Archdiocese of New Orleans announces proposed 'multimillion dollar' bankruptcy settlement

(OSV News) -- The Archdiocese of New Orleans has moved closer to a resolution of its long-running bankruptcy case, announcing a proposed multimillion dollar settlement for abuse claimants Sept. 8.

In its press release, the archdiocese said "individuals who experienced sexual abuse" involving either the archdiocese or one of its 157 affiliated Catholic organizations -- including "parishes, schools, academies, Catholic Charities organizations, and other ministries" -- could be eligible for compensation under a proposed settlement trust.

Claims can be filed for any "unwanted sexual behavior, contact, comments, or any conduct that was sexual in nature, whether or not it was recognized as abuse at the time," said the archdiocese.

Those who had not already filed a claim in the bankruptcy case or served the archdiocese with a lawsuit by Aug. 14 must have their claims filed and received by Dec. 2 at 11:59 p.m. (Central time) or face possible "permanent loss of the right to receive payment" from the proposed settlement trust, the archdiocese noted.

Claims can be filed online at www.NOLAchurchclaims.com. Applicants can also download a form from the site, or call (877) 476-4389 to request a form by mail.

"All information submitted will be kept confidential," said the archdiocese.

A spokesperson for the archdiocese confirmed to OSV News that the claims -- which total more than 600 so far -- are not time-bound, since Louisiana lawmakers lifted statutes of limitation for filing such allegations.

In an Aug. 11 press release, lawyers representing the survivors' committee said the settlement would provide a projected $220 million for their clients, "plus the potential for additional recoveries."

Those supplemental contributions include $130 million in cash funding from the archdiocese and its Catholic affiliates for the settlement trust; some $30 million from insurance companies, plus "substantial additional recoveries" from litigation against Travelers Insurance Co., insurer of the archdiocese during the time of alleged abuses; and a $20 million promissory note from the archdiocese, to be prepaid upon the sale of senior housing owned by Christopher Homes, the archdiocese's housing agency, founded in 1966. The Aug. 11 press release also noted additional housing units owned by the agency could be sold in 2026, potentially realizing more than $40 million.

Along with the funds, the proposed settlement features "new," "unprecedented" and "binding" child protection measures "and transparency into the history of abuse in the Archdiocese," said the press release from the survivors' attorneys.

The plan "overhauls" abuse reporting, notification of law enforcement, investigation and documentation standards, and survivor communications, said the Aug. 11 press release. In addition, the plan would provide for a "Survivors BIll of Rights," dedicated seats on the diocesan review board for an abuse survivor and an outside abuse expert, and a public archive of documents related to abuse claims.

However, a number of those points -- particularly reporting to law enforcement, survivor communications and assistance, and review board composition -- are already addressed to greater and lesser extents in the U.S. Conference of Catholic Bishops' "Charter for the Protection of Children and Young People."

OSV News is awaiting a response to its request for clarification by the Archdiocese of New Orleans regarding the protocols noted by the attorneys in their press release.

The Sept. 8 announcement follows a May 21 letter to faithful from New Orleans Archbishop Gregory M. Aymond, announcing the archdiocese had reached a memorandum of understanding with creditors in the case.

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 year, 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 has found that from 2004 to 2024, U.S. Catholic dioceses collectively paid a total of more than $5 billion to settle abuse claims.