orleans, though he said after the hearing that he attended because he “wanted to be a part of the process” and is praying for abuse survivors and their healing.
He is optimistic for a resolution in the long-running case, perhaps as soon as the end of the year, he said.
The archbishop’s presence at what would typically be a routine matter underscores the critical juncture in the court battle that has consumed the local Roman Catholic Church for the past five years.
It also points to the challenges the church faces as it tries to get the proposed deal — which would pay abuse survivors nearly $180 million over five years and entitle them to additional money from insurers and property sales — over the finish line.
Though the tentative deal was negotiated by the court-appointed committee that represents the 600 or so abuse survivors in the case, it is opposed by a vocal group of plaintiffs lawyers, who represent individual survivors, perhaps as many as half of the total.
They are trying to get the bankruptcy case dismissed, which would open the door for them to sue the church in state court. They also have said the proposed settlement falls short of what survivors deserve. In order for the settlement to be approved, two thirds of all the survivors must vote to approve it.
In court Friday, the lead attorney for that group asked U.S. Bankruptcy Judge Meredith Grabill not to extend the appointment of the mediator, retired bankruptcy Judge Christopher Sontchi, saying he acted irresponsibly in negotiating a “secret deal” without their support.
“This plan is dead on arrival. It doesn’t have the votes,” attorney Soren Gisleon said. “We have lost trust in Judge Sontchi.”
Grabill extended the appointment of Sontchi and that of another mediator in the case, John Perry, through July, clearing the way for the high-stakes talks to resume.
“This case has to continue to move,” Grabill said. “It is going to require a lot of hard work.”
‘Something to build on’
Much of the hard work will involve filling in the details of what, so far, are only the broad outlines of a settlement. According to court documents filed Wednesday, the archdiocese has agreed to pay $179.2 million into a trust that would be distributed to survivors over several years.
If the amount were divided evenly among all the claimants, each would receive nearly $300,000 on average, though, as a practical matter, claims in such cases are evaluated individually, and the amount claimants receive would vary.
The bulk of the settlement would come from the archdiocese, its 110 parishes and some of its charitable organizations. Collectively, they have agreed to contribute $130 million in the first year and kick in $5 million a year over the next four years for a total of $150 million.
Additionally, three of the church’s four insurance companies have agreed to contribute $29.2 million. A fourth company, Traveler’s Insurance, has not agreed to the proposal, which means, at least in theory, that survivors could recover additional dollars from successfully suing the company.
Still more funds would be added to the trust from the sale of Christopher Homes, a portfolio of 15 apartment complexes for low-income elderly residents. Attorneys told Grabill on Friday that they are still working on the sale of the portfolio and could not estimate how much that might add to the pot.
Some estimates have put the value of the properties at $150 million, not including $60 million in debt that would have to first be repaid.
“This is far from over but this is a starting point,” said James Stang, the California-based attorney who represents the committee that negotiated the settlement. “But this is something that can be built on.”
What does it mean for parishes?
While many details of the plan are unknown, one element of the proposed agreement coming into focus is the role individual parishes will play. They would be placed, as a group, into a “mini bankruptcy” of their own, attorneys said Friday.
The procedure would be designed to shield the parishes, which are not technically in bankruptcy themselves but are co-insured under the archdiocese policies, from future state court lawsuits alleging past abuse.
The approach is modeled after that of another long-running and contentious church bankruptcy case, the Diocese of Rockville Centre in New York, which was successfully settled in December after nearly five years.
Experts say, as a practical matter, the “mini bankruptcies” are a procedural matter that involve a lot of paperwork but would not affect daily operations at parishes or the ability of the parishes to pay bills.
”It is not going to mean anything to Mary Queen of Angels or any other parish,” said Marie T. Reilly, a law professor at Penn State University and one of the most respected experts on church bankruptcy cases in the U.S. “It’s not going to last longer than a day or two and the parish cases will be resolved by confirmation on the same day that the overall plan is confirmed.”
The approach would, however, require parishes to contribute to the settlement. A spokesperson for the archdiocese said it’s too soon to say how much each parish would be expected to give or how that amount would be determined.
In Rockville Centre, parishes contributed a total of $53 million to the $323 million settlement. Some parishes kicked in as much as six figures. One wealthy parish ponyied up $1.4 million, reports show.
Still, Reilly said the Rockville Centre case is “a big success story.”
“It was at an impasse like New Orleans, with everybody at everybody’s throat,” she said. “They resolved it successfully.”
Shifting alliances
Resolving the local case successfully will require hammering out details that a super majority of survivors can support. That will be difficult in a case where alliances are shifting. Friday’s hearing illustrated how the lines have been redrawn in a court battle that, for much of the past five years, has been between the archdiocese and attorneys for abuse survivors.
Now, it’s between various groups of attorneys representing survivors with different interests.
Attorneys for the court-appointed committee of survivors, who have been on the front lines negotiating the settlement on behalf of all survivors, are trying to make the proposed settlement work. If not, the case gets dismissed after five years and $45 million in legal fees.
Under such a scenario, some survivors would be able to go to court and try their cases. Many others wouldn’t be able to — it if they even wanted to. Regardless, such a process would take years.
On the other hand, some survivors’ lawyers have said their clients want the case dismissed. Still others, are open to a settlement but believe their clients are entitled to more money.
Reilly said the competing interests and various factions are not uncommon in mass tort bankruptcies, like those filed by churches and the Boy Scouts of America. But the factionalism has the potential to complicate matters in the months to come.
“To get this plan confirmed, you have to get the support of the creditors and the louder and more recalcitrant those state court lawyers, who represent them, the more difficult it will be,” she said.
Email Stephanie Riegel at stephanie.riegel@theadvocate.com.