Archdiocese of New Orleans Latest to File for Bankruptcy

On Friday, May 1, 2020, Archbishop Gregory Aymond announced that the Archdiocese of New Orleans would seek bankruptcy protection in federal court.

The filing for reorganization could free the archdiocese from the threat of creditors’ lawsuits while it reorganizes its finances. The New Orleans archdiocese is the latest of 26 dioceses nationwide to take such action.

Friday’s statement said costs associated with preventing the spread of coronavirus also have contributed to financial pressures.

The filing effectively stops all civil litigation concerning priest abuse involving the Archdiocese of New Orleans.  It also halts the dissemination of information concerning the extent to which the Archdiocese covered up for abusive priests and hid the secrets from the faithful and the public.

Kevin Bourgeois, of the New Orleans chapter of Survivors Network of those Abused by Priests, called the filing “an act of cowardice” by church leaders, including Archbishop Gregory Aymond.

“The overriding question is not one of legality, but one of morality. The FBI and the US Attorney should investigate the finances of this organization as they file for Chapter 11 protection,” Bourgeois said in an emailed statement.

Friday’s filing includes a form saying the archdiocese assets are between $100 million and $500 million, with liabilities in the same range. The Times-Picayune/The New Orleans Advocate have reported, based on earlier court filings, that church assets include a $306 million endowment and $77 million in land and buildings.

Currently, there are four active bankruptcy filings involving the Catholic Church in the United States-the dioceses of Rochester, Buffalo, Harrisburg, and now the Archdiocese of New Orleans.  In 2018, the Archdiocese released a list of 50 names of clergy who have been credibly accused of the sexual abuse of minors.

Parish churches, schools, housing agencies and other ministries are incorporated separately from the archdiocese. Aymond and Patrick Carr, the vicar general of finance for the archdiocese, said they didn’t anticipate those operations and funds to be affected.  However, in the settled church bankruptcy cases these entities enjoy the immunity that comes from bankruptcy protection.  It seems as though the church is the beneficiary on both ends of the bankruptcy equation.  On the one hand, the parishes and other entities are separate from the bankruptcy so they are allowed to continue normal business operations.  However, on the other hand, they are protected from future lawsuits thanks to the bankruptcy.  It’s a win-win for the church which never seems to pay for the horrible crime of child sexual abuse.

Furthermore, no bankruptcy judge has compelled the church to sell property in order to pay creditors.  This is another inequity of which the church takes full advantage.

The vast majority of Catholic Church bankruptcy cases have been resolved swiftly and without much controversy.  However, there have been exceptions.  The Archdiocese of Milwaukee was a particularly contentious example.  Then Archbishop Timothy Dolan was accused of hiding church assets by transferring $55 million to a cemetery trust fund.  For his efforts, he was handsomely rewarded by the Vatican.  He is now the Cardinal Archbishop of New York.  A more recent example concerns the Archdiocese of Santa Fe which has been accused of hiding assets.  The Santa Fe outcome has yet to be determined.

For the courageous survivors of sexual abuse, the time to act is now.  If you have been abused by a Catholic priest or clergy member in the Archdiocese of New Orleans, you must contact an experienced sexual abuse attorney who has handled claims against the Catholic Church.  If you fail to act, you will be forever barred from seeking justice.