In a surprise move, Vermont’s Catholic Diocese seeks to dismiss its 2-year-old bankruptcy case

The Catholic Diocese of Vermont has asked a U.S. Bankruptcy Court judge to dismiss its Chapter 11 reorganization case. Church lawyers stated in a court filing that the two-year legal process has cost $2 million in legal fees with no clear conclusion.

The request follows private mediation sessions held on Monday and Tuesday between diocese attorneys and a committee representing more than 100 creditors who are claimants of clergy abuse. During these meetings, the diocese offered a collective settlement of $29.4 million, which would average $247,000 per claimant. The creditors' committee declined the offer. Lawyers for the committee said the refusal came after they learned the court would consider a lawsuit seeking access to an estimated $500 million in local parish assets held in trusts since 2006.

The diocese originally filed for bankruptcy on September 30, 2024, after nearly 70 settlements regarding priest misconduct reduced its holdings from approximately $70 million to $35 million. More than 100 other abuse claims dating back to 1950 remain unresolved.