Half of New Orleans clergy abuse claims could be abandoned in U.S. bankruptcy court | New Orleans clergy abuse

With the bankruptcy of New Orleans, Roman Catholic Archdiocese finally set a plan 633 Clergy abuse Regarding the claim filed, church investors argued in the U.S. Bankruptcy Court that about half of survivors may withdraw their claims.

Church officials said Wednesday that while the claim will be determined by a court-appointed examiner, they may not necessarily seek it. If investors’ arguments prevail, it could potentially be expensive for the U.S. second-largest Catholic Archdiocese, settled in five years of bankruptcy, or whether victims of abuse of its clergy would file a separate claim in civil court.

Meanwhile, the documents filed in court Tuesday outlined how the church agreed to pay at least $180 million to a settlement trust, which would grow to $210 million to $235 million if many affordable apartment buildings owned by church affiliates could be sold.

After identifying qualified claimants, they will vote to approve or reject the resolution by October 29.

If two-thirds of the voter claimants do not approve the settlement, Judge Meredith Grabill said she had no choice but to drive the church out of bankruptcy.

Attorneys for the group representing about 180 claimants have urged their clients to vote “no”.

If more than 600 claimants vote on this, the group alone would not be big enough to break the solution. But if the claim challenged by the church’s bondholders is abandoned, it will easily kill the deal.

The Archdiocese has previously noted that the bankruptcy court filed 154 claims on the March 2021 deadline. But it does not require the abandonment of these claims.

The church also argued in court documents that 142 claims proved to be duplicate people, known as abusers, who are religious orders or part of other groups not part of the authority of the Archdiocese, or from victims who have paid for personal settlements.

If all of these claims are thrown out, it will leave 337 claimants instead of 633.

While a few claimants will make it easier for plan opponents to call enough votes to get the church out of bankruptcy, it also means that the average spending per claimant is higher.

With 633 claimants, a $235 million settlement would generate an average spending of approximately $370,000. With 337 claimants, the average will jump to nearly $700,000. That would dwarf the average payments for the Catholic Diocese at Rockville Center in Long Island, New York, and many claimants pointed out that this is the fair standard for the New Orleans settlement clause.

On Tuesday, the church and a committee that negotiated settlement on behalf of victims of abuse presented a joint settlement plan and disclosure statement. The central terms of the agreement are Announce May, but there are some surprises.

One key is what the church discloses in public archives about child sexual abuse. The agreement says the archive will include claims against clergy that have been found in the Archdiocese, reliably alleged of abuse – or at least three verified claims named clergy or church staff. One or two claimants named will not be included in the file.

Additionally, as WWL Louisiana and The Guardian first reported in June, Archbishop bondholders accused securities fraud of refusing to pay investors $1 million in interest, repeatedly promising that all debts will be fully repaid.

In the new court filing, bondholders further claimed that the church set a $20 million cap on real estate sales to protect itself from being forced to sell property to pay for abuse claims.

The church took this step in 2020, when it believed that most abuse claimants would not file lawsuits against the church in court because of how long they had been waiting. But the Louisiana Legislature passed a so-called review law that allows victims to file lawsuits, and the church’s efforts to strike the law failed no matter how long the abuse took place.

Ramon Antonio Vargas Contribution Report