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Archdiocese of New Orleans files for bankruptcy to “reorganize their finances”

Updated: May. 1, 2020 at 4:17 PM CDT
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NEW ORLEANS, La. (WVUE) - Attorneys for the Archdiocese of New Orleans today filed for Chapter 11 bankruptcy saying they need to re-organize their finances.

This is to help deal with the burden of ongoing clergy sex abuse lawsuits and the church shut down due to COVID-19.

But attorneys representing several victims say it’s unnecessary.

For the past several years Archbishop Gregory Aymond has presided over dozens of clergy sex abuse lawsuits dating back decades, and those lawsuits and possible upcoming trials were not going away.

We asked Aymond, “Are these expenses about to get a whole lot worse?”

“Yes, lawsuits and mediation and as the numbers increased it made us look at this in a different way," Aymond said.

Chapter 11 re-organization plan is expected to buy the church some time. The Archbishop says all pending abuse cases will likely move to the federal bankruptcy court and be handled on a case by case basis by a federal judge.

“We believe this is the most charitable and just way to do it all victims are treated equally that we want to compensate all of them,” said Aymond.

The Archbishop says the bankruptcy filing will not affect individual Archdiocese churches, schools or ministries.

"Business, as usual, the mission of Catholic education continues,” Aymond said.

A group of lawyers involved in sex abuse litigation is expected to form a committee to fight this reorganization plan.

On the official form for the Archdiocese bankruptcy filing it indicates the churches estimated assets at 100-million to 500-million, while it also states it’s estimated liabilities are also listed between 100-million and 500 million dollars.

Attorney Roger Stetter has represented dozens of clergy sex abuse victims and says he was currently awaiting mediation in five cases. Now all that is on hold.

“This is a scheme to evade its moral obligation to the victim,” Stetter said.

"We’re not trying to avoid anything. We’re trying to walk with them and be as generous as we can,” Aymond said.

According to a Penn State law professor tracking church bankruptcies, the Archdiocese of New Orleans now joins 25 other church organizations across the country that have filed for bankruptcy since last September.

Aymond says the process will likely play out over the course of the next year.

The archdiocese says the bankruptcy will not affect its ability to pay normal operational expenses. The Archbishop does not believe he will have to sell off church property.

RELATED: Attorneys for alleged victims of church sex abuse respond to Archdiocese of New Orleans bankruptcy filing

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