A judge in Orleans Parish Civil District Court on Wednesday granted a request from the City Council to temporarily stop the disbursement of most of the money derived from the contentious Wisner Trust. The ruling is part of an ongoing lawsuit the council brought against Mayor LaToya Cantrell and the trust’s board in July over whether the city is unnecessarily ceding millions of dollars every year to a group of nonprofits and private individuals. 

“Those are public funds, they need to be accounted for as public funds,” Judge Kern Reese said on Wednesday following his ruling. 

Reese had already granted the council a temporary restraining order last week that halted spending in the short-term. But Wednesday’ ruling granted a temporary injunction, a longer-lasting ruling intended to stay in place until the conclusion of the case. 

“The Council appreciates the Court’s careful consideration of this matter and today’s ruling,” Councilwoman Helena Moreno said in a statement. “We have asserted that these assets belong to the people of New Orleans and for their benefit, and we will keep pushing to prevail on their behalf.”

The dispute revolves around a trust founded in 1914 by businessman Edward Wisner that contained thousands of acres of land in southern Louisiana. The land generates millions of dollars a year. Under the initial terms of the trust that money was split annually between the city, the Salvation Army, Tulane University and Charity Hospital, which is now owned by LSU. 

But following a lawsuit from Wisner’s widow, the trust was amended to give 40 percent of the funds to the “Wisner ladies.” Today, the Wisner ladies portion goes to roughly 50 private individuals who descended from those women and their attorneys. 

The trust was originally intended to end after 100 years — in 2014. Former-Mayor Mitch Landrieu even went to court in 2012 to ensure the trust would expire and revert to city control. But when 2014 came, Landrieu signed a series of one-year extensions on the trust. Cantrell did the same when she came into office in 2018.

But in 2020, rather than signing a short-term extension, the Cantrell administration signed a new agreement that cemented the status quo revenue sharing in perpetuity. It also put the funds in control over a private board, replacing a public body that had previously been overseeing the funds.

The City Council’s lawsuit argues that in 2014, the trust should have ended and that all of the land and the revenue it generates should have gone to the city. It also argues that Cantrell didn’t have the legal authority to sign the 2020 agreement. 

On Wednesday, the council’s attorney, Judy Barrasso, argued that the Cantrell administration had violated the Louisiana State Constitution by effectively donating city property to a new trust. She said the agreement also violated local law that requires City Council approval for the dispossession of any immovable city property. 

“All of this was done without any oversight, any approvals,” Barasso said. “The 2020 agreement is absolutely null.”

Barasso argued that the injunction was necessary because if the judge ultimately rules in the council’s favor, it won’t be able to reasonably recover the funds that the Wisner Trust disperses in the meantime. She said the city would be required to “chase hundreds of people across the country.”

“There are so many beneficiaries and we don’t know who they all are,” Barasso said.

The arguments against the injunction mainly came from attorneys representing the Wisner Trust board, created by the 2020 agreement. Attorneys representing the Wisner family interests also made a short statement opposing the injunction.

The Cantrell administration, meanwhile, barely participated in the hearing. A lawyer from the City Attorney’s office, Corwin St. Raymond, was present, but only to tell the judge that the administration wanted to hire outside counsel. Judge Reese pointed out that the lawsuit was served in early August, and that they’ve already had plenty of time to do so. He said that Raymond would have to act as the administration’s attorney, but he did not participate in the remainder of the hearing.

Judge Reese appeared sympathetic to the council’s argument.

“In this court’s estimation, it was not properly modified, it was not properly extended,” Reese said, referring to the trust. “The court finds [the funds] are not to be under private management.”

The injunction stops the Wisner Trust board from dispersing any funds to anyone aside from the city of New Orleans. It also stops the Cantrell administration from spending any of the city’s portion without the approval of the court.

“No disbursement without court approval,” Reese said

Reese made one exemption for funds from a $30 million settlement with BP in 2016 for damages caused by the Deepwater Horizon oil spill. The trust can continue to disperse those funds, he said.