The Roman Catholic Diocese of Burlington filed for bankruptcy protection on Monday, a maneuver through which the church will seek to resolve scores of sex abuse claims and preserve its assets.

The state's only Catholic diocese, which has paid out more than $30 million to sex abuse survivors in recent decades, still faces 31 pending civil lawsuits related to decades-old abuse claims, according to the petition filed in federal bankruptcy court in Vermont.

Most of the pending lawsuits were triggered by Vermont lawmakers' 2019 decision to lift the statute of limitations for civil claims related to sexual abuse of children. One of those cases had been scheduled for trial earlier this month but was abruptly canceled without public explanation, VTDigger.org reported.



Dozens of dioceses across the country have turned to bankruptcy court in the face of lawsuits from parishioners or former parishioners who say Catholic priests sexually abused them as children. The history of rampant abuse that church leaders covered up for decades has left dioceses with huge legal bills today.

The Vermont diocese, which publicly named 40 former priests who were credibly accused of abusing minors, says it no longer has insurance coverage to offset the costs of sex abuse litigation.
In a court filing, recently installed Bishop John J. McDermott said the diocese intends to use bankruptcy to "fairly and equitably fulfill the Diocese’s obligations to all survivors of sexual abuse." Specifically, he wrote, the church risks depleting its remaining assets to pay out jury awards or settlements in just a handful of cases, leaving the diocese without funds to compensate other victims.
But attorneys representing sex abuse victims tend to see bankruptcy petitions as yet another way for dioceses to avoid compensating plaintiffs the full amount a jury would find they are owed.

"In a bankruptcy, the diocese is able to pay only a fraction of that," said Jessica Arbour, a Florida-based attorney who has four pending lawsuits against the Burlington diocese.

A spokesperson for the diocese said the church would be issuing a statement on its bankruptcy filing "later this week."
The bankruptcy process will require the diocese to open its financial books in new detail. Sex abuse survivors and church leaders will likely tussle over which assets should be considered part of the estate.

In 2006, as sex abuse claims were already being brought forward, the diocese moved individual parish assets into separate "charitable trusts." The petition filed on Monday states that the diocese also has investment accounts worth $15.7 million, mostly to support retired priests, that it asserts are "not property of the estate."
"There will be a significant amount of time and resources spent on testing whether the disclosure of assets is accurate," Arbour said.

The diocese employs 54 people and owns eight parcels around Vermont, according to McDermott's court filing.

An initial hearing is scheduled for Thursday at the federal courthouse in Burlington.