Christian Brothers Order Facing Bankruptcy Due to Abuse Victim Payouts

In short:

A court has heard the Christian Brothers religious order will run out of cash by September, as it spends $1.7 million a week paying victims of abuse.

An application from the order to place a stay on all civil claims against it has been adjourned to next week.

What's next?

Lawyers for victims told the court they wanted the matter dealt with in August, when the court was set to hear the Christian Brothers's plans for its asset sale scheme.

The Christian Brothers religious order is spending $1.7 million a week paying victims of abuse and will run out of cash by September, a Sydney court has heard.

An application from the Catholic body to place a stay on all civil claims against it has been adjourned to next week, with lawyers representing more than 200 abuse survivors arguing they need more time to consider the consequences.

Christian Brothers brought an application for a moratorium in the Supreme Court of NSW, warning that any more time spent in court would whittle away money that should be reserved for victim payouts.

It comes days after The Congregation of Christian Brothers Oceania Province released a statement, revealing it was seeking to sell off its 36 properties to pay abuse victims, who would be treated as creditors.

The properties were estimated to be worth $216 million, but the statement admitted even after their sale, there was not enough money to pay what victims were entitled to.

'Limited resources left'

About a dozen barristers and lawyers representing alleged victim survivors of abuse at Christian Brothers's facilities argued against the moratorium on Wednesday, telling the court their clients, many of whom are "very psychiatrically damaged people", would not handle news that their cases were being stayed.

In arguing for a moratorium, barrister for Christian Brothers, Stewart Maiden KC, said the religious order had $23 million in cash, and had lost an average of $1.7 million a week since October to victim payouts.

He said the current estimation was that Christian Brothers would run out of cash by September 13, and a moratorium would allow money to be reserved for all claimants.

"There is very limited resources left," Mr Maiden said.

" If those resources are expended fighting court proceedings that will be to the detriment of all those not party to those proceedings. "

Abuse victims' lawyers given more time

The court heard there were 32 matters of alleged abuse by Christian Brothers listed for trial in the next three months alone, and there were 540 applications in process with the National Redress Scheme for abuse survivors.

Lawyers for victims told the court they wanted the matter dealt with in August, when the court was set to hear the Christian Brothers's plans for its asset sale scheme.

Barrister Andrew Harding SC argued lawyers would not be able to contact clients in time.

"A week is not long enough to obtain proper instructions from 85 plaintiffs who are psychologically injured and vulnerable people,"

he said.

Judge Peter Brereton said he believed the fairest outcome was to adjourn the matter until Thursday next week, to give abuse victims' lawyers more time.

Lawyers for Christian Brothers also called for an immediate moratorium on civil cases until the full hearing next week, arguing publicity of the arrangement would cause victim survivors to "race for the court door" to claim their money.

But Judge Brereton dismissed that request.