New Orleans Archdiocese ordered to defend bankruptcy case

CNA Staff, Apr 30, 2025 / 12:04 pm (CNA).

The Archdiocese of New Orleans has been ordered to appear in federal court to defend ongoing proceedings in its years-old bankruptcy case, with a federal judge citing no resolution after years of proceedings and millions in expenditures.

Under financial pressure from clerical abuse litigation compounded by the coronavirus pandemic, the archdiocese announced in May 2020 that its administrative offices were filing for Chapter 11 bankruptcy.

Yet U.S. Bankruptcy Judge Meredith Grabill said in an order this week that after “five years and millions of dollars expended, no coalition of parties has proposed a confirmable plan” to help the diocese compensate abuse victims both monetarily and with “nonmonetary remedies in the form of disclosure, transparency, and lasting institutional protocols.”

The judge directed the archdiocese to appear in the New Orleans court on June 26 to argue “why this case should not be dismissed for cause, including the inability to effectuate a plan of reorganization.”

The court “remains steadfast in its belief that [the bankruptcy] process can supply the best outcomes for all parties in this case,” the order said.

In a statement this week, the archdiocese said it was “pleased to have the opportunity to share our significant progress in negotiations to bring just and equitable compensation to the survivors and creditors while providing a sustainable path forward for the ministry of the Catholic Church to continue in our area.”

“Despite the unacceptable amount of time and money spent over the past five years, we believe resolution of these bankruptcy proceedings will be for the benefit of all survivors and creditors and the faithful of the Archdiocese of New Orleans,” the archdiocese said.

Attorneys for the archdiocese would “work to formally respond to the court’s order,” the statement said.

Last September the archdiocese proposed a bankruptcy settlement of $62.5 million to victims of abuse, though the victims themselves have requested hundreds of millions of dollars more in compensation.

The $62.5 million proposal was considerably less than the roughly $1 billion proposed by survivors of clergy abuse, the vast majority of which would be paid by insurers.

The New Orleans Archdiocese is one of many U.S. bishoprics to have filed for bankruptcy in recent years due to financial pressure from abuse claims.