Some attorneys involved in the bankrupt New Orleans Catholic archdiocese’s federal financial reorganization say they have reached terms on an agreement to settle decades’ worth of clergy molestation claims, but lawyers representing a sizeable share out of more than 600 abuse claimants contend the proposed deal falls short by about $100m – and they’re hoping they have the votes to block its approval.
Both developments came on Wednesday amid a struggle to resolve a tortuous chapter 11 case that has cost the church more than $45m in legal and other professional costs.
The case theoretically could get dismissed at a hearing toward the end of June if the presiding judge, Meredith Grabill, determines she is unsatisfied with its progress.
Wednesday’s announced agreement was between attorneys for the archdiocese and those representing a creditors committee advocating on behalf of people who have filed abuse-related demands for damages in the bankruptcy.
But most of the abuse claimants are not on the panel that helped craft the announced agreement, which requires approval from two-thirds of voting plaintiffs – many of whom are represented by attorneys not involved in the committee.
A group of attorneys who collectively represent more than 80 abuse claimants say they are against the terms of the deal negotiated by the committee and church’s lawyers amid protracted mediation talks.
And those attorneys – Richard Trahant, John Denenea and Soren Giselson – say they will recommend that their clients vote against accepting the proposed settlement.
Another attorney who represents about 100 abuse claimants, Robert Salim, told Bloomberg Law that Wednesday’s proposal was “woefully inadequate to address the harms these people have endured”.
“This proposed settlement is not in the best interest of anyone but the church,” Salim reportedly said. “We remain committed to finding a just and honorable resolution of these claims. The proposal as [it] stands doesn’t accomplish this goal.”
If approximately 600 claimants voted on whether to settle, it would take about 200 to oppose the deal for it to be rejected.
According to multiple sources with knowledge of the situation, the deal put on the table on Wednesday calls for the archdiocese, its affiliates and insurers to pay between $180m and $230m, much more than the $62.5m initially offered by the church in September – but far short of the $323m deal approved in 2024 for a similar case pitting about 600 clergy abuse claimants against the archdiocese of Rockville Centre on Long Island, New York.
“The committee delivered on its commitment to provide survivors a settlement that provides fair compensation, transparency and, importantly, unprecedented child-protection measures,” said Jim Stang, the lead attorney for survivors’ committees in both New Orleans and Rockville Centre. “We look forward to working with all survivors to bring this five-year bankruptcy case to an acceptable resolution.”
In a letter on Wednesday, New Orleans’s archbishop Gregory Aymond said the proposed deal would protect the archdiocese’s institutions while allowing them to collectively “look to the future towards a path to healing for survivors and for our local church”.
A statement from Trahant and his associates said Wednesday’s announcement was “a backroom deal” that excluded “the overwhelming majority of survivors” and “is spitting in the face of the people [the church’s] employees raped”.
The New Orleans proposal calls for the church and its affiliates to provide about $130m in cash already in hand toward a settlement.
That figure would grow to at least $150m – and up to $200m – from the eventual sale of about a dozen archdiocesan-owned apartment complexes providing housing for low-income seniors as well as people who are disabled.
However, those Christopher Homes apartment complexes were not even on the market as of Wednesday, and there is no known buyer lined up yet – despite the archdiocese’s having first received a purchase offer from an interested party days after it filed for bankruptcy in May 2020.
So, even if things go smoothly, that key transaction could take a year to complete, Denenea and his associates argue.
Meanwhile, in a statement, Stang said the sale of the archdiocese-owned orphanage known as Hope Haven – which was shuttered after numerous children were abused there by clergymen and others – would also create funds for the settlement.
Louisiana state senator Pat Connick has spoken publicly about leading a plan calling for the government of the community where the site is to buy and transform it into a mixed-use space.
The deal at the moment says the church’s insurers would contribute about $30m, an amount that is hundreds of millions of dollars below what the survivors’ committee’s attorneys had previously suggested those companies should pony up.
Sources said the proposal does not mention any money coming from the church’s largest insurer, Travelers, though abuse claimants would be able to litigate against that company individually upon resolving the church bankruptcy.
Accepting the deal as it is, therefore, would net clergy abuse survivors in New Orleans an average payout of between $300,000 and $383,000, significantly less than the nearly $540,000 per abuse claim for which the Rockville Centre archdiocese’s bankruptcy on Long Island settled.
How much each claimant gets would be based on a matrix established under the settlement factoring in the nature of the abuse, the amount of supporting evidence and other elements.
James Adams, a clergy abuse survivor who served as the creditors committee chairperson for the first two years of the church’s bankruptcy, said he was displeased with how the plan presented on Wednesday used “fictional numbers to come up with a speculative total”.
Adams said the settlement plan put forth was “a missed opportunity” to make “a good faith offer”.
“This is not what it is, so it’s incredibly disappointing,” said Adams, who is represented by Trahant and his associates. “To call a vote on this proposal is a waste of time and money. It’s a dead deal walking.”