NEW ORLEANS — The Archdiocese of New Orleans has officially filed for bankruptcy, officials with the religious institution announced Friday.
The Archdiocese filed for Chapter 11 reorganization, citing "...the growing financial strain caused by litigation stemming from decades-old incidents of clergy abuse as well as ongoing budget challenges," leaders said in a release.
"The unforeseen circumstances surrounding COVID-19 have added more financial hardships to an already difficult situation," they added.
Church leaders said the voluntary filing will not impact masses or any schools run by or involved with the Archdiocese and its ministries. Bankruptcy will be felt in the organization's administrative offices, they said, but daily function will not be affected.
Word of the church's move first came Thursday night from a report from our partners at The Times-Picayune/New Orleans Advocate.
Archbishop Gregory Aymond, who recently recovered from COVID-19, said his prayers were with victims and survivors of clergy abuse. He also released a video message to parishioners addressing the filing.
“Most importantly, I extend daily prayers to those who are victims and survivors. May God give you healing and renewed hope,” wrote the Archbishop.
“I, along with a team of advisors, believe that reorganization will create an opportunity for us to renew our commitment to God’s people and the New Orleans community by restructuring our financials and creating a path forward in hopes that we can continue and strengthen our core mission: bringing Christ to others.”
WWL-TV Legal Analyst Chick Foret said the move gives the Archdiocese a break.
"This is the initial filing in a very complicated procedure, but what it does short term is, it hits the pause button," Foret said. "It stops the people, creditors, from collecting any debts that the archdiocese would owe at this point. They don't have the money to pay now anyway, the archdiocese says, because their cash flow has been stopped and interrupted by the coronavirus."
Any pending litigation against the Archdiocese by any alleged victims of sexual abuse will be stayed for the time being. A bankruptcy judge will decide whether those cases can move forward.
"This reorganization will also allow the Archdiocese to address remaining clergy abuse cases in a way that will allow funds to go directly to victims instead of funding prolonged, costly litigation," church officials said.