New Orleans Catholic diocese ordered to defend bankruptcy case from dismissal
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 in June and show why its five-year-old bankruptcy case should not be dismissed.
Judge Meredith Grabill's order suggests little concrete progress has been made since 13 September 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 $2m per claimant.
Grabill issued the order on Monday, just three days before the fifth anniversary of the archdiocese filing for Chapter 11 bankruptcy protection on 1 May 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 26 June to show why the case should not be dismissed, which would force the church to face potentially hundreds of separate lawsuits individually in civil court.
The judge has expressed frustration with the lack of progress before, as the legal fees paid by the church to pursue bankruptcy protection ballooned to more than $41m.
The church issued a statement saying there were 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 wide 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.'
In the US, call or text the Childhelp abuse hotline on 800-422-4453 or visit their website for more resources and to report child abuse or DM for help. For adult survivors of child abuse, help is available at ascasupport.org. In the UK, the NSPCC offers support to children on 0800 1111, and adults concerned about a child on 0808 800 5000. The National Association for People Abused in Childhood (Napac) offers support for adult survivors on 0808 801 0331. In Australia, children, young adults, parents and teachers can contact the Kids Helpline on 1800 55 1800, or Bravehearts on 1800 272 831, and adult survivors can contact Blue Knot Foundation on 1300 657 380. Other sources of help can be found at Child Helplines International
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