Reorganization

The Diocese filed for Chapter 11 bankruptcy in response to ongoing financial challenges related to settlements of lawsuits involving past sexual abuse by clergy. Over the past several years, significant funds have been allocated to settle cases, and the removal of the statute of limitations in Vermont has led to additional claims that the Diocese is unable to fully fund. Chapter 11 reorganization allows the Diocese to manage these financial obligations in a way that ensures fairness for all survivors while maintaining essential diocesan ministries.

Chapter 11 bankruptcy allows an organization to reorganize its finances, create a process for creditors to assert claims against the Diocese, and propose a plan to pay creditors, including survivors of past abuse. For the Diocese, this means establishing a process to fairly distribute available funds to those with claims against it. The Diocese will continue its operations and ministries during this time, although it will undergo financial restructuring.

The bankruptcy filing applies solely to the Roman Catholic Diocese of Burlington and does not extend to parishes or other affiliated diocesan agencies. Although Chapter 11 pertains to the Diocese, we cannot guarantee that parishes or other related entities will remain unaffected throughout the proceedings.

The decision was made after extensive consultation with diocesan leadership and legal counsel, including the College of Consultors, the Diocesan Finance Council, the Presbyteral Council, and other key bodies. Due to the removal of the statute of limitations for cases involving sexual abuse of minors, the Diocese faces more than 25 legal claims, with insufficient financial resources to settle these claims or fund future potential lawsuits.

The Diocese has spent tens of millions of dollars to settle cases over the past decade:

- In 2010, it settled 29 lawsuits for over $20 million, requiring the sale of several diocesan properties.

- In 2013, the Diocese settled 11 cases for $6.75 million.

- Since 2019, after the statute of limitations was lifted, it settled an additional 20 cases for $4.5 million, using unrestricted investments and regular operating funds.

The reorganization under Chapter 11 aims to ensure that all claimants, survivors of clergy sexual abuse, are treated justly and equitably. Through this process, funds will be distributed fairly among those with claims against the Diocese, ensuring that no single group of survivors receives a disproportionately large settlement at the expense of others.

The Diocese remains committed to supporting survivors of sexual abuse. The decision to file for Chapter 11 is intended to establish a fair process for compensation, and the Diocese apologizes deeply for the pain caused by the abuse. Survivors are encouraged to reach out to the Diocesan Victim Assistance Coordinator for support and resources.

A special page dedicated to the reorganization process is available on the Diocese’s website. This page will provide resources and will be regularly updated as the process moves forward.

In 2019, the State of Vermont removed the statute of limitations for cases involving sexual abuse of minors, allowing claims from incidents that occurred as far back as 40 to 60 years ago. This legal change has contributed significantly to the number of claims the Diocese now faces, leading to the current financial difficulties.

Over the past 20 years, the Diocese has implemented comprehensive programs to ensure the safety of children and vulnerable adults. These measures include the Office of Safe Environment Programs, which works diligently to prevent abuse and protect children within the Church. The Diocese remains committed to these efforts moving forward.

To support survivors or learn more about the Diocese’s efforts to create safe environments, please visit the Diocese’s Victim Assistance page. The Diocese encourages prayer and support for all those affected by clergy abuse.

For ongoing updates on the reorganization process and additional resources, please visit the Diocese’s website regularly. The Diocese will ensure that information is made available to the public as the process continues.