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Archdiocese of New Orleans Bankruptcy Trials: What Are They Hiding?

Image courtesy of NICOLAS HENDERSON / FLICKR

By Margaret Adams

The Archdiocese of New Orleans filed for Chapter 11 bankruptcy protection on Friday, May 1, 2020. This allows the Archdiocese to continue employing workers while the court oversees “the restructuring and implementation of a plan to repay the creditors,” according to 4WWL New Orleans. 

In an effort to hold the Archdiocese of New Orleans accountable for filing the bankruptcy in bad faith and hiding information regarding their sexual assault lawsuits, the Official Committee of Unsecured Creditors was formed. The Committee was formed on May 20 under the U.S. Trustee Program in an attempt to “dismiss the Archdiocese’s bankruptcy case completely, a move that would help pending abuse claims move forward,” said 4WWL. The Committee elected James Adams as the Chair of the Committee by a unanimous vote. The creditors in the Archdiocese of New Orleans’ bankruptcy case consist mostly of survivors of sexual assault by priests or other employees of the archdiocese. 

“I believe that this path will allow victims of clergy abuse to resolve their claims in a fair and timely manner,” said Archbishop of New Orleans, Gregory Aymond, in a newsletter to the archdiocese. “My daily prayer is that this independent process brings about healing for those who have been harmed as a result of abuse by members of the clergy. The healing of victims and survivors is most important to me and to the church.” 

The hearing on the motion to dismiss was held on August 20. According to Nola.com, one of the lawyers representing the survivors used a letter written by Archbishop Aymond to inform the Vatican that insurance is most likely going to cover the sexual assault claims, leaving the Archdiocese of New Orleans (ANO)  to be responsible for only $7 million. ANO’s attorney, Mark Mintz, argued that “federal law does not require entities to be completely insolvent before seeking Chapter 11 protections, which allow them to reorganize while shielding them from creditors’ demands.”

According to WDSU New Orleans, Bankruptcy Court Judge Meredith Grabill has since stopped the ANO from paying “credibly accused clergy, including their health insurance coverage.”

The Tower spoke with Ricky Trahant, the Chair’s lawyer and passionate advocate for survivors of child abusers. When asked about the reasons as to why the Committee of Unsecured Creditors filed a motion to dismiss the Archdiocese of New Orleans’ bankruptcy, he explained that the ANO valued their assets at $130 million, but have it insured for over $2 billion; upon further investigation, the ANO showed the vast majority of their property has not been appraised, so they list the value as $0. He, and the lawyers he works with to represent victims of sexual abuse, believe the ANO just wanted to put a stop to lawsuits, as they have bottled up discoveries; every time state court lawyers would want information, they would not give in. At the end of the day, he believes that money is not enough and it cannot provide healing and reconciliation to the victims for the trauma and pain caused by the hands of their church leaders.

“It raises the burning question of ‘well, what do they have to hide?’” said Trahant when asked how the bankruptcy might affect the Catholic faithful of ANO and other archdioceses across the U.S. “If it was the abuse claims and the media surrounding the abuse claims that forces them to file for bankruptcy, what was it that they were hiding?”

He continued to explain that he and the other lawyers are under orders not to release certain documents.

“Relative to certain priests, we know what they knew and when they knew it,” Trahant said. “It is very frustrating to us not to be able to share these documents with the public who have the right to know… 

Trahant iterates the importance of understanding what this institution has done to so many children. He illustrates how Catholics  have a responsibility to clean the Church and hold leadership responsible.

“The Catholic faithful cannot engage in the cognitive dissonance of saying ‘because I am devout, because I love my faith, I can ignore what this institution has done for decades in the failure to protect children,’” Trahant said. 

The Tower also reached out to Sarah McDonald, press representative for the Archdiocese of New Orleans for a comment. She was unable to respond to questions because “the Archdiocese of New Orleans’ bankruptcy proceedings are a matter in the courts and of pending litigation.”

In their press release, the Archdioceses of New Orleans revealed their purpose of filing for bankruptcy: “The intention of the filing is to allow time to develop a reorganization plan detailing how available assets and insurance coverage will be used to settle outstanding claims and to negotiate reasonable settlements while enabling the administrative offices to continue and emerge better prepared for the future. This reorganization will also allow the Archdiocese to address remaining clergy abuse cases in a way that will allow funds to go directly to victims instead of funding prolonged, costly litigation.”

According to WDSU New Orleans, the bankruptcy court has set a deadline – March 1, 2021 – for any sexual assault lawsuits to be filed. 

If you or a loved one has experienced sexual assault, please contact the police and the following numbers:

National Sexual Assault Hotline: 1-800-656-4673

National Suicide Hotline: 800-273-8255

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