Vermont’s only Roman Catholic Diocese in Burlington has filed for bankruptcy amid a growing number of lawsuits.
Over 30 cases have piled up, all pointing to allegations of child abuse by clergy dating back decades. Bishop John McDermott laid it all out in a recent court filing, revealing the diocese has spent a staggering $34 million settling 67 lawsuits since 2006. And with the 2019 lifting of the statute of limitations on such claims, they’re bracing for more fallout, facing 31 additional lawsuits.
Digging into the diocese’s pockets, they’ve sold church properties, tapped into insurance funds, and even dipped into their investments and operating funds just to manage these settlements. The Roman Catholic Church is not the first to face legal woes as the LDS Church was sued this year as well for mishandling of donations.
The affidavit reveals: “Due to the lack of insurance coverage and the Diocese’s depleted assets, 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.”
A History Haunted by Allegations
Back in 2019, the diocese itself disclosed a bombshell report. It turns out there were “credible and substantiated” allegations of sexual abuse against 40 priests in Vermont since 1950. Most of these cases happened before 2000, and thankfully, none of these priests are in ministry today.
To manage this crisis, the diocese has had to make some serious financial moves, all documented in their affidavit. The affidavit explains that the goal of the bankruptcy is “to fairly and equitably fulfill the Diocese’s obligations to all survivors of sexual abuse.”
Voices from the Courtroom
Celeste Laramie, an attorney for a third of the plaintiffs, is not buying the bankruptcy line. She describes it as “more reflective of moral bankruptcy than actual financial bankruptcy,” especially considering the diocese supposedly has around $500 million in assets they’ve been less than transparent about.
Laramie said, “For decades the Burlington Diocese covered up horrific sexual abuse of generations of Vermont’s children by sexual predators it employed as priests.” According to her, the diocese has spent millions on lawyers to dodge responsibility, all while still asking for weekly donations from parishioners.
And then there’s John Evers, another attorney who is eagerly waiting to uncover more about the church’s hidden assets. He said “We expect there will be a fair amount of litigation through the bankruptcy proceeding where efforts are made to try and get the full picture of what the assets are and not just what the diocese has said or has listed in their financial statements or has said otherwise publicly.”
Calls for Bankruptcy Refrom Amidst Financial Scandal
Also speaking out is Jessica Arbour, a prosecutor and attorney at Horowitz Law, who criticizes the use of Chapter 11 bankruptcy as a shield by entities like the Diocese. She argues that such a strategy not only protects the Diocese from future litigation and the obligation to disclose evidence but also allows them to carry on with business as usual without significant changes.
Arbour emphasizes the need for an overhaul of the bankruptcy code to prevent such moves: “There needs to be bankruptcy code reform because so many of these entities are using Chapter 11 as a way not only to avoid responsibility but to continue doing business as usual,” she said.
Despite these tactics, Arbour remains hopeful that the remaining funds of the Diocese will ultimately go to the victims.
This situation is far from over, and it’s not just happening in Vermont. Across the United States, 32 dioceses and three religious orders are in the same boat, having also filed for bankruptcy protection.
As this situation unfolds, the Burlington Diocese promises more updates and a detailed statement on their bankruptcy decision.
