NEW ORLEANS (LA)
Times-Picayune [New Orleans LA]
August 20, 2024
By Stephanie Riegel
U.S. Bankruptcy Judge Meredith Grabill said Tuesday she will appoint an independent expert to help determine whether the long-running Archdiocese of New Orleans bankruptcy can be settled, raising the stakes in a case that’s grown increasingly bitter between the church and the abuse survivors who have filed claims.
More than four years after the nation’s second-oldest diocese filed for Chapter 11 bankruptcy protection, Grabill raised the possibility for the first time that forging a settlement agreement to financially compensate abuse survivors — one that the church can afford and that survivors will approve — may not be possible.
“I need someone who can tell me if there is a path forward,” Grabill said during the hearing Tuesday. “There needs to be a path forward. If not, we need to cut our losses and look elsewhere for a solution.”
Grabill’s independent expert, who will add another layer of oversight and cost to a case that has already rung up more than $40 million legal fees, will serve for 60 days and be selected from outside the New Orleans area. It isn’t clear whether Grabill will tap a legal expert, like a retired bankruptcy judge, or someone with corporate financial expertise, but whoever she picks will not have ties to either side in the contentious case.
“We live here in New Orleans and it’s kind of a small town and there are a lot of connections,” she said. “I need someone who doesn’t have any of those connections.”
The appointment comes as several contentious measures await action from the court. Grabill has been asked to withhold a portion of attorneys’ fees until the end of the case and, at the same time, to appoint an outside fee examiner to review legal bills.
She has also been asked by attorneys who, collectively, represent more than 100 of the 550 or so abuse survivors in the case, to appoint a trustee who would take over management of the case for the archdiocese from Archbishop Gregory Aymond.
Settlement plans forthcoming
Attorneys for both the archdiocese and the court-appointed committee that represents all abuse survivors in the case said Tuesday they will file competing settlement plans before September 16.
Once those plans are filed, it will take months before one of the plans is confirmed. A supermajority of abuse survivors must vote to confirm a settlement plan, which must also be approved by the court.
Before going through that process, which is expected to add tens of millions of dollars more to the legal tab, and taking up the other issues before her court, Grabill said she wants to make sure the various factions in the case can eventually come together.
“This case is tough, and people are tired, frustrated,” she said. “I would not be doing my job if I didn’t try to instill some confidence in this process. I believe in this process but I am not the one voting on this plan. I need some help.”
In bankruptcy cases, a judge is shielded from details of negotiations that are going on behind the scenes in mediation talks. As a result, Grabill is not privy to the reasons for the drawn out negotiations, which is why she has said she needs an outside expert to guide her.
In a prepared statement, the archdiocese said its priority “is to equitably
compensate abuse survivors while creating a more financially sustainable archdiocesan administration for the future.”
Schism?
Andrew Cain, an attorney who represents the committee of abuse survivors, said he was optimistic that there was a path to a settlement, though he acknowledged that there have been disagreements between two factions of attorneys representing different sets of claimants.
Cain, who along with other court-appointed attorneys are representing the committee of survivors, is planning to file a separate settlement plan from the archdiocese. But in recent hearings, they have indicated they are working more collaboratively than in the past with the archdiocese.
Meanwhile, there is a separate group of attorneys who represent survivors, and who had already filed lawsuits in state court before the May 2020 bankruptcy filing froze lawsuits against the church. These attorneys are not part of the official committee and are working on a contingency fee basis.
Attorney Soren Giselson, who belongs to the second group, acknowledged their differences Tuesday.
“If the schism is solidified and maintained through the plan confirmation, there is no hope of the plan getting approved,” he said.
Email Stephanie Riegel at stephanie.riegel@theadvocate.com