Archdiocese of New Orleans offers $62 million abuse settlement; survivors ask for $1 billion

CNA Staff, Sep 17, 2024 / 11:35 am

The Archdiocese of New Orleans has proposed a bankruptcy settlement as part of its plan for addressing sexual abuse by clergy, offering a $62.5 million payout to victims of abuse even as the victims themselves are demanding hundreds of millions more. 

The archdiocese’s Chapter 11 plan of reorganization, filed last week in U.S. bankruptcy court, proposes a $50 million cash transfer from the archdiocese to a settlement trust, along with a $12.5 million payment from affiliated “non-debtor Catholic entities,” mostly parishes within the archdiocese itself. 

In a statement announcing the plan, Archbishop Gregory Aymond said the archdiocese’s “main priorities are to assist the abuse survivors on a path towards healing that includes fair and equitable compensation for them” while “creating a more financially sustainable archdiocesan ministry for the future.”

Acknowledging that there is “still much work to do,” Aymond said the proposal will nevertheless “allow us to move forward and begin to bring conclusion to these proceedings.”

In addition to the financial compensation, Aymond said the plan will include as-yet-undisclosed “nonmonetary covenants” that the archdiocese is “continuing to negotiate with the committee of abuse survivors.”

“These nonmonetary covenants are actions that we publicly pledge to take to continue our commitment to ensuring our parishes, schools, and ministries are safe places for all to grow in faith, be educated, and to participate in ministry,” the archbishop said.

The archdiocesan proposal is considerably less than the roughly $1 billion proposed by survivors of clergy abuse, the vast majority of which would be paid by insurers. That plan was filed at the same time as the archdiocesan plan.

Legal counsel for the abuse victims indicated to CNA that the archdiocesan proposal was insufficient.

Asked for comment on the archdiocesan plan, James Stang — a lawyer with the Los Angeles-based firm Pachulski Stang Ziehl & Jones that is representing the committee of abuse victims in the suit — responded: “The best comment on the archdiocese plan is the committee’s plan.” 

Stang said the bankruptcy court “will be required to approve a disclosure statement for any plan that goes out to creditors and survivors.” 

“Once approved, votes [from survivors and creditors] will be solicited and then the court will have a confirmation hearing,” he said. “The outcome of the vote may determine if the plan proponent wants to pursue confirmation.” 

“Once a plan is confirmed and depending on any appeals, the plan may go effective and funds will go to the settlement trust for distribution to survivors,” he said. 

Archdiocesan spokeswoman Sarah McDonald, meanwhile, told CNA that the archdiocese has “filed a very complete and feasible plan.” 

“With this filing and the filing of the committee’s competing plan, we will begin negotiations through the mediation process in the very near future,” she said.

The archdiocese has been working through the bankruptcy proceedings for nearly half a decade, having first applied for bankruptcy in May 2020.

Last year the archdiocese announced the “difficult and painful decision” to consolidate 11 parish communities, permanently close seven churches, and consolidate three territories in order to ensure sustainability and vitality.

In September of last year the archbishop said the archdiocese would be asking parishes, schools, and ministries for monetary contributions in order to protect their assets during the ongoing bankruptcy proceedings. 

Aymond had previously said that parishes and other archdiocesan affiliates would not be affected by the bankruptcy. 

Multiple dioceses in recent years have offered tens of millions of dollars to clergy abuse victims as part of bankruptcy proceedings.

The Diocese of Rockville Centre in New York last year proposed a plan that offered $200 million to approximately 600 survivors of abuse, the largest-ever settlement offer made in diocesan bankruptcy history. Survivors ultimately rejected the offer, deeming it insufficient. 

The Diocese of Rochester in 2022 proposed a $55 million payout to abuse survivors, though those proceedings are still underway. And the Diocese of Richmond, Virginia, paid out a total of $6.3 million to abuse victims in 2020.