Administrative offices of archdiocese file for Chapter 11 reorganization of finances

Citing mounting concerns over the financial impact of clergy sex abuse settlements and the coronavirus pandemic, the Archdiocese of New Orleans filed for Chapter 11 reorganization of the finances of its administrative offices May 1 in U.S. Bankruptcy Court for the Eastern District of Louisiana.

In a letter to Catholics of the archdiocese, Archbishop Gregory Aymond said the “difficult decision” to file for financial reorganization would allow the archdiocese to ensure that sex abuse victims have their claims resolved in “a fair and timely manner.”

“Very importantly, taking this action will allow us to address remaining clergy abuse claims, all of which stem from allegations dating back several decades ago, in a way that will allow funds to go directly to victims,” the archbishop wrote. 

Archbishop Aymond said no parish funds – such as money received through the collection basket – would be used to resolve claims.

“Parish funds are separate from archdiocesan accounts, and the pastor decides how those are used for parish ministry,” he said. “My daily prayer is that this independent process brings about healing for those who have been harmed as a result of abuse by members of the clergy. The healing of victims and survivors is most important to me and to the church.”

He said the prospect of additional abuse cases “with associated prolonged and costly litigation, together with pressing ministerial needs and budget challenges, is simply not financially sustainable.”

“Additionally, the unforeseen circumstances surrounding COVID-19 have added more financial hardships to an already difficult situation,” he wrote.

The archbishop pledged that the archdiocese would continue to pay its bills “responsibly” and said “individual parishes, their schools, schools run by the various religious orders or ministries of the church” would not be affected.

“This will allow for our administrative offices to continue and, by the grace of God, emerge better prepared for the future,” he said.

The Archdiocese of New Orleans is the 23rd U.S. diocese (six archdioceses and 17 dioceses) to file for Chapter 11 protection since 2004, when the Archdiocese of Portland was the first to reorganize its finances under the weight of sex abuse settlements. Three other religious institutes also have filed for Chapter 11 since 2009.

In acknowledging the bankruptcy court now controls the process, the archbishop said he hoped the reorganization would be completed “as soon as possible” without any interruption in ministry.

He also said he believed the process would allow the archdiocese “to renew our commitment to the faithful and the New Orleans community by restructuring our financials, increasing our transparency and creating a path forward” in serving its “core mission: bringing Christ to others.”

The archdiocese established a website – www.nolacatholic.org/renew – containing information on the Chapter 11 filing and other questions.

Click here for a letter from Archbishop Gregory M. Aymond and for other information about the filing. Information will be available at nolacatholic.org/renew.