Trustee says it will fight 11% offer in NOLA archdiocese bankruptcy

The bond trustee in the Archdiocese of New Orleans bankruptcy plans to fight the court-approved plan of adjustment's offer of 11 cents on the dollar.

The $37.97 million of outstanding Series 2017 Louisiana Public Facilities Authority refunding revenue bonds would be restructured into bonds worth $4.245 million to be paid off in 10 years with 8.5% interest, according to the bond trustee's Tuesday posting on EMMA.

"The bond trustee does not believe that the proposed treatment of the bonds under the plan is permissible under the bankruptcy code, nor does the bond trustee believe that the 'liquidation analysis' used by the plan proponents to set the proposed amount of new bonds is accurate," bond trustee Argent Institutional Trust told bondholders.

Argent said it plans to file an objection to the plan before the end of October.

The U.S. Bankruptcy Court for the Eastern District told creditors they should vote on the proposed plan by Oct. 29.

"If confirmed and implemented, the plan will bind all creditors of the debtor, including the bondholders, regardless of whether they voted for or against the plan or objected to its terms," Argent wrote.

The archdiocese didn't immediately respond to a request for comment.

The archdiocese, Official Committee of Unsecured Creditors and certain parishes and affiliates of the archdiocese filed a plan of reorganization and disclosure statement on July 15 that was later twice amended.

The plan's terms conflicted with full repayment the bond trustee's attorneys said the archdiocese promised earlier in the bankruptcy. The bond trustee's attorneys accused the archdiocese of securities fraud in June.

Early in the bankruptcy the archdiocese agreed to pay interest but not principal during the bankruptcy. The archdiocese has recently been arguing to recharacterize the bankruptcy payments as principal.

The archdiocese has been in bankruptcy since 2020 following a series of lawsuits alleging its priests had engaged in child abuse.

According to an archdiocese filing to EMMA the archdiocese had a total of $449 million in liabilities as of Dec. 31, 2024.