Louisiana diocese prepares to file for bankruptcy over clergy abuse claims [View all]

[Eugene]

Source: The Guardian

Louisiana diocese prepares to file for bankruptcy over clergy abuse claims

Alexandria diocese plans to file ‘prearranged chapter 11’ after settlement with victims to avoid ‘lengthy delays’

Ramon Antonio Vargas
Thu 10 Oct 2024 11.00 BST
Last modified on Thu 10 Oct 2024 11.01 BST

A Roman Catholic diocese in north-west 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 filed 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.

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Read more: https://www.theguardian.com/us-news/2024/oct/10/louisiana-diocese-bankruptcy-clergy-abuse-settlement