Archdiocese of N.O. files for Chapter 11 bankruptcy amid sex abuse litigation

The Archdiocese of New Orleans announced Friday that it is filing for Chapter 11 bankruptcy.

Archbishop Gregory Aymond said in a statement that the filing only affects the Archdiocese’s administrative offices at Walmsley Avenue and the offices on Howard Avenue. Aymond says the action will not affect individual church parishes or their schools.

“The move was necessitated by the growing financial strain caused by litigation stemming from decades-old incidents of clergy abuse as well as ongoing budget challenges,” Aymond said. “The unforeseen circumstances surrounding COVID-19 have added more financial hardships to an already difficult situation.”

The Archbishop says the purpose of the filing is to allow time to ‘develop a reorganization plan’ over how the church’s available assets and insurance coverage will be used to settle outstanding clergy sex abuse lawsuit settlements. Aymond says the reorganization will allow settlement money to go directly to clergy sex abuse victims.

“No parish funds will be used to settle claims. It is a pastor’s responsibility to decide how parish funds should be used to support parish ministry and this process preserves that principle,” Aymond said. “I strongly believe that this path will allow victims and survivors of clergy abuse to resolve their claims in a fair and timely manner.”