Vermont Roman Catholic Diocese

A U.S. Bankruptcy Court judge in Vermont has allowed clergy abuse claimants to sue for parish assets, including an estimated $500 million in local parish holdings, as part of the Roman Catholic Diocese's bankruptcy reorganization. The diocese, which filed for Chapter 11 protection in 2024, faces potential litigation over parish assets placed in trusts, with claimants arguing these funds should cover abuse settlements.

A court filing alleges that the Vermont Roman Catholic Diocese asked a 2020 job applicant to help shield funds from clergy abuse survivors by transferring assets to prepare for bankruptcy. The diocese previously established trusts in 2006 to protect parish holdings, and current and former bishops reportedly discussed protecting assets from potential judgments. The diocese is in Chapter 11 bankruptcy, with a committee of abuse claimants seeking access to parish assets placed in trusts.

Clergy abuse claimants in Vermont are seeking access to approximately $500 million in parish assets held in trusts by the Vermont Roman Catholic Diocese, which filed for Chapter 11 bankruptcy in 2024. The diocese transferred parish assets to trusts in 2006 to shield them from survivor claims, but creditors argue the transfers violated fraudulent deeds law. The case involves legal disputes over whether these assets should be available to settle clergy misconduct lawsuits.

The Vermont Roman Catholic Diocese faces potential dismissal of its Chapter 11 bankruptcy case if a viable reorganization plan is not submitted soon. The diocese sold its South Burlington headquarters for $3.13 million and has spent over $2 million on legal fees, with remaining assets at $35 million after settling clergy misconduct claims.