The Archdiocese of New Orleans has reached a memorandum of understanding with creditors in its long-running bankruptcy case.
Archbishop Gregory M. Aymond released a May 21 letter to archdiocesan faithful announcing the arrangement, which he said “protects our parishes and begins to bring the proceedings to a close.”
The archbishop said he had met with parish pastors this week to brief them on the tentative settlement, and promised to “share updates as they are available,” adding that “there remains much work to be done as we look ahead to confirming our plan” in court.
He also assured abuse survivors that “as a Church we hold you in our prayers,” adding that he prayed for them daily “in a spirit of humility,” while looking forward to meeting them and hearing their stories.
“Please know that because of your courage in coming forward and your steadfast commitment to preventing the horrors of child sexual abuse, we are a better and stronger Church,” said the archbishop.
The Chapter 11 filing — which dates to 2020 and was prompted by some 500 abuse claims — has been what Archbishop Aymond previously called “a much longer, complicated, and costly process than anyone could have predicted.”
Earlier this month, OSV News confirmed with a spokesperson for the archdiocese that its legal fees to date in the case exceeded $41 million.
On April 28, Judge Meredith S. Grabill had issued an order on a potential dismissal of the “particularly contentious” suit, which had failed to reach a reorganization plan after five years of litigation. In response to a request from some of the abuse survivors, Grabill had fast-tracked the dismissal inquiry — first set to take place in June — by scheduling a May 29 preliminary hearing.
In a May 1 statement, the archdiocese admitted the “unacceptable amount of time and money spent over the past five years,” but held that “dismissal is not in the best interest of all survivors.”
Although Grabill noted in her April 28 order that lengthy, expensive legal proceedings are “not unusual or unexpected in complex mass-tort cases,” the court’s patience appeared to wear thin, especially after several regular status conferences and the appointments of both an independent expert and an additional mediator to move the case along.
Grabill pointed to the two proposed reorganization plans each side had presented in September, which she said “greatly differ on the amounts and sources of funding that could be distributed to creditors, as well as the form of protections in a plan designed to provide certain and final resolution of liabilities.”
In statements issued April 28 and May 1, the New Orleans Archdiocese stressed its intention to support survivors in their pursuit of justice and healing.
In September 2023, Archbishop Aymond advised the faithful that parishes would need to contribute to the settlements.
Along with the wranglings over bankruptcy and survivor compensation, the archdiocese’s battle to resolve sex abuse claims has also included:
— The recusal of a previous judge in the Chapter 11 case.
— The guilty plea and life sentence of Msgr. Lawrence Hecker for rape and other crimes committed in 1975-1976.
— An investigation by the Louisiana State Police and the FBI to determine if archdiocesan officials covered up child sex trafficking by clergy over several decades, with some alleged victims reportedly taken out of state to be abused and marked for further exploitation among clergy.
A search warrant in that investigation was issued in May 2024. Louisiana State Police Public Information Officer Jacob Pecheu confirmed to OSV News the investigation was ongoing. OSV News is awaiting comment from the archdiocese regarding the investigation.
OSV News has found that from 2004 to 2024, U.S. Catholic dioceses collectively paid a total of more than $5 billion to settle abuse claims.
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