The Roman Catholic Diocese of Burlington has filed for bankruptcy protection after years of financial losses from settlements paid to survivors of clergy sexual abuse.
Vermont’s last remaining diocese joins 39 other U.S Catholic religious organizations that have filed for Chapter 11 bankruptcy which allows entities to continue normal operations while reorganizing finances.
Reorganization “is in the best interests of the Diocese, its creditors, and all parties in interest,” the Burlington Diocese argued in an emergency motion filed alongside its bankruptcy petition on Sept. 30.
VTDigger first reported on the Church’s bankruptcy filing on Monday.
Since the early 2000s, the Burlington Diocese has paid out over $34 million to survivors abused by clergy as far back as the 1950s, and to this day still faces 31 more pending civil lawsuits, according to Bishop John McDermott’s affidavit for the bankruptcy case.
In the process, the diocese has had to sell several properties, including the former Chancery Office site on North Avenue in Burlington and Camp Holy Cross in Colchester.
Burlington Diocese’s assets and liabilities
According to the diocese’s bankruptcy petition, Vermont’s largest religious denomination holds an estimated $10,000,001 to $50 million in assets, but owes between $1,000,001 and $10 million, with the number of creditors ranging from 100 to 199 — most of whom are sexual abuse survivors.
The diocese’s debt may only increase over the years, due to legislation passed in 2019 that removes the statute of limitations for civil suits pertaining to childhood sexual abuse.
“The Diocese would suffer irreparable harm if this Motion is not granted on an emergency basis,” Vermont’s sole diocese argued in its emergency motion.
What happens under bankruptcy protection
Reorganization would permit the Burlington diocese to continue operating its 63 parishes, paying its 54 employees and providing “essential” ministry and charitable services to roughly 3,000 Vermonters each year, while also preserving enough funds to compensate every abuse survivor who has or may come forward in the future, the affidavit said.
“The Diocese is concerned that too large of a settlement with a select group of pending cases or a judgment in favor of a single plaintiff could leave the Diocese with insufficient assets to fairly compensate other survivors and creditors, resulting in a disproportionate allocation of the limited funds available to the Diocese,” the affidavit said. “Additionally, managing the civil court litigation and claims has been difficult and costly for the Diocese and the cost will likely only increase with the number of claims the Diocese faces.”
McDermott’s affidavit also denies that filing for bankruptcy is an attempt by the diocese to “avoid any responsibility regarding sexual misconduct by clergy or any mistakes made by the Diocese’s administration,” and argues that the diocese remains “committed to addressing the wrong perpetrated and fairly compensating survivors.”
The first hearing for the bankruptcy petition is scheduled for Oct. 3 at 1 p.m. at the U.S Bankruptcy Court in Burlington.
Bishop offers apology to survivors, resources
In a Oct. 1 letter to constituents, McDermott said he can’t guarantee that the reorganization process won’t impact individual parishes or ministries.
McDermott told diocese members that his “heart is heavy” over having to file for bankruptcy but noted “such weight pales in comparison to the pain suffered by victims of abuse.”
He also acknowledged that the diocese’s decision to move forward with reorganization might be “challenging and even triggering” for survivors and their family members.
“For that and for every aspect of dealing with the crimes of these clergy, I sincerely apology,” McDermott wrote. “This chapter in the church’s history is terrible and the harm it has caused immeasurable.”
Abuse survivors and their families can reach out to the diocese’s victim assistance coordinator for support.
Regularly updated information about the reorganization process, including a FAQ sheet, will be available on the diocese’s website.
Megan Stewart is a government accountability reporter for the Burlington Free Press. Contact her at mstewartyounger@gannett.com.
This article originally appeared on Burlington Free Press: Roman Catholic Diocese of Burlington files for bankruptcy protection
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