NEW ORLEANS (LA)
Nola.com [New Orleans, LA]
October 30, 2025
By Stephanie Riegel
The vote is one of the final steps as the church seeks to emerge from bankruptcy after more than five years.
Top of FormBottom of FormClergy sex abuse survivors have overwhelmingly approved a $230 million bankruptcy settlement with the Archdiocese of New Orleans, potentially clearing the way for the local Roman Catholic church’s long-running case to be resolved by the end of the year.
According to court documents filed Thursday, 99.6% of all creditors in the case who submitted ballots during a six-week voting period, which ended Wednesday, voted in favor of the settlement.
Those creditors are divided into several groups or “classes”: more than 650 abuse survivors, a group of vendors and small businesses, and the bondholders owed some $30 million by the archdiocese.
Bankruptcy law states that two-thirds of all votes cast within each class must be in favor of a settlement in order for the court to confirm it.
While the abuse survivors and trade creditors overwhelmingly cleared that bar, the bondholders voted against the plan by a vote of 59 to 14, court documents show.
Their opposition was not unexpected. Bondholder attorneys have argued for months that the proposed settlement, which initially would have paid them $3 million of the $30 million owed, was unfair.
Court documents filed Thursday show an updated version of the settlement is now offering to pay them $7.2 million over 12 years.
“The results are unequivocal: 99.63% of creditors who submitted ballots (excluding the Bondholder class) voted in favor of the Joint Plan, which carried every single class except (the bond claims),” according to court documents filed by attorneys of the archdiocese. “Bondholders stand alone in opposition to a plan that materially improves their treatment.”
The bondholder opposition is expected to complicate a confirmation hearing in U.S. Bankruptcy Judge Meredith Grabill’s court, scheduled for late November, setting up what is known as a “cramdown” process.
The archdiocese did not respond to a request for comment on the vote.
‘Overwhelming support’
The latest developments come more than five years after Archbishop Gregory Aymond placed the archdiocese under Chapter 11 bankruptcy protection amid a growing number of clergy sex abuse claims. At the time, nearly 40 lawsuits had been filed against the local archdiocese.
In the years since, more than 650 abuse claims have been filed with the bankruptcy court and the case now ranks as one of the longest-running and expensive of more than 40 church bankruptcies around the U.S.
Attorneys’ fees alone top $50 million.
In July, the archdiocese and the court-appointed committee that represents abuse survivors filed a joint settlement plan, since updated several times, that would create a trust from which survivors would be paid $180 million over several years.
The plan would be funded by the archdiocese, three of its settling insurers and its affiliated parishes and charities. An estimated $50 million would be added to the settlement following the anticipated sale of Christopher Homes, the church’s low-income senior apartment complexes.
The plan would also establish stricter protocols and reporting measures designed to protect children from future abuse.
In early September, a group of attorneys that represent as many as one-third of the abuse survivors dropped their opposition to the settlement. Their support helped ensure the necessary supermajority of survivors voted to accept the plan.
Another key group in the case, the “commercial committee” that represents vendors and small businesses, also came out in support of the plan.
At a status conference Thursday afternoon in Grabill’s court, attorneys for the archdiocese and the survivors committee both praised the strong support for the plan reflected in the vote count
“Your honor, there is overwhelming support for this plan,” archdiocese attorney Mark Mintz said.
Final vote tallies will be filed into the court record next week.
“This is a remarkable place we are in,” said Bradley Knapp, an attorney with Troutman Pepper Locke, which represents the survivors committee.
‘Illusory offer’
At Thursday’s hearing, attorneys for the bondholders continued to object to the plan and asked Grabill to delay the confirmation hearing, scheduled to begin Nov. 29, so they could resolicit the bondholders and let them vote again on the latest revisions.
Bondholders who lent the church $40 million in 2017 to help refinance parish debt have since been repaid about 25% of the outstanding balance.
Earlier versions of the settlement would have paid them $3 million over 10 years. The latest version of the plan would pay them $7.2 million over 12 years plus give them title to $13 million worth of surplus church property.
An attorney for the bondholder trustee said the revised plan is worse for his clients because it doesn’t include interest rates to account for the fact that $7.2 million in 2025 dollars will be worth less than that in 12 years and also because the surplus church real estate is potentially worthless.
“We are not intending to take the debtors’ property it doesn’t want,” attorney Christopher Marx said. “It is an illusory offer being made to paint us in a certain light.”
Grabill denied Marx’s request to resolicit the vote or delay the upcoming confirmation hearing.
“We are not in re-solicitation world,” Grabill said. “I am not willing to reopen discovery. I am definitely not willing to resolicit. That would be a fruitless endeavor.”
Cramdown
The opposition from the bondholder class has set up what is known in bankruptcy law as a “cramdown” scenario, meaning plan proponents will ask the court at next month’s confirmation hearing to force the bondholders to accept it.
At the hearing, Grabill will have to determine whether the plan meets several criteria that would justify her approving it over the bondholders’ objections, Penn State Law Professor Marie T. Reilly, a church bankruptcy expert, said earlier this month.
Those criteria include whether the plan has been proposed in good faith, satisfies the financial interests of the bondholders and is “fair and equitable.”
Among the specific issues bondholders are focused on is how the plan proponents and their financial advisers arrived at the value of church real estate. They are also challenging the way financial consultants determined the value of an abuse claim.
Email Stephanie Riegel at stephanie.riegel@theadvocate.com.