New Orleans Archdiocese Sexual Abuse Lawsuit: “A Settlement Is Near”

KATC News Channel 3 reported earlier today that the Archdiocese of New Orleans says it has reached a key agreement with the bond trustee in its long running bankruptcy case, signaling that a final settlement with survivors of clergy sexual abuse is approaching. The announcement marks a major development in a process that has stretched more than five years.

Archbishop Gregory Aymond said, “This is a matter of justice. We must pay our debts. I believe this is the just way to move forward for the good of survivors and the local church. We thank the faithful for their prayers for the past five years and continue to ask for prayers for the survivors of abuse. We trust that through the mercy and love of Jesus Christ the Archdiocese of New Orleans will move forward to continue sharing its mission of sharing the Gospel.”

The Archdiocese filed for Chapter eleven bankruptcy in May 2020 as settlement costs for hundreds of survivors of clergy who sexually abused children and parishioners continued to rise. According to reporting from the Times Picayune, bondholders were owed nearly $30 million on a $40 million loan the Archdiocese secured in 2017 to refinance parish debt and had been opposed to the plan up for confirmation before U.S. Bankruptcy Judge Meredith Grabill. That plan would establish a $230 million trust to compensate survivors and implement new abuse prevention and reporting measures. Survivors overwhelmingly support the proposal.

Church representatives said the new agreement clears “a major hurdle” thanks to the prayer and work of Archbishop Aymond and his advisors. They emphasized that, despite the progress, the Archdiocese remains focused on survivors as the case moves toward resolution. The release noted that all sides expressed gratitude that the agreement allows bondholders to be paid under mutually acceptable terms.

According to the statement, “The Official Committee of Unsecured Creditors (the Survivor Committee) is pleased that the Archdiocese and the Archbishop have resolved their disputes with the Bondholders to pave the way for confirmation of the Joint Plan in the interests of just treatment and closure for abuse survivors.”

The confirmation hearing will pause for the Thanksgiving holiday and resume the following week, with closing arguments scheduled for December four. Across the United States, many dioceses and archdioceses have sought bankruptcy protection as they reach settlements with individuals abused by clergy. Most recently, the Diocese of Alexandria filed for bankruptcy.

For more news coverage of the New Orleans Catholic Church Sexual Abuse litigation, click here.