Vermont diocese files for bankruptcy amid more sex abuse lawsuits

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Washington, D.C. Newsroom, Oct 2, 2024 / 14:45 pm (CNA).

The Diocese of Burlington filed for bankruptcy on Monday in an attempt to adequately resolve its fourth and largest wave of sex abuse lawsuits filed against it since the clergy sex scandal broke in 2002. 

“While my heart is heavy with the decision to file Chapter 11 bankruptcy, such weight pales in comparison to the pain suffered by victims of abuse,” Bishop John McDermott said in a video statement released on Wednesday in which he addressed the decision to file and apologized to victims of clergy abuse. 

“This chapter in the Church’s history is horrific, and the harm it has caused, immeasurable,” McDermott said. “I know that the decision to file for reorganization may be challenging or even triggering for some survivors. For that and for every aspect of dealing with the crimes of these clergy, I sincerely apologize.” 

The diocese currently faces 31 lawsuits — with allegations dating back as far as the 1950s — after the state Legislature repealed the statute of limitations on filing civil claims in 2019 and 2021.

Previously, the diocese had spent approximately $2 million to settle its first nine cases in 2003. In 2010, it paid over $20 million to resolve 29 more cases and settled 11 cases for $6.75 million in 2013, according to the affidavit. 

To resolve these cases, the diocese utilized its unrestricted funds and liquidated most of its available assets, including its 32-acre Burlington Chancellery on Lake Champlain for $10 million in 2010 and its 26-acre Camp Holy Cross in Colchester for $4 million in 2012. 

The lawsuit will not affect the individual parishes and organizations that operate within the diocese, as their respective assets remain in separate trusts — a move the diocese made in 2006 to protect local parish community funding intended for their own religious and educational purposes from being siphoned into legal settlements. 

In his statement, and in the affidavit he filed on Monday, the bishop explained that filing for Chapter 11 bankruptcy was found to be the only way for the diocese to fairly compensate victims of abuse in current lawsuits — and any who might come forward in the future — since the diocese has limited funds, depleted assets, and lacks insurance coverage.

“Through Chapter 11 reorganization, funds will be allocated among all those who have claims against the diocese while hopefully allowing the diocese to maintain its essential mission and ministries,” McDermott stated.

McDermott further highlighted the diocese’s efforts to address the scandal and prevent future abuse through its diocesan victims assistance coordinator and its office of safe environment programs.

According to the affidavit, the diocese released a list in 2019 of 40 of its credibly accused priests, which included information about who they were and where they had been assigned in the dioceses. The diocese removed all accused clergy from priestly ministry, 30 of whom are now deceased.

“Due to the diocese’s efforts since 2002, there has only been one credible and substantiated claim of abuse,” he stated in the affidavit, adding that no current clergy face allegations of sexual abuse.