Developments in the bankruptcy case of the Archdiocese of New Orleans have taken a sudden, unexpected turn with the Abuse Survivors Committee’s formal objection to the most recent fee request of Jones Walker, the New Orleans law firm representing he archdiocese.
The objection appears to be hinting at a heretofore undisclosed conflict of interest of one or more Jones Walker attorneys and even throws out the word “disqualification” for Jones Walker’s failure to make proper disclosures of prohibited connections or “personal interest adverse to the estate (archdiocese).”
This new twist could conceivably throw a major obstacle into the path of ongoing settlement negotiations for more than 500 claimants of sexual abuse by priests.
The objection notes that the Bankruptcy Code requires that a professional – in this case, the Jones Walker law firm – retained by a debtor not “hold or represent an interest adverse to the estate” and that the professional be “disinterested.”
It also noted that the standards for determining a conflict are “strict” and that “attorneys engaged in the conduct of a bankruptcy case ‘should be free of the slightest personal interest which might be reflected in their decisions concerning matters of the debtor’s estate or which might impair the high degree of impartiality and detached judgment expect of them during the course of administration.’”
The committee’s objection points out that the Bankruptcy Code’s ethical standards mandate that “all known connections of the applicant with the debtor, creditor or any other party in interest” should be revealed to the court.
It further notes that disclosure requirements “are broader than the rules governing disqualifications, and an applicant (attorney or any employee of the law firm) must disclose all connections regardless of whether they are sufficient to rise to the level of a disqualifying interest…”
It says that courts may deny all compensation to professionals who fail to make adequate disclosure, and “counsel who fail to disclose timely and completely their connections proceed at their own risk because failure to disclose is sufficient grounds to revoke an employment order and deny compensation.”
While the committee’s objections were non-specific as to what conflict might exist, LouisianaVoice has written extensively about potential CONFLICTS, including the fact that current archdiocese general counsel Susan Zeringue is the wife of Jones Walker partner Wayne Zeringue.
The archdiocese has already paid out more than $41 million in professional fees, much of that to Jones Walker.

