How Much Compensation Should New Orleans Catholic Church Sex Abuse Survivors Receive?

Over the past four-plus years, the Archdiocese of New Orleans has been battling bankruptcy proceedings due to Louisiana sex abuse lawsuits. The bankruptcy has caused tension between diocese leaders and parishioners, diocese leaders and state lawmakers, and diocese leaders and survivors of childhood sexual abuse.

In mid-September, the sexual abuse claimants filed their own bankruptcy plan which included a structure of how to compensate the victims and resolve the bankruptcy. Shortly thereafter, the archdiocese filed its own plan. However, the two plans are a gulf apart.

Louisiana Clergy Sex Abuse Settlement Proposals

On September 13, 2024, the abuse victims submitted their own bankruptcy plan. Their plan calls for the archdiocese and its insurers to pay approximately $1 billion, take steps to prevent future sexual abuse, sell about 10% of their real property, millions in personal property, and take important institutional steps to prevent future sexual abuse. The survivors’ plan also stressed that the compensation should come from several entities within the archdiocese, including affiliated churches, ministries, and schools, and about $800 million being paid by insurers.

Shortly after the abuse survivors filed their own plan, the archdiocese submitted its bankruptcy plan. The plan totals a meager $62.5 million, including a $50 million cash transfer from the archdiocese into a settlement trust, and a $12.5 million payment from affiliated “non-debtor Catholic entities.” 

For any bankruptcy plan to gain court approval, it has to be approved by two-thirds of the abuse survivors who vote.

The Issue of Insurance Money

One of the major differences between the two plans is the insurance money used to compensate victims. The archdiocese did not include insurance as part of the compensation plan, but victims’ representatives proposed using about $800 million from insurance companies.  No insurer has gone on record to agree to be part of a compensation package.

In an article by The Guardian, James Adams, an abuse survivor, former president of the New Orleans archdiocese’s fundraising board, ex-member of the creditors’ committee, and client has pushed for strong compensation for the victims and feels their plan is more than fair. Adams also pointed out that early in the proceedings Archbishop Gregory Aymond told his supervisors at the Vatican that insurance would cover “the vast majority” of the bankruptcy. 

The survivors’ plan also focuses on other issues, including how to measure each claimant’s injuries. It suggests each claim is measured, using a score of one to 100, based on the severity, duration, and frequency of the abuse the victim endured.

In addition, it addresses how the archdiocese should change its system of reporting and responding to child molestation allegations. Unlike how it handled these types of situations in the past, the Church would be required to report all abuse to the police, no matter how long ago the crime occurred and no matter if the abuser has already died.

Archdiocese of New Orleans Bankruptcy Spending Reviewed

The two sides delivered their proposals about one month after U.S. bankruptcy judge Meredith Grabill appointed a financial expert to evaluate the Archdiocese of New Orleans’s bankruptcy spending. Grabill’s decision came following a brief filed by Herman, Katz, Gisleson & Cain partner Soren Gisleson who represents dozens of claimants along with co-counsel. The brief asked the court to appoint a trustee to take over the archdiocese finances from the archbishop.

The brief stated, “One of the central people who enabled generations of the sexual abuse of children should not manage this bankruptcy. Archbishop Gregory Aymond’s personal and professional failings caused the filing of the bankruptcy in the first instance.”

Judge Grabill selected Mo Meghji, the managing partner of M3 Partners of New York to review the expenditures incurred in the bankruptcy since its filing in 2020 which currently exceed $40 million. Meghji is tasked with determining if the archdiocese can reorganize. Meghji was asked to finish the assessment by October 9 and file the public report on the findings by October 23.

The Louisiana clergy sex abuse lawyers at Herman, Katz, Gisleson & Cain are committed to advocating for sexual abuse survivors within the New Orleans Archdiocese and beyond. If you have been a victim of clergy abuse, no matter if it was recent or in the past, you should seek help to ensure you heal and hold the abusers and those who protected them responsible. Contact us online for a free case consultation or call (844) 943-7626.