Louisiana diocese set to file for bankruptcy, negotiate settlement with abuse victims

CNA Staff, Oct 10, 2024 / 13:20 pm (CNA).

A Louisiana Catholic diocese is preparing to file for bankruptcy as it moves to settle numerous claims brought against it by victims of sexual abuse.

The Diocese of Alexandria will conduct a “mediated resolution” with abuse victims before filing for Chapter 11 bankruptcy, diocesan lawyers said in a letter last month. 

In 2019 then-Alexandria Bishop David Talley released a list of 27 priests who had served in the diocese and who had been credibly accused of sexual abuse. The majority of those claims stemmed from allegations of abuse before 1970. 

Additions to the list have ultimately brought the number of credibly accused priests to 32. Talley in 2019 said there had been “no standard response on the part of our past bishops and clergy to the allegations made.” 

It is not clear exactly how many abuse claims have been filed against the diocese. The Sept. 24 letter from the law firm Gold Weems Bruser Sues & Rundell, a copy of which was obtained by CNA, said the diocese has retained Louisiana-based mediator John Perry to oversee mediation “in order to address the claims in a global way and to attempt to provide as much parity as possible among the claimants.”

“The diocese’s goal is to negotiate a global resolution with all claimants which would then be filed as a prearranged Chapter 11 bankruptcy,” the letter said. 

The attorneys wrote that “no detailed agenda has been set,” but “the discussion will include the mediation process, potential insurance coverage, and available diocesan assets,” after which future meetings would be scheduled. 

Adam Horowitz, an attorney representing several claimants against the diocese, told CNA on Thursday that “if this pre-bankruptcy settlement approach is to be successful, the diocese must provide a comprehensive disclosure of its financials and insurance information — just as it would be required to do if the diocese were in bankruptcy court.”  

“Anything short of full transparency will result in an unsuccessful negotiation,” he said.

The letter, meanwhile, expressed hope that “the mediation will resolve all claims without the lengthy delays and huge professional fees incurred as has happened in the Archdiocese of New Orleans’ bankruptcy.” 

The New Orleans Archdiocese has been embroiled in a yearslong bankruptcy process over abuse claims; the archdiocese recently made a $62 million settlement offer to victims, though abuse survivors there are asking for approximately $1 billion in compensation. 

The archdiocese said in September of last year that it would ask “parishes, schools, and ministries” for monetary contributions in order to protect their assets during the archdiocese’s bankruptcy proceedings.

In 2021 Louisiana passed a “lookback” law allowing victims of abuse a three-year window to file lawsuits addressing abuse that may otherwise have been outside the statute of limitations.

The state Supreme Court upheld that law in June, reversing a decision earlier in the year that struck the law down as unconstitutional.

Source: https://www.catholicnewsagency.com/news/259769/louisiana-diocese-set-to-file-for-bankruptcy-negotiate-settlement-with-abuse-victims