Judge allows clergy abuse claimants to pursue $500M in Vermont parish assets
The decision comes as the diocese faces mounting claims and seeks to preserve enough funding to compensate survivors.
The Diocese of Burlington, Vermont, could see an estimated $500 million in parish assets brought into its bankruptcy case after a federal judge allowed clergy sexual abuse claimants to pursue the holdings in court.
U.S. Bankruptcy Judge Heather Cooper issued the ruling July 28, allowing the dispute over the parish assets to proceed in a separate lawsuit, according to an Aug. 4 report from VTDigger.
As Zeale News previously reported, the committee moved in June to bring nearly 70 parishes and Catholic high schools into mediation, arguing that their inclusion was necessary for a comprehensive settlement. The current dispute centers on approximately $500 million in parish assets placed into individual trusts in 2006, which the committee says should be available to compensate survivors.
The diocese maintains that the parish trusts are separate from its bankruptcy estate, leaving the newly authorized lawsuit to determine whether those assets can be used to help compensate survivors.
The diocese filed for Chapter 11 protection in September 2024 after depleted assets and limited insurance coverage left it facing lawsuits alleging decades-old clergy sexual abuse. According to VTDigger, it has paid approximately $34.5 million to settle 67 such lawsuits over the past two decades and now faces 119 additional claims dating as far back as 1950.
VTDigger reported that the diocese filed an objection July 21, arguing that the committee should not be allowed to pursue the parish assets.
During the July 28 hearing, Steven Kinsella, an attorney representing the diocese with the Minnesota firm Fredrikson & Byron, warned that continued litigation could leave the diocese unable to cover its legal costs and compensate survivors, according to the outlet.
“The diocese is very concerned that if this proceeds,” Kinsella said, “it will not have sufficient funds to pay for the litigation and, ultimately and most importantly, compensate the survivors.”
VTDigger reported that Cooper raised the same concern in her written ruling.
“Unless settled,” she wrote, “there may be years of litigation ahead and millions of dollars spent in attorneys’ fees and costs that could have been paid valid abuse claims.”
Closed-door mediation between the diocese and the survivors committee is also set to continue, VTDigger reported. The court has not yet set a schedule for the lawsuit.
