A year after seeking to reorganize its depleting finances in U.S. Bankruptcy Court, the Vermont Roman Catholic Diocese is struggling to cover about $1.5 million and counting in related legal bills.
Under federal law, an institution requesting Chapter 11 protection must pay attorney fees not only for itself but also for officially recognized creditors — which, in the diocese’s case, includes more than 100 claimants alleging sexual abuse by clergy.
The state’s largest religious denomination filed for bankruptcy on Sept. 30, 2024, after a series of misconduct settlements reduced its assets by half, to about $35 million. Since then, the diocese has spent almost 5% of its remaining money on legal bills, forcing it to cut the workweek for staff at its South Burlington headquarters to 30 hours.
“We also have encouraged employees to seek other possible employment opportunities because we cannot guarantee any position at this time,” Vermont Catholic Bishop John McDermott wrote in a letter to parishioners.
The church and creditors are aiming to mediate a preliminary plan by Dec. 31. But the diocese already “has exhausted its unrestricted investments” and is paying for its operating expenses and bankruptcy case with the $3 million gleaned each year from an annual bishop’s appeal and a tax on the income of its 63 parishes, McDermott wrote.
