Just as the Roman Catholic archdiocese of New Orleans was beginning to ask victims of clergy sexual abuse to approve a settlement plan assuring them of $180m, the church has now guaranteed $230m – enough to persuade certain attorneys who were opposed to striking a deal to instead favor settling.
The church’s largest insurer, Travelers, for now has evidently held out against a settlement. However, the Guardian and local reporting partner WWL Louisiana understand that the insurer is in active talks to contribute an amount of money that could substantially increase the worth of the proposed settlement.
Either way, Monday’s higher offer was a long-rumored move by the archdiocese to appease a sizable bloc of sexual abuse victims who had been advised by their attorneys to reject the smaller offer in a voting process that runs through 29 October.
Some of those attorneys issued a statement on Monday saying their “dogged efforts” had produced a “superior deal … to resolve this bankruptcy at long last”, and that they would be encouraging all of their clients “to vote in favor of this amended plan” thanks to the “current and certain funding now in place” for it.
“We knew we could do better, and we have,” said the statement from attorneys Richard Trahant, Soren Gisleson, John Denenea and seven other lawyers aligned with them.
Monday’s deal was first announced by plaintiffs’ attorney Jeff Anderson, who is not part of the group issuing that statement.
The deal now on the table supersedes an earlier one that called for 660 clergy abuse claimants in the bankruptcy to get at least $180m from the US’s second-oldest Catholic archdiocese, its affiliates and its smaller insurers. That earlier proposal also projected about an additional $50m from the eventual sale of Christopher Homes, a group of archdiocesan, assisted living facilities. The archdiocese still intends to sell Christopher Homes but was able to secure the $50m now, according to multiple sources familiar with those plans.
Trahant, Gisleson, Denenea and other attorneys representing as many as 200 of the abuse survivors had said they were advising their clients to reject that earlier deal as being inadequate, believing they deserved in the neighborhood of $300m.
Gisleson subsequently said in open court that the initial settlement proposal was “dead on arrival”. Meanwhile, one of his group’s clients, James Adams, had dismissed the proposal in media remarks as “a dead plan walking”.
By Monday, their group had been presented with a proposal guaranteeing $50m in archdiocesan funds not previously in hand.
“We knew this [earlier proposal] was a bad deal,” Adams’ attorneys said. “The power of ‘no’ forced the archdiocese to come up with significantly more money.”
The earlier deal had been announced in late May by the archdiocese and attorneys for a panel of abuse survivors representing clergy molestation claimants in the bankruptcy. Monday’s statement from Trahant and his co-counsel made it a point to say the new settlement proposal was reached “separate and apart” from that committee.
For any settlement proposal to gain approval, two-thirds of voting claimants must approve it. The revised settlement proposal aims to provide payments by 31 March 2026, according to Monday’s statement from Trahant and his co-counsel.
By filing for Chapter 11 bankruptcy protection on 1 May 2020, the archdiocese was able to dispose of the hundreds of clergy abuse claims facing it at once rather than individually. Paying the claims one at a time likely would be financially impossible.
The case has been markedly acrimonious. For instance, just days before the new settlement proposal guaranteeing $230m, a lawsuit asked the judge presiding over the bankruptcy – Meredith Grabill – to reject a guarantee of New Orleans archbishop Gregory Aymond’s future retirement benefits while accusing him and a high-ranking aide of having personally covered up child sexual abuse by priests and deacons.
The archdiocese responded by saying the allegations brought by attorneys for the plaintiff – Argent Institutional Trust Co, a trustee for investors who bought $41m in church bond debt back in 2017 – were baseless.
In 2022, at the archdiocese’s urging, Grabill fined Trahant $400,000 and expelled four of his clients from the bankruptcy abuse survivors’ committee – including Adams, then its chairperson – just as that panel was about to start negotiating a settlement. The reason for their dismissal: Trahant had taken steps that led a high school to learn that its chaplain was an admitted child molester, leading to the priest’s removal from its campus. Grabill ruled that Trahant’s actions violated secrecy rules governing the bankruptcy.
The outcome of an appeal Trahant filed against the levy was pending as of Monday.
Attorneys for the church and survivors have acknowledged that their settlement negotiations have been guided, in part, by a similar bankruptcy deal approved in January 2024 for a Catholic archdiocese on Long Island, New York.
In that deal, the archdiocese of Rockville Centre paid about $323m to roughly 600 abuse survivors.
The value of individual payouts in New Orleans is going to vary depending on an assessment conducted by an independent claims administrator as well as a trustee.
Initially, Aymond told his superiors at the Catholic church’s global headquarters in the Vatican that his archdiocese could settle the bankruptcy for as little as $7m. That belief seemingly stemmed from the fact that Louisiana state law in effect at the time prohibited molestation survivors of long ago abuse to pursue civil damages in court.
But Louisiana’s state legislature in 2021 removed that prohibition and cleared the way for molestation survivors to pursue such damages no matter how many years earlier their abuse had occurred. The state’s supreme court upheld the law as constitutional in June 2024, despite arguments to the contrary by the Roman Catholic diocese of Lafayette, Louisiana, about three hours west of New Orleans.
A statement from Aymond on Monday said the archbishop “is committed to bringing this bankruptcy to a conclusion that benefits the survivors of abuse”.
“I know there remains much work to be done, and I continue to hold this work in prayer,” Aymond’s statement added, in part.
Separately, a statement from the Minnesota-based Anderson – who represents some of the clergy abuse claimants – said, “We acknowledge the courage of the survivors who have stood against the forces of darkness. This is some relief, but it is far from the full satisfaction of the archdiocese’s obligations.
“This is an opportunity for the survivors to find some comfort while continuing pursue claims against Travelers Insurance.”
