Committee seeks $500M in parish assets in Vermont bankruptcy case

A committee representing abuse survivors in a Diocese of Burlington, Vermont, bankruptcy case is seeking to include an estimated $500 million in parish-related assets as part of the diocese’s bankruptcy proceedings, according to local reports.

As Zeale News previously reported, the diocese filed for Chapter 11 bankruptcy protection in September 2024 after a growing number of lawsuits alleged decades-old clergy sexual abuse. The diocese said depleted assets and limited insurance coverage prompted the filing. Chapter 11 allows the diocese to continue operating while reorganizing its finances as it works to compensate abuse survivors.

NBC5, a local news outlet, reported that the committee representing abuse survivors filed a June 25 motion asking the bankruptcy court to add nearly 70 diocesan parishes and Catholic high schools as mediation parties. The schools include Rice Memorial High School and Mount St. Joseph Academy.

According to NBC5, the committee said excluding the parishes and schools from mediation would prevent a “comprehensive settlement.”

The outlet reported that the motion also alleges the diocese transferred approximately $500 million in parish-related assets into individual trusts in 2006, which the committee argues should be included in the diocese's bankruptcy reorganization plan.

As Zeale News previously reported, the diocese has settled 67 clergy sexual abuse lawsuits since 2006 and acknowledged credible and substantiated allegations of sexual abuse against 40 priests dating back to 1950. 

In a September 2024 affidavit, Burlington Bishop John J. McDermott said no priests currently serving in the diocese have had a credible, substantiated allegation made against them. Many priests who did have such allegations made against them are now deceased, according to the bishop.

According to VTDigger, the diocese has paid approximately $34.5 million to settle those lawsuits over the past two decades and now faces 119 abuse claims in the bankruptcy case.

According to NBC5, the diocese had not publicly responded to the committee's motion as of June 25.