Archdiocese of New Orleans, abuse survivors still far from settlement; ‘A knife fight since day one’

NEW ORLEANS (LA)
Nola.com [New Orleans, LA]

November 17, 2023

By Stephanie Riegel

After three-and-a-half years of courtroom squabbles, the Archdiocese of New Orleans and attorneys representing hundreds of victims of child sexual abuse are far from a deal that would allow the local Roman Catholic church to emerge from federal bankruptcy protection.

Two days of hearings in U.S. Bankruptcy Court, where Judge Meredith Grabill is overseeing the church’s Chapter 11 reorganization, covered a host of issues related to property sales, insurance claims and whether survivors of clergy sexual abuse should be permitted to file suit against individual parishes in addition to the archdiocese.

They yielded no rulings and largely demonstrated to parishioners, the public and Grabill how a process Archbishop Gregory Aymond hoped would allow the church to put the abuse crisis behind it had descended into bitter and drawn out legal disputes.

Attorneys representing abuse survivors are frustrated by the lack of progress, they said during the hearings. Meanwhile, attorneys for insurance companies said they’re being left out of settlement talks that will inevitably involve them.

“Everything has been a knife fight since day one,” said an exasperated Grabill while admonishing attorneys for the archdiocese for failing to disclose information related to a property sale.

She said she would likely need to “start imposing a move collaborative process.”

A long fight

The archdiocese filed for bankruptcy protection in May, 2020, amid mounting claims of child sexual abuse by Catholic clergy, many of them decades old.

At the time, some 30 lawsuits had been filed against the archdiocese. Now, more than 500 abuse survivors have filed credible claims, suggesting that  any settlement could reach $100 million or more.

The legal bills have also mounted. Attorneys and other experts in the case have been paid some $30 million in professional fees. In September, Aymond informed local parishes they they, too, would likely need to contribute to the settlement.

At a hearing in early February, Grabill said she hoped a reorganization plan in the long-running case could be worked out by the end of this year, a deadline that now appears unlikely to be met.

The main issue before the court in the recent hearings is whether abuse survivors can file lawsuits in state court against parishes and charitable organizations affiliated with the archdiocese.

Under a state law passed in 2022, Lawmakers agreed to create a short legal window where past victims of child sexual abuse would be able to make claims against their alleged abusers. 

The filing period closes in June, and while the archdiocese is challenging the constitutionality of the law, attorneys for claimants said they’re worried the bankruptcy case may not be settled before the deadline.

While parishes, charities, and other church affiliates are not technically part of the bankruptcy, they are covered under the archdiocesan insurance policy. For that reason, Grabill has ruled that survivors cannot go after them while the archdiocese is under bankruptcy court protection.

“All we want to do is safeguard the timeliness of our clients’ claims if the bankruptcy fails,” Brittany Wolf-Freedman an attorney who represents abuse survivors, told Grabill.

Attorneys for the survivors told Grabill if she allows the suits, their clients would file them only in a placeholder fashion but would not pursue them until after the bankruptcy is settled.

But in a replay of similar arguments that are occurring in other church bankruptcy cases across the U.S., attorneys for the archdiocese, the insurance companies and the affiliates opposed the move. They argued that there is no guarantee survivor attorneys won’t pursue the cases once they are filed and are worried it would result in a flood of lawsuits. 

“We are justifiably concerned that this isn’t going to cause any harm,” said Mark Mintz, who represents the archdiocese.

Property fights

The arguments underway in the case include everything from the rights of abuse survivors to pursue other cases to the specifics of church property sales.

Earlier in the week, the court spent nearly three hours focused on how a commercial real estate broker for the archdiocese valued and marketed the St. Jude Community Center, a property on North Rampart Street that the archdiocese is trying to sell.

Attorneys representing the creditors committee argued the broker should have listed the property publicly before accepting a purchase agreement in an effort to secure the highest possible price. Broker Parke McEnery argued that the offer he received was the best possible for the site.

Grabill said she would not approve the sale and wanted the building to spend more time on the market.

“I am concerned we spent two and a half hours here talking about this,” she said. “there are easier ways to skin a cat.”

Email Stephanie Riegel at [email protected].