NEW ORLEANS — The Catholic Archdiocese of New Orleans has filed for bankruptcy protection.
The voluntary filing addresses mounting financial pressures on the church from the Coronavirus shutdown and clergy abuse claims.
Archbishop Gregory Aymond said the Chapter 11 bankruptcy request affects only church administration expenses.
“We are aware that some people are questioning will my school be open, will my parish be open,” Aymond said. “The answer to that is simply yes. Nothing will change.”
There are about 500,000 Catholics in Greater New Orleans.
Aymond said bankruptcy would allow the church to reorganize and to be more efficient and more effective.
“There are times, years, for many years now we have gone over budget. We can no longer do that and we should not have been doing it then.”
The Archbishop admits, the church simply cannot afford the costly litigation of mounting clergy sex abuse claims.
With the bankruptcy declaration, all of the pending lawsuits and mediation requests from victims and survivors are expected to be stayed in state court.
The cases would then be decided by a federal bankruptcy judge.
“It could be that otherwise, it could be that some would be helped and some would not be helped,” Aymond said. “This way we believe we can treat all of them equally and fairly.”
The Survivors Network of Those Abused By Priests (SNAP) released a statement saying the bankruptcy declaration is a move that is less about protecting assets and more about protecting secrets.
SNAP claims “This a disappointing but not surprising move, as Archbishop Gregory Aymond now follows in the footsteps of dozens of catholic officials who have chosen to declare bankruptcy rather than allow survivors of clergy sexual abuse to bring their claims forward in open court.”
Archbishop Aymond did not reveal what he expects the sex abuse cases to cost the church and its insurance companies. But he did make a point of saying these types of claims will be paid.
“We simply cannot afford any more the costly litigation,” Aymond said. “It is incredibly expensive. It’s incredibly complex and because of the number of cases we have, this could go on for years and years and years.”
The Archdiocese confirms it has assets and liabilities between $100 million and $500 million.
Assets listed include a $306 million endowment and $77 million worth of land and buildings.
Church liabilities include $38 million in bonds, more than $500,000 dollars in employee health claims and $8.5 million dollars now set aside for abuse-related claims.
“The Archdiocese of New Orleans is solvent,” Aymond said. “We have money, but if this were to play itself out it would be very difficult to be able to do what we’re supposed to do.”
Vicar General of Finance Father Patrick Carr expects the Archdiocese to emerge from bankruptcy in a year to year and a half.
“What we’re telling our creditors is they will be 100 percent paid,” Carr said. “We will pay all of our bills.”
After Hurricane Katrina, the Archdiocese reorganized in a move that shuttered dozens of churches and merged parishes across Metro New Orleans.
Archbishop Aymond said it is not his intent for that to happen this time around.