The Roman Catholic Church of the Archdiocese of New Orleans secured confirmation of its $230 million bankruptcy reorganization plan on December 9, 2025, after U.S. Bankruptcy Judge Meredith S. Grabill overruled final objections from Travelers Insurance Company and praised the immeasurable courage of 23 abuse survivors who testified during confirmation hearings.
The Seventh Amended Joint Chapter 11 Plan of Reorganization, filed in the U.S. Bankruptcy Court for the Eastern District of Louisiana (Case No. 20-10846), establishes a settlement trust funded with $130 million in cash on the plan's effective date, an additional $70 million from the sale of Christopher Homes guaranteed by promissory notes from the debtor and co-debtors, and approximately $30 million from settling insurance carriers.
The plan resolves hundreds of clergy sexual abuse claims filed against the Archdiocese and 156 additional Catholic entities that joined the bankruptcy through a joint administration order entered November 13, 2025. The additional debtors include individual parishes, churches, and Catholic charitable organizations throughout the New Orleans metropolitan area and surrounding regions.
Insurance Disputes Take Center Stage
The memorandum opinion focused primarily on resolving two remaining objections filed by Travelers Insurance Company, which unlike other carriers chose not to settle with the debtors. Judge Grabill's 17-page opinion addressed complex insurance law questions with significant implications for similar mass tort bankruptcies.
In her first key ruling, Judge Grabill held that Travelers lacks standing as a party in interest under Section 1109(b) of the Bankruptcy Code to object to proofs of claim filed by abuse survivors. The court noted that Travelers has neither accepted financial responsibility for the abuse claims nor had its liability adjudicated, distinguishing this case from the Supreme Court's 2024 decision in Truck Insurance Exchange v. Kaiser Gypsum Co., where an insurer with established financial responsibility was granted standing to object to a reorganization plan.
Judge Grabill cited reasoning from a 2025 decision by Judge Littlefield in the bankruptcy case of the Roman Catholic Diocese of Albany, New York, which questioned how insurance companies can claim standing to object to proofs of claim on the basis that they are likely to contribute to bankruptcy distributions while simultaneously claiming they are under no obligation to make such contributions. Judge Littlefield had observed that the allowance of a claim creates an obligation for the debtor, not the insurers, and that such obligation is not real until insurers either concede liability or are adjudicated to be responsible.
The court struck provisions in Sections 4.3(b) and 4.4(b) of the plan that would have granted Travelers the right to object to proofs of claim, finding these provisions contrary to applicable law. Judge Grabill emphasized that the bar date established in the case was intended to fix the universe of the debtor's liability, not Travelers' potential obligations.
Travelers had specifically objected to provisions allowing abuse claims filed after the March 1, 2021 bar date but before May 16, 2025 to be treated as timely filed. The May 16, 2025 date marked when the settlement agreement between the debtor, additional debtors, and the Official Committee of Unsecured Creditors was announced.
Despite finding that Travelers lacked standing, Judge Grabill chose to address the merits of the objection following advice from Judge Goldblatt's opinion in In re AIO US, Inc., which suggested that in close cases, courts should err on the side of considering objections on the merits rather than dismissing them for lack of standing, while employing other tools to guard against potential misuse of procedural rights for tactical purposes.
The court explained that abuse claims will be channeled post-confirmation into the settlement trust for final liquidation and payment, as is common in mass tort bankruptcy cases. Travelers expressed concern that allowing late-filed claims as timely would potentially lead to allowance and payment of many untimely and unwarranted claims to the detriment of holders of timely-filed abuse claims.
Judge Grabill noted that Travelers' own rights are well protected because the settlement trust will not be funded by any contribution from Travelers without its consent via settlement or adjudication by a court of competent jurisdiction. Section 7.4 of the plan reserves all of Travelers' rights and defenses. In the event the settlement trustee approves filing a litigation claim against Travelers in a court with competent jurisdiction, Travelers remains free to assert defenses pertaining to the timeliness of any proof of claim filing in the bankruptcy case before that tribunal.
Defense Cost Contribution Claims Rejected
In addressing Travelers' second objection, Judge Grabill rejected the insurer's argument that it should be able to seek contribution of defense costs from abuse claimants or the settlement trust if Travelers ultimately prevails in coverage litigation or if abuse claimants receive zero recovery at trial.
Travelers had relied on the Louisiana Supreme Court's 2016 decision in Arceneaux v. Amstar Corporation to argue for an equitable right to contribution based on overlapping coverage periods. However, Judge Grabill distinguished the Arceneaux case, which involved long-latency occupational disease claims where Louisiana courts have developed special rules for allocating defense costs pro rata based on time on risk.
The court explained Louisiana's eight-corners rule, established in the 1969 Louisiana Supreme Court case American Home Assurance Co. v. Czarniecki, which requires insurers to look to the four corners of the petition and the four corners of the policy to determine whether they have a duty to defend. Under this rule, if assuming all allegations in the petition to be true would result in both coverage under the policy and liability to the plaintiff, the insurer must defend the insured regardless of the outcome of the suit. The general rule in Louisiana when an insurer seeks contribution for defense costs from another insurer is to apportion defense costs equally by head.
The court noted that the Arceneaux case represents an exception to this general rule, adopting a pro rata method of apportioning defense costs specifically for long-latency occupational disease cases. In that case, the Louisiana Supreme Court applied reasoning from a Sixth Circuit case to allocate defense costs between an insurer and its insured that was considered self-insured for periods of no coverage.
Judge Grabill observed that she had not located a Louisiana case treating child sexual abuse as a long-latency occupational disease comparable to asbestos-disease and hearing loss. The court noted it stretches common sense to imagine characteristics of child sexual abuse including lengthy temporal separation between alleged tortious conduct and appearance of injury, though acknowledged that issue was not before the court.
More fundamentally, Judge Grabill found that whether Louisiana's general apportionment-by-head method or Arceneaux's pro rata apportionment applies, Travelers faces a critical problem: there is no equitable right to such contribution under Louisiana law and the record shows no overlapping coverage for any of the years covered by Travelers.
The opinion distinguished this case from the Third Circuit's 2025 decision in In re Boy Scouts of America, which Travelers cited as supporting its position. In Boy Scouts, a primary insurer settled with the debtor, leaving an overlapping excess carrier unexpectedly liable for defense costs it had a contractual right to recoup. Here, as a primary insurer without overlapping co-primary carriers, Travelers is required to absorb its own defense costs and has no claim of contribution from abuse claimants or the settlement trust.
Judge Grabill ruled that Section 6.9(d) of the plan, which provides for a Judgment Reduction offsetting any liability Travelers might have by amounts that settling insurers are found liable to pay Travelers, provides sufficient protection. The court concluded that the prohibition on non-consensual third-party releases established in the Supreme Court's 2024 Harrington v. Purdue Pharma decision is not implicated in this case.
Powerful Survivor Testimony Influences Proceedings
The confirmation hearing featured testimony from Archbishop Gregory Aymond and Archbishop James Checchio, as well as expert and fact witnesses presented by plan proponents and subjected to cross-examination by counsel for the United States Trustee and Bond Trustee. The court also reviewed four written survivor statements received over the weekend before issuing its ruling. However, the most impactful testimony came from 23 abuse survivors who shared personal accounts of their experiences.
In an unusually personal section of her written opinion, Judge Grabill directly addressed the survivors, stating she had sat with the things they told her for almost a week. The judge explicitly stated that no court system could ever make survivors whole. She heard and believed survivors when they told her that the abuse they suffered continues to affect every aspect of their lives and the lives of their friends and family, describing what survivors characterized as a rotting ripple effect resulting from abuse.
Progressive Non-Monetary Remedies
Beyond the monetary settlement, Judge Grabill highlighted the plan's non-monetary remedies, particularly what she described as a Survivors Bill of Rights. The judge stated she believed this country has not yet seen anything as progressive in these cases, though she acknowledged she could be mistaken. She noted the non-monetary terms represent the floor, not the ceiling, on efforts to prevent and detect abuse and promote transparency and healing.
The court found that the plan satisfies the requirements of Section 1129(a)(3) of the Bankruptcy Code that plans be filed in good faith and not forbidden by law. Judge Grabill also determined that the plan meets the feasibility requirements of Section 1129(a)(11), finding that while not perfect, the non-monetary remedies when implemented represent a good chance that the parties will not wind up in bankruptcy court again.
Complex Settlement Structure
The approved plan creates a settlement trust with a sole fiduciary duty to administer distributions to abuse survivors. The settlement trustee will have authority to liquidate, settle, or even abandon claims or causes of action transferred to the trust.
Certain insurance carriers designated as Settling Insurers reached agreements with the debtors under Bankruptcy Rule 9019, culminating in purchases of insurance policies free and clear under Section 363 of the Bankruptcy Code. These transactions were approved through separate motions and orders distinct from the plan itself, with no objections filed before entry of those orders. The plan recognizes and incorporates those orders.
For Travelers and any other non-settling insurers, all rights and claims under their policies issued to the debtor or any co-insured parties will transfer to the settlement trust on the plan's effective date. Section 7.4 of the plan preserves all of Travelers' rights and defenses, allowing the carrier to assert defenses regarding claim timeliness or other coverage issues if the settlement trustee pursues litigation against Travelers in courts of competent jurisdiction.
Travelers currently has a pending motion before the bankruptcy court seeking to terminate the automatic stay to file a declaratory judgment action in federal district court challenging insurance coverage for the abuse claims.
Next Steps and Implementation
Judge Grabill scheduled a status conference for May 21, 2026, at 1:30 p.m. to monitor implementation progress. The judge acknowledged that the plan contains many moving parts and that full implementation of non-monetary remedies will require bringing human resources and advisors on board. She noted that although the debtor and additional debtors will move as quickly as possible to implement all mechanics, many terms depend upon bringing human resources and advisors on board, making the six-month status conference a good opportunity to assess progress.
The court directed the debtor to make changes to plan sections affected by the rulings on Travelers' objections, file a clean final version, and if necessary submit an updated proposed confirmation order. Judge Grabill indicated confidence the order could be processed the same day as her oral ruling.
The Archdiocese filed for Chapter 11 bankruptcy protection in May 2020, with the joint administration order bringing 156 additional Catholic entities into the case in November 2025. The case represents one of numerous Catholic diocese bankruptcies filed across the United States in response to clergy sexual abuse liabilities.
This memorandum opinion supplements a separate written confirmation order that will formally approve the reorganization plan and bind all parties to its terms. The opinion provides the legal reasoning supporting the court's decision to confirm the plan over Travelers' objections.
In her concluding remarks, Judge Grabill stated that confirmation of the plan represents a first step in validating and healing the hurt endured by survivors and those who love them. She expressed that together, the Church, survivors, and the rest of the community have a real opportunity to do something extraordinary, including taking responsibility, rebuilding trust, and leading. The judge commended the hard work and steadfastness of the professionals and lay volunteers involved in the case.
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