The Roman Catholic Church of the Archdiocese of New Orleans has filed a joint reorganization plan that would establish a settlement fund of at least $210 million to compensate victims of clergy sexual abuse, according to court documents filed in the U.S. Bankruptcy Court for the Eastern District of Louisiana.
The disclosure statement, filed on July 15, 2025, outlines a comprehensive plan that would allow the Archdiocese to emerge from bankruptcy while providing substantial compensation to approximately 660 abuse claimants. The proposal comes more than five years after the Archdiocese filed for Chapter 11 protection in May 2020.
"The primary purpose of the Joint Plan is to create a Settlement Trust for the payment of Abuse Claims," the disclosure statement reads. The plan is jointly proposed by the Debtor, the Additional Debtors (which include more than 100 parishes and church entities), and the Official Committee of Unsecured Creditors, which represents abuse survivors.
The settlement trust would be funded through multiple sources, including $130 million in cash contributions from the Archdiocese, parishes, and non-debtor Catholic entities; approximately $29.3 million from insurance settlements; a $20 million promissory note to be paid over four years; and an estimated $30 million to $55 million from the sale of affordable housing properties known as Christopher Homes.
"The Survivors' Committee anticipates the Settlement Trustee will be able to make initial distributions to claimants who do not elect to pursue litigation against Non-Settling Insurers within months of the Effective Date," the document states, projecting initial payments to abuse survivors in early 2026.
In a unique arrangement, the joint plan incorporates a "pre-packaged" bankruptcy for more than 100 additional Catholic entities, including parishes and agencies, who have not yet filed bankruptcy cases but will do so shortly before the plan confirmation. This coordinated approach aims to provide a global resolution of abuse claims across the archdiocese.
The plan also preserves abuse survivors' litigation rights against non-settling insurers, particularly Travelers Insurance Company, which provided coverage from 1973 to 1989. Claimants with cases from this period can pursue litigation against Travelers while still receiving their allocation from the settlement trust.
"Abuse Claimants will have their Settlement Trust Distribution held while they pursue litigation claims against Non-Settling Insurers," the disclosure explains. "If an Abuse Claimant elects not to pursue litigation against the Non-Settling Insurers, their litigation rights will transfer to the Settlement Trust."
Beyond monetary compensation, the plan includes what is described as "the most detailed and comprehensive Non-Monetary Plan Provisions ever agreed to by any Catholic Diocese." These provisions include enhanced child protection policies, creation of a public archive of abuse-related documents, and a Survivor Bill of Rights establishing clear procedures for handling future abuse claims.
The court has scheduled a confirmation hearing for November 12, 2025, with a voting deadline of October 29, 2025. The plan's proponents are targeting an effective date of December 31, 2025.
The fate of the plan, however, remains uncertain, as the bankruptcy court has issued an Order to Show Cause requiring the Archdiocese to demonstrate why the case should not be dismissed. This matter will be addressed at the confirmation hearing.
The document also notes that Archbishop Gregory Michael Aymond, who has led the Archdiocese since 2009, tendered his resignation letter to Pope Francis on November 12, 2024, after reaching the mandatory retirement age under Canon law. The resignation awaits a decision by Pope Leo XIV.
The disclosure statement warns creditors about risks if the plan is not confirmed and the bankruptcy case is dismissed. In such a scenario, "Abuse Claimants will be competing against other creditors, such as the Bond Trustee, to collect" and would have "to pursue lengthy litigation followed by appeals, which could take many years."
The Archdiocese is represented by Jones Walker LLP, while the Additional Debtors are represented by Heller, Draper, & Horn, L.L.C. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP and Troutman Pepper Locke LLP.
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