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Archdiocese Files for Bankruptcy amid Clergy Sex Abuse Case

The Archdiocese of New Orleans has joined the list of over 20 dioceses across the US, after filing for bankruptcy protection over fears of facing costly litigation from the growing clergy sex abuse scandals.

Gregory Aymond, archbishop of the New Orleans church, released a statement on Friday, May 1, 2020 — confirming the move to seek relief in the federal Bankruptcy Code 11. All the pending lawsuits are expected to be suspended at least temporarily until the federal bankruptcy judge gives a directive.

The bankruptcy provision could help the Archdiocese to reorganize its finances, allowing the religious center to settle the remaining unresolved sexual abuse claims, read the statement. It also added that the church has gone over a budget and cannot afford the growing legal costs, as its finances have been channeled to help in fighting the spread of COVID-19.

Aymond said the protection request would, however, affect only the Archdiocese’s administrative offices. The individual Catholic church parishes, as well as schools connected to the parishes or those run by various religious orders, will not be affected both in finances and normal daily operations.

Criticism in New Orleans

The bankruptcy declaration sparked criticism from locals and the Survivors Network of Those Abused By Priests (SNAP), terming it as a way of protecting church secrets and assets.

Kevin Bourgeois, leader of the SNAP, said the move to follows other catholic officials to seek protection instead of allowing victims to pursue clergy sexual abuse claims in court is a disappointing act of cowardice.

Bourgeois added that the FBI and US attorney should investigate to establish the financial status of the Roman Catholic Archdiocese of New Orleans. He believes the assets of the church far outweigh its liabilities.

Archdiocese Assets and Liabilities

The Archdiocese’s assets are estimated to range from $100 million to $500 million. Some of the assets listed by the church include land and buildings worth $77 million and $306 million endowment funds.

It is reported that church liabilities also fall in the same range as assets. Liabilities include $38 million in state facilities bonds, $8.5 million set aside for clergy sex abuse claims, and over $500, 000 dollars in employee health claims. The church also claims to have between 10,000 and 25,000 creditors.

Aymond archbishop said the shutdown of churches due to coronavirus deal a blow to the Archdiocese, which was already dealing with millions of dollars in annual operating losses even before the pandemic.

Archdiocese of New Orleans Clergy Sex Abuse Records

There has been a long list of sex abuse lawsuits brought up in court against priests of the 227 years old Roman Catholic Archdiocese of New Orleans. In 2018, the church gave out a list that featured more than 50 names of clergy members who were alive and had been accused of committing sexual offenses, which led to their removal from the ministry. The report also included names of religious order priests with pastoral roles in the Archdiocese, but who faced credible allegations of abuse that took place outside the religious center.

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Mike Mahone

Mike Mahone

Mike Mahone is a personal injury and business litigation lawyer located in New Orleans, LA, and the sole practitioner of The Mahone Firm.

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