New records released by the Archdiocese of New Orleans in its bankruptcy case offer the fullest accounting yet of the church’s financial house, and a peek inside how Archbishop Gregory Aymond and other church brass were managing it leading up to the May Day filing.
In nearly 2,000 pages of disclosures filed into the federal court record before a deadline late Friday, the archdiocese details $243 million in claimed assets and $139 million in claimed liabilities.
The church is far from underwater, the documents suggest, though what that means for those with claims against the archdiocese could take years to unravel.
The documents offer exacting detail in some areas but are also missing some key numbers. The value for a sprawling array of church properties is listed as “undetermined,” for instance, and there are no updated estimates of what dozens of sexual abuse claims could cost the local church.The largest claimant, Hancock Whitney Bank, is listed as being owed $37 million in state facilities bonds that helped the local Catholic Church rebuild after Hurricane Katrina, plus at least $10 million in debt guarantees made by the archdiocese for the St. Anthony’s Gardens project, the documents show.
The Covington senior living complex appears to have been a financial sinkhole for the archdiocese. It has been cited, on top of mounting sexual abuse claims that now number in the dozens, in recent downgrades of the church’s bond ratings by credit agencies.
A church spokesman said the heavily indebted St. Anthony’s Gardens is approaching financial stability after a change in management and improved occupancy.
There are thousands of smaller claims against the local church, so far. Many are refunds of a few hundred dollars for events that were canceled. Many more are for medical services like trips to urgent care, ambulances, hospital procedures and doctor’s visits, likely for the thousands of employees for whom the archdiocese serves as health insurer.
Others are for vendors, like Xerox, or utilities, like Entergy Corp. Local businesses pepper the pages of claimants in line for payment in the Chapter 11 proceeding. Before the coronavirus hit, the archdiocese owed $489 to Brandon’s Bee Removal.
Some records hint at larger legal issues and other financial moves. The Federal Emergency Management Agency has a claim of $834,740.10; a whistleblower lawsuit related to FEMA claims is listed in a separate section.
It is owed $2 million from a BP claim, and in April, nine schools within the archdiocese received coronavirus stimulus loans from area banks totaling $5.5 million.
The church, serving half a million New Orleans-area parishioners, joined more than two dozen other dioceses and Catholic religious orders across the U.S. that have sought financial protection from creditors since the clergy-abuse scandal boiled over in 2002.
The documents filed Friday will inform negotiations between the archdiocese and a committee of creditors that includes several sexual abuse survivors and Hancock Whitney. Those creditors will likely seek to reel in further assets under the church’s control.
It may be a few months until the bankruptcy judge sets a “bar” date, ordering anyone with claims against the archdiocese from before May 1 to file them by then. A flood of new claims is expected before the claims door shuts.
In the meantime, the cost in legal fees alone is high and mounting for the church.
Jones Walker LLP, the law firm charged with walking Aymond and the archdiocese through the Chapter 11 process, has already been paid $448,000 for its bankruptcy work. The firm also received some of the biggest archdiocese payouts in the months preceding the bankruptcy filing. From February through April, the firm received nearly $1.9 million in payments.
An official with the firm did not immediately return a message.
A spokesperson for the archdiocese said the $1.9 million was for the firm’s work defending the church in more than 30 pending lawsuits, some in retainer fees and other sums for completed legal work.
Much remains hidden. The archdiocese disclosed dozens of pending abuse claims with undetermined potential payouts, as well as scores of small payments to undisclosed recipients.
As of February, the archdiocese told investors in its municipal bonds that it expected it could pay out as much as $8.5 million in “personal misconduct” claims against clergy.
The spokesperson said the archdiocese “listed the value as undetermined as well as contingent, unliquidated and disputed. We do not know the value of the abuse claims as this will be determined through negotiations and/or through the court process.”
The archdiocese lists scores and scores of properties it owns outright, few of which have any appraised value attached.
Bankruptcy rules allow such vagaries at this stage, particularly in cases where the “book value” may be markedly different from a property’s fair market value.
The archdiocese has previously disclosed real-estate holdings of $70 million as of the end of 2019.
According to a May 4 analysis by Fitch Ratings as it lowered the local church’s bond rating in the wake of the bankruptcy filing, the archdiocese reported “a favorable net asset position of $81.8 million, with nearly $160 million in ‘readily marketable securities.’”
The archdiocese had $140 million in “unrestricted cash” as of year’s end, the report said. It listed $40 million in bonds, $44 million in unfunded pension obligation and $47 million in guaranteed debt for Saint Anthony’s Gardens in the negative column.
Friday’s filing also listed numerous “artifacts” and other property, from candlestick holders to stained glass in St. Louis Cathedral. There are statues, sculptures and centuries-old oil paintings on the clinical list of church assets — and numerous crucifixes.
The value listed beside nearly all of those pieces — many of which may be priceless in the eyes of the faithful — is also “undetermined.”
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