The trustee for bonds issued on behalf of the bankrupt Roman Catholic Church of the Archdiocese of New Orleans negotiated a settlement that allows bondholders to be paid interest — but not principal — during the pendency of the case, Bond Buyer reported. The diocese filed for reorganization under the weight of sexual abuse claims in May, with $38 million of outstanding revenue bonds among its debts, according to filings in the United States Bankruptcy Court for the Eastern District of Louisiana. TMI Trust Co., trustee for the bonds, negotiated the settlement with the archdiocese that the court approved, TMI said in a material event notice posted on the Municipal Securities Rulemaking Board’s EMMA filing system on Wednesday. "The order approving the settlement agreement provides that, during the pendency of the bankruptcy proceeding, the archdiocese is authorized to pay interest due on the bonds according to the payment schedule provided for in the bond documents," TMI's notice said. "Bondholders will not receive payment of any principal due on the bonds during the pendency of the bankruptcy proceeding." TMI said that the archdiocese paid the missed July 1, 2020 interest payment on the bonds, and that bondholders will be paid on Nov. 20. The missed interest payment that will be paid totals $930,206.25, but the missed annual principal payment of $1.385 million remains unpaid, according to the settlement, which also states that TMI did not agree to support a plan of adjustment. U.S. Bankruptcy Judge Meredith S. Grabill approved the settlement Nov. 2. It contains the agreement between TMI and the archdiocese.
