Bankruptcy Judge Lets Abuse Victims Pursue Parish Property in Vermont Diocese Case

In a written order, Burlington-based Judge Heather Cooper authorized clergy-abuse survivors to bring a lawsuit seeking access to the trust-sheltered property of nearly 70 Vermont parishes, potentially worth half a billion dollars. The decision does not guarantee any distribution but opens an “adversary proceeding” to assess the legal status of those assets. The Vermont Roman Catholic Diocese, which filed for Chapter 11 protection in late 2024 after previous settlements reduced its top-level holdings to about $35 million, has already spent $2 million on legal fees and sold two properties to raise cash.

Claimants, organized by a federally appointed committee and represented by Brittany Michael, argue that without a declaration the diocese can avoid responsibility to survivors. Diocesan lawyers, including Steven Kinsella of Fredrikson & Byron, fear that further litigation will leave insufficient resources for both the case and survivor compensation. The court has not set a timetable for the next steps, and mediation talks are scheduled for the coming week.