NEW ORLEANS — A Roman Catholic diocese in central Louisiana appears ready to join 40 other organizations of its kind in the US by filing for federal bankruptcy protection as the church’s worldwide clergy molestation scandal continues reverberating, according to a letter obtained by the Guardian.
But the diocese in question – that of Alexandria, Louisiana – is first aiming to reach a global settlement with those who already have pending clergy abuse claims demanding damages from the institution before it then files what it called a “prearranged chapter 11” financial reorganization. As the letter authored by local attorneys for the Alexandria church put it, the purpose of the strategy is to avoid “the lengthy delays and huge professional fees” incurred by the May 2020 bankruptcy filing by Louisiana’s Archdiocese of New Orleans.
It was in September that attorneys for clergy abuse claimants and church officials in the New Orleans archdiocese bankruptcy proposed competing settlement plans that are hundreds of millions of dollars apart. The proceeding’s costs have already exceeded $40m in fees paid mostly to the archdiocese’s attorneys and other professionals after New Orleans archbishop Gregory Aymond initially estimated the case could be resolved for about $7.5m.
A 24 September letter that the Alexandria diocese sent to attorneys representing people who allege molestation at the hands of priests and deacons serving in a region with about 38,000 Catholics mentioned how the church had retained the same mediator eventually brought into the fold in the New Orleans archdiocese’s bankruptcy.
The Alexandria diocese's letter said the mediator, John Perry, had been hired “to facilitate a mediated resolution with all parties.” Six attorneys’ groups pressing civil court cases against the diocese had agreed to a “voluntary stay of litigation while Mr Perry works through the mediation process.”
Notably, the missive explained that the Alexandria diocese had opted to pursue the course laid out in the letter because the Louisiana state supreme court in June had upheld a 2021 law allowing child molestation victims to pursue monetary damages over long-ago sexual abuse.
Diocesan attorneys said the law had “substantively” altered the Alexandria church’s ability “to engage in the claims and litigation process related to … claims of sexual abuse to minors”, and the organization wanted “to address the claims in a global way and to attempt to provide as much parity as possible among the claimants.”
The Alexandria diocese has been led by bishop Robert W Marshall Jr since August 2020. Its position exploring a prearranged bankruptcy strikes a stark contrast with that of the archdiocese of New Orleans, a close ally of Alexandria which serves a larger region of about half a million Catholics.
The New Orleans archdiocese’s lawyers caught many clergy abuse claimants and their attorneys by surprise when they filed for bankruptcy protection.
The New Orleans archdiocese’s bankruptcy attorneys have also argued that the 2021 law does not apply to its bankruptcy because it was not on the books at the time the proceeding began, an argument that clergy abuse survivors and their advocates vehemently dispute.
Meanwhile, the Dominican Sisters of Peace religious order in the Louisiana capital of Baton Rouge has asked the federal government to strike down the law in question, saying it unconstitutionally removed the group’s rights against being sued past a filing deadline that in most cases was just one year.
The Alexandria diocese’s letter said the organization has retained out-of-state bankruptcy attorneys rather than the New Orleans firm hired by that city’s archdiocese.
According to Penn State’s law school, 24 of the 40 US Catholic religious organizations who have sought Chapter 11 bankruptcy protection have concluded the process.
The San Diego archdiocese’s 2007 bankruptcy settlement was the most lucrative for clergy abuse claimants. The church and its insurers paid more than $198m to 144 victims – $1.4m per claim.
The diocese of Rockville Centre on Long Island, New York, recently agreed to pay more than $323m to about 530 clergy molestation survivors to resolve a bankruptcy that it filed in 2020 as well. That amounts to about $609,000 a claim.
The Husch Blackwell lawyers brought on by Alexandria’s diocese to explore bankruptcy represented their firm’s hometown Catholic archdiocese of Milwaukee in a Chapter 11 case that culminated in a $21m settlement for about 330 abuse claimants.
In New Orleans, which is about 205 miles to the southeast of Alexandria, more than 500 clergy abuse claimants opened with a demand of about $2m per claim. The New Orleans church’s Jones Walker attorneys countered with an offer of about $125,000 a claim.
The Alexandria diocese in 2019 released a list of 27 clergymen who were faced with substantial allegations of sexual abuse of children or misconduct dating back to the 1940s. A few more names have since been added to the roster, bringing the number of clergymen identified to more than 30.
Yet the Survivors Network of those Abused by Priests (Snap) said in a statement Monday, in part, that the updated list omits at least two late clergymen who have been publicly labeled as “credibly accused” by Catholic officials elsewhere: Joseph Pellettieri (New Orleans and Baton Rouge) and Brian Highfill (New Orleans and Las Vegas).
Snap’s statement said that two other late clergymen who were criminally investigated for alleged child sexual abuse are not on any church credibly accused lists but merit being named in Alexandria’s roster. The investigation into one of those clergymen – Jaime Medina-Cruz – ended without action after he was found dead in a hotel room in 2013, and the case involving the other – Donald McCarthy – was dismissed when authorities determined too much time had passed to file charges against him, Snap said.
Catholic dioceses and religious orders released such lists under pressure from the unyielding revelations and sustained backlash associated with the international church’s decades-old clergy molestation scandal. But the disclosures have often prompted more victims to come forward and demand damages for their abuse, to which a steadily growing number of dioceses have responded by filing for federal bankruptcy protection.
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