DOJ Opposes New Orleans Archdiocese $230 Million Bankruptcy Exit

The New Orleans archdiocese’s bankruptcy exit plan contains improper releases and injunctions that are detrimental to child sex abuse claimants and other stakeholders, a Justice Department unit said.

The proposal would channel those claims into a settlement trust that prohibits pursuing other claims against nonbankrupt third parties, such as insurers and other related Catholic entities, without the creditors’ consent, the US Trustee said in a Thursday objection in the US Bankruptcy Court for the Eastern District of Louisiana.

The archdiocese’s plan includes a $230 million settlement with survivors who previously moved to dismiss the case. The diocese had previously reached ...