With a self-imposed deadline looming to file a plan to reorganize New Orleans’ bankrupt Roman Catholic archdiocese, a committee representing about 500 survivors of clergy sexual abuse in south-east Louisiana on Friday proposed that the organization, its affiliated churches, ministries, schools and their insurers should pay more than $1bn to settle their claims.
The archdiocese quickly answered with its counter-proposal: $62.5m, or more than $900m less.
Looking at it another way, the survivors are seeking $2m per claim – the church is offering $125,000 on average.
The vast majority of the money in the abuse claimants’ proposal – roughly $800m – should come from insurance companies, according to the plan filed on Friday in US bankruptcy court by a negotiating committee representing the abuse creditors. Meanwhile, the archdiocese should pay $84m and its affiliates – known as apostolates – should chip in $133m.
In the church’s competing plan, the archdiocese was prepared to offer $50m and its apostolates $12.5m. Nothing additional would come from the archdiocese’s insurers.
The church’s proposal includes non-monetary considerations, but it did not immediately file any of those details. New Orleans’s archbishop, Gregory Aymond, has said he planned to disclose documents on clergy abusers that the church has long fought to keep secret.
In a letter to Catholics in the region, Aymond said the church was negotiating “actions that we publicly pledge to take to continue our commitment to ensuring our parishes, schools, and ministries are safe places for all to grow in faith, be educated, and to participate in ministry”.
The archdiocese has already paid about $40m in legal and professional fees to go through the bankruptcy process so far – well over the $7m that the church initially claimed that the proceeding could cost. And none of those costs will be paid by insurance, church officials have told WWL Louisiana, a CBS affiliate.
Any final settlement plan would have to be approved by the majority of abuse survivor claimants.
The San Diego archdiocese’s 2007 bankruptcy settlement was the most lucrative for abuse claimants, with the church and its insurers paying more than $198m to 144 victims – an average of $1.4m per claim. San Diego’s archdiocese declared bankruptcy again in June.
James Adams, an abuse survivor, former president of the New Orleans archdiocese’s fundraising board and ex-member of the creditors’ committee, said the victims’ initial offer is more than fair. Adams alluded to how Aymond, early in the proceeding, informed the Vatican in writing that insurance would cover “the vast majority” of the bankruptcy – and that is the case in Friday’s proposal from abuse victims.
He noted how the archdiocese is embarking on a $75m restoration project for its Saint Louis Cathedral, which is $12.5m more than what the church was offering victims to settle the bankruptcy.
“Is a soul less valuable than a building?” Adams said. “Archbishop Aymond’s long-awaited plan gives his answer loud and clear.”
One of Adams’ attorneys, Soren Giselson, echoed him, saying in a statement that the survivors committee’s proposed plan would fairly compensate more than 500 people were abused as children “by pedophile clergy enabled by the archdiocese”.
The creditors’ plan also lays out exactly how each abuse claim would be valued by a neutral reviewer. It proposes using a score of one to 100 for each claimant based on the severity, duration and frequency of the abuse they allegedly suffered, how many church officials allegedly abused them, and how they were affected for the rest of their childhood and through adulthood.
The creditors’ proposal also would require the church to change the way it reports and responds to child molestation allegations, which, for decades, were handled internally without being reported to police.
The proposal would require the archdiocese to report to law enforcement all abuse whether or not the abuser is dead, the victim is now an adult and no matter how many years have passed since the crime, which is the opposite of how the church dealt with such claims during the decades-old clergy molestation crisis that preceded the archdiocese’s bankruptcy.
This is just the opening public salvo in the negotiations for a settlement. It comes after more than four and a half years of expensive legal wrangling, marked by acrimony, secrecy and even a criminal investigation into cover-ups with sworn police statements describing an alleged child sex ring at the archdiocese.
US bankruptcy judge Meredith Grabill has recently put the first public pressure on the two sides to reach an agreement or pull the plug on chapter 11 reorganization. She assigned a business turnaround expert to determine whether it was viable for the church’s bankruptcy to be resolved successfully, with a public report on the question due on 23 October.
One reason for the difference of opinion in the value of the proposed settlements was the Louisiana supreme court’s decision to uphold a 2021 law allowing child-molestation victims to pursue monetary damages over long-ago abuse. Church institutions have consistently argued that it is unconstitutional to force them to potentially pay damages on abuse allegations that were filed in court too late while abuse victims’ advocates say the upholding of the law has considerably driven up the potential value of their claims.
In August, attorneys for the archdiocese and the creditors promised Grabill that the two sides would present their dueling reorganization plans to the court by Monday.
Aymond, who is the corporate leader of the archdiocese and each of the church’s 188 apostolates, announced that affiliated parishes and schools would also have to share in the cost of settling the bankruptcy.
One of the apostolates on the hook for a portion of the settlement is Christopher Homes, about a dozen apartment complexes the church owns and operates as low-income and senior housing. A major Boston-based real estate investment firm, Hayden Glade, made an offer shortly after the start of the archdiocese bankruptcy case to purchase Christopher Homes for $150m. Sources tell WWL the deal would have let the church pay off the business’s debts and clear about $75m.
Hayden Glade managing partner Elliott White, himself a survivor of child sexual abuse, said the archdiocese dismissed his offer out of hand. But he has not given up hope that the church might ultimately accept his offer, which would cover more than half of the total amount survivors are demanding from all of the archdiocese’s affiliates.
“I made an offer, and to move forward, [the church said] I’d have to release what I’m guessing would be several million dollars to the church, but without having a purchase contract,” White said. “We didn’t have the opportunity to say we need to see this money go to aid the victims. We just were sort of told ‘no.’”
