Archdiocese of New Orleans Bankruptcy

Church Interior

In Re:  The Roman Catholic Church for the Archdiocese of New Orleans, Chapter 11, No. 20-10846

TO ALL STAKEHOLDERS AND PARTIES IN INTEREST:

This bankruptcy is about the sex abuse victims.  Hundreds of children were raped, sodomized, and physically tortured by the clergy of this Archdiocese.  While the abuse lasted for generations, the Archdiocese of New Orleans buried allegations, moved rapists among its parishes, and bullied most victims into silence.  Archbishops Philip Hannan, Francis Schulte, Alfred Hughes, and Gregory Aymond had a sacred duty to protect the children of this community and they utterly failed to do so.  The Archdiocese’s misconduct is the prime mover of this bankruptcy.

The Archdiocese sees this case through a single lens:  the survivors are “financial and operational difficulties.” Patrick Carr Declaration, at ¶ 9 [Rec. Doc. 14].   The survivors are not “difficulties”; they are adult witnesses of crimes against the children of the New Orleans community.  As such, the victims seek the truth.  The victims need to know what the Archdiocese knew, when it knew it, and what it willfully did with that knowledge.  The victims deserve some explanations.  For example, why did the Archdiocese prioritize pedophile priests over innocent children?  Why did the Archdiocese fail to report abuse to authorities even when the pedophile priest submitted a written confession to its most senior clergy?  In state court, those victims were on the path to the truth.  They filed lawsuits, named their assaulters, sought documents related to their claims, and moved the District Court for testimony.  Depositions were taken, documents were exchanged, and the District Court conducted dozens of hearings.  The victims fought for themselves and, in so doing, started to reclaim the agency that was taken away from them as children.

The Archdiocese again deprived them of this agency by filing for bankruptcy.  Its filing was designed to stop Archbishop Aymond’s May 28th deposition and block the publication of thousands of pages of documents.  Rather than embrace truth and transparency, the Archdiocese continued moved its campaign of delay and silence to another forum.

The Archdiocese’s seeks to perpetuate a damning narrative before this Court.  The Archdiocese boldly states that the sexual abuse that is the subject of the state court lawsuits “occurred more than 50 years ago”.  Patrick Carr Declaration, at ¶ 9 [Rec. Doc. 14].  It takes a blind eye to the existence of at least 20 plaintiffs abused in the 1970s and 1980s, well within the past 50 years.  Each one of the state court petitions identifies the timeframe of the abuse.  This intentional misstatement callously repudiates these victims.  It delegitimizes their abuse and implies that the credibility of their abuse accusations cannot be tested or that the survivors should have gotten over it by now.  As to credibility-the main witness, the abuse victim, is very much alive and prepared to present their cases in a trial court.  As to the durability of the harm, one can only have that attitude if you believe that “little people suffer little hurts.”

The Debtor also obfuscates the financial worth of the Archdiocese and the Non Debtor Catholic Entities. On the one hand, the Archdiocese reports the total value of its assets to fall within the $100-$500 million range (Form 201, at 4).  However, the real and personal property of the Non Debtor Catholic Entities and the Archdiocese exceeds $2.1 billion.  The Catholic Mutual Relief Society of America 2019-2020 Insurance Declaration, at 1 (providing coverage of assets valued at $2,163,078,000), attached as Exhibit “1”.  The Debtor, in all of its first-day pleadings makes no attempt to explain this discrepancy.  As the Debtor undoubtedly will seek reorganization around a channeling injunction and release for these Non Debtor Catholic Entities, the presentation of the valuation range on the voluntary petition without further explanation simply does not present an accurate asset picture.

Abuse survivors have uncovered the Archdiocese’s decades of pattern and practice only by way of contentious state court litigation.  Undersigned counsel has litigated 22 cases at full bore:  (1) filing dozens of motions, some of which revealed involvement of the New Orleans Saints on issues directly relevant to the victims’ claims; (2) attending more than 35 District Court hearings and status conferences; (3) reviewing almost 10,000 Archdiocese documents; (4) producing thousands of pages from clients; (5) briefing dozens of motions and oppositions in the District Court; (6) issuing more than 15 District Court subpoenas; (7) retaining experts in the treatment of clergy sexual abuse victims; and (8) deposing the Archdiocese’s Archivist and IT representatives to locate the various secret abuse files kept by the Archdiocese in a safe locked inside a vault, the Archbishop’s locked files in his desk drawer, and the Vicars General own separate cache.

At the time of this bankruptcy filing, undersigned was in mid-preparation for a District Court prescription trial to determine whether the Archdiocese engaged in fraudulent concealment of the sexual abuse claims.  The deposition of Archbishop Aymond had been noticed, a list of fact witnesses to be deposed was provided to the Archdiocese and being negotiated, a draft corporate representative notice of the Archdiocese itself had been propounded, a witness list identifying 37 witnesses had been served on the Archdiocese, and even the deposition of a Scranton Archdiocese Vicar General had been scheduled as well as issuing a subpoena for records from the Diocese of Las Vegas.   The truth of the history of abuse in this Archdiocese has been revealed only by dint of the hard work of the plaintiffs and counsel in these District Court cases.

All of this was done to empower the sexual abuse victims – to help them regain agency of their trauma.  The rape of children is a thief that keeps on stealing for the rest of their lives.  It starts by stealing their youth, their faith and their personal their relationships with friends, wives and children.  Many victims experience intense suicidal ideations and drug addiction, and a number of our own clients have experienced both.  These victims are in fact survivors who have suffered and fought through the pain inflicted on them as children.  Studies have shown that sexual abuse victim does not even tell loved ones or therapists of the abuse for the first time until their mid-40s to 50s or even later.  The average age at which a victim comes forward is at the age of 52.

Undersigned stand ready to continue to help the victims in this bankruptcy.  Through the institutional knowledge gained from discovery in hard-fought District Court litigation, undersigned will execute their duties to protect, fight, and communicate on behalf of victims.

Communication is important to any litigation whether it is with the client, the court, or opposing counsel.  Undersigned sent a letter to counsel for the Archdiocese ten days before the bankruptcy filing, requesting an opportunity to discuss the filing and to pro-actively develop a plan that would meaningfully assist the victims.  LTR from Trahant to Zeringue, attached as Exhibit “2”.  Not only did the Archdiocese’s counsel fail to respond to this letter, they refused to respond to a question in a March status conference before a state court judge about whether it was even contemplating bankruptcy.  The Archdiocese has found a new judicial forum and a new judge, but it cannot evade the developing District Court record that documents is liability.

Bankruptcy by ambush yields distrust.  The bankruptcy process needs fiduciaries and counsel who communicate openly and candidly about the Archdiocese’s assets, liabilities and reorganization goals.   While disagreement can be expected, this case will be successful only if there is candor.  Plaintiffs contemplate working with an official committee that will represent the survivors’ interests in that spirit and hope that they and the committee will have a debtor that acts in the same manner.