A U.S. Bankruptcy Court judge in Burlington issued an order allowing clergy abuse claimants to pursue parish assets held by the Vermont Roman Catholic Diocese, potentially opening access to approximately half a billion dollars in property and holdings across nearly 70 parishes throughout the state. The ruling permits abuse claimants to file a lawsuit to determine whether they are entitled to these local holdings, which the diocese had attempted to shelter through trust arrangements established in 2006.
Judge Heather Cooper’s July 28 ruling acknowledged the potential for extended litigation and substantial attorney fees if the matter proceeds to trial rather than settlement. The diocese had previously filed Chapter 11 bankruptcy protection in late 2024, citing prior settlements related to clergy misconduct that reduced its main financial holdings to approximately $35 million. The claimants’ legal representatives argue that the collective parish assets, valued at up to $500 million, should be available to compensate abuse survivors, as the diocese continues to face 119 pending claims dating back decades.
The diocese and its legal team have expressed concerns about the costs associated with continued litigation, warning that prolonged proceedings could deplete funds needed to compensate survivors. The diocese has already incurred $2 million in legal expenses over the previous two years and now faces mediation talks scheduled for this week as one path toward resolution. The court has not yet announced further scheduling or procedural steps regarding the matter.
In recent years, the diocese has pursued asset sales to raise funds, including the sale of its South Burlington headquarters for $3.13 million and a former senior living facility in Rutland for $1 million. The diocese is also seeking court approval to transfer its Rice Memorial High School campus in South Burlington to a new nonprofit organization for $4.3 million. The Vermont diocese is among 44 U.S. Catholic entities that have sought Chapter 11 protection, and any reorganization plan requires approval from both the court and creditors under federal law.
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