SOL Revival, Settlement History, and the Decision to File
The Diocese, founded in 1853 and covering the entire state of Vermont, attributes its chapter 11 filing to Vermont's 2019 amendment to 12 V.S.A. § 522, which eliminated the statute of limitations on childhood sexual abuse claims and authorized previously time-barred claims to be filed "at any time." Bishop John J. McDermott, the 11th Bishop of Burlington, stated in his first-day affidavit that the Diocese was a defendant in 31 active sexual abuse lawsuits as of the petition date and had publicly identified 40 priests with credible claims of abuse of a minor, 30 of whom were deceased and all of whom had been removed from ministry. The Diocese cited a lack of insurance coverage for legacy claims and depleted unrestricted assets as the reasons it could not continue defending and settling claims outside of bankruptcy.
The Diocese has described its objective as an equitable, pro rata distribution to survivors rather than disproportionate recoveries to plaintiffs who reach early judgments or settlements. That framing reflects a settlement track record that predates the filing: the Diocese resolved clergy abuse claims across four distinct waves between 2006 and 2024. It paid $2.68 million to settle seven cases in 2006–2010, $20.625 million across 29 cases in May 2010, $6.75 million across 11 cases in 2013, and $4.5 million across 20 cases in 2019–2024 — roughly $34.6 million across 67 settled claims.
The 2013 settlement was funded in part through an insurance "buyback" in which the Diocese forfeited claims for coverage on abuse allegations dating to the 1970s, while the 2019–2024 wave was funded from unrestricted investments and operating funds. The affidavit thus describes a debtor that had already spent down both liquid assets and a portion of its historical insurance coverage before the chapter 11 filing, leaving a narrower pool to fund any plan trust.
The Diocese has no prepetition funded debt of consequence and lists no traditional secured lender, mortgagee, or pledgee. As a result, the central dispute is not over debt but over the scope of the estate. The Diocese asserts in its first-day affidavit that approximately $15.7 million in investment accounts held at Charles Schwab and TD Wealth are "specific trusts" in which it holds only legal — not equitable — title under 11 U.S.C. § 541(d), and therefore are not property of the estate. That total includes a Priests' Benefit Fund retirement plan of approximately $14 million held at TD Wealth to support the care of elderly priests. The Diocese refined these positions in its amended schedules filed in August 2025.
The Diocese further asserts that all parish-level assets are held in separate charitable trusts, each with its own EIN, books, employees, and bank accounts, and that those parishes are neither debtors nor part of the bankruptcy estate. These trust and non-estate positions are likely to be central to plan negotiations, because the amount available to fund a survivor trust depends on how much property the court treats as estate property. The order referring the parties to mediation expressly places "property of the estate issues" and parish and insurer funding contributions within the scope of negotiations.
Because there is no postpetition lender, the Diocese has funded operations from collections, parish assessments, and unrestricted investment draws rather than a DIP facility. Its first-day relief was limited to operational continuity: the court authorized continued maintenance of the Diocese's insurance program, continued use of existing bank accounts and business forms, and payment of accrued prepetition employee wages for its workforce of roughly 54 employees. No cash collateral or DIP financing motion was filed.
The court entered a final order establishing claims bar dates on December 30, 2024. The order set April 4, 2025 as the deadline for both general non-abuse claims and sexual abuse claims, with governmental claims due July 7, 2025. Abuse claim forms were deemed timely only if actually received by Stretto by the deadline, with postmark treated as insufficient. The order routed confidential survivor claim forms under seal and outside the public record unless a survivor expressly requested public access, sharing confidential claim data with committee counsel and other court-approved permitted parties under confidentiality guidelines.
By September 16, 2025, 119 confidential sexual abuse claims had been filed against the Diocese — substantially more than the 31 active lawsuits cited in the first-day affidavit. On that date the Diocese moved to amend the bar date order, not to extend the April 4 deadline, but to broaden the definition of "permitted parties" who may access confidential claim data to include retained estate professionals and other entities against whom abuse claims have been asserted, while excluding any individual perpetrator. The motion also sought to permit file-sharing systems beyond Firmex, such as Box, to reduce administrative cost. A separate motion by a John Doe claimant sought leave to file a late proof of claim.
The court also established a process for survivors to address the court directly. In early April 2025, the bankruptcy court approved survivor impact statement sessions, and hearings were held in open court in May 2025.
On May 12, 2025, the Diocese moved to refer the parties to global mediation, proposing two mediators: the Honorable William J. Fisher and Michael Marks. The mediation framework is unusually broad, covering the terms of a consensual chapter 11 plan, property-of-the-estate issues, channeling injunction terms, insurance coverage disputes, the credibility and valuation of sexual abuse claims, funding contributions from insurers and parishes, the post-confirmation claims process, payment of unknown claims, and non-monetary plan provisions. Judge Fisher serves without fee other than expense reimbursement, while the Diocese pays the second mediator's fees pending any cost-sharing arrangement with insurers. Initial sessions occurred in July 2025, with further sessions scheduled for September 2025, and the framework was later amended to enlarge the completion timeframe.
With mediation underway, the Diocese has used exclusivity extensions to keep control of the plan process and avoid competing plans. The first extension, granted January 28, 2025, set a July 28, 2025 plan-filing deadline and a September 29, 2025 solicitation deadline; the second, granted July 29, 2025, moved those to August 27 and October 29, 2025. On August 26, 2025 the Diocese sought a third extension that would push the plan-filing deadline to November 25, 2025 and the solicitation deadline to January 27, 2026. The Diocese justified the third extension on the ongoing global mediation, the case's complexity around parish and trust property disputes and insurance coverage, and its stated goal of producing a consensual plan.
On August 18, 2025, the Diocese applied to employ Insurance Archaeology Services, LLC as its insurance archaeologist for a flat fee of $11,500. The engagement is structured in two phases: a Phase I review of insurance, underwriting, and litigation records to locate historical general liability, property, errors-and-omissions, and excess coverage and produce a coverage chart, followed by a Phase II evaluation of whether sufficient evidence exists to tender claims to identified carriers. The engagement focuses on pre-1972 and post-1980 insurance years — a scope that, combined with the 2013 buyback forfeiting 1970s coverage, effectively defines the insurance envelope available to fund a survivor trust.
The Diocese has also begun monetizing real estate. On August 26, 2025, it moved under § 363(f) to sell the Loretto Home, a 20,000-square-foot building on 1.33 acres at 59 Meadow Street in Rutland, to Housing Trust of Rutland County, Inc., doing business as Cornerstone Housing Partners, for $1,000,000. Pomerleau Real Estate marketed the property on MLS, CoStar, Loopnet, and Crexi and through a campaign to more than 5,000 contacts, reducing the original $2.25 million list price to $1.95 million and then $1.3 million before Cornerstone's offer was identified as the highest and best. The Diocese reported no liens, and the official committee did not oppose the free-and-clear sale.
The most contested matter on the docket concerns the committee's financial advisor, Berkeley Research Group. BRG discovered a cybersecurity incident on March 2, 2025 that involved exfiltration of sensitive data it held as financial advisor to official committees across multiple diocesan chapter 11 cases — including, in those cases, confidential survivor claim information. The U.S. Trustee filed a letter to BRG on May 7, 2025 raising concerns about a roughly two-month delay between discovery and notification, BRG's reliance on a generic docket filing rather than direct notice to affected parties, its admission that it did not know exactly what data was exfiltrated, and its reliance on assurances from the threat actor that the data was destroyed. The U.S. Trustee asked whether BRG should be disqualified for a conflict of interest or sanctioned for violating confidentiality orders.
BRG filed a notice of data security incident on May 12, 2025 detailing the timeline and its endpoint-detection response, and on May 23, 2025 filed a response to the U.S. Trustee stating that it had reached a settlement with the threat actor, was cooperating with the FBI, and should not be disqualified because it was itself the victim of the crime. BRG has continued its breach analysis in the diocesan cases. Because the breached dataset in these cases was the universe of confidential survivor proofs of claim, the resolution of the BRG matter bears directly on both ongoing claims administration and the structure of committee professional retention.
The Diocese retained Fredrikson & Byron, P.A. as lead counsel, with Obuchowski Law Offices as local counsel and Dinse P.C. as special counsel. The official committee of unsecured creditors retained Pachulski Stang Ziehl & Jones LLP as counsel, Lemery Greisler LLC as local counsel, and Berkeley Research Group as financial advisor, while Stretto, Inc. serves as claims and noticing agent.
Interim fee activity reflects a steadily building professional cost base for a case still in mediation. Through its third interim application covering the second quarter of 2025, Fredrikson & Byron sought $92,368.25 in fees and $5,143.02 in expenses, bringing cumulative fees to approximately $282,161.44. Committee counsel Pachulski Stang Ziehl & Jones sought $239,151.50 in fees and $3,066.31 in expenses in its third interim application for the same period, with cumulative fees across three interim awards reaching roughly $491,455.
| Date | Event |
|---|
| September 30, 2024 | Chapter 11 petition filed; first-day motions and Bishop McDermott affidavit |
| December 30, 2024 | Final order establishing claims bar dates entered |
| April 4, 2025 | General and sexual abuse claims bar date |
| May 7, 2025 | U.S. Trustee letter regarding BRG data breach |
| May 12, 2025 | Motion to refer parties to global mediation; BRG data-security notice |
| May 14, 2025 | Survivor impact statement session held in open court |
| July 7, 2025 | Governmental claims bar date |
| July 2025 | Initial global mediation sessions |
| August 18, 2025 | Application to employ Insurance Archaeology Services |
| August 26, 2025 | § 363 motion to sell Loretto Home; third exclusivity motion |
| September 16, 2025 | Motion to amend bar date order; 119 abuse claims on file |
Who is the claims agent for the Diocese of Burlington?
Stretto, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.
What is the bar date in the Diocese of Burlington bankruptcy?
The final order establishing bar dates set April 4, 2025 as the deadline for general and sexual abuse claims and July 7, 2025 for governmental claims. The bar date order governs which claims are subject to those deadlines.
Why did the Diocese of Burlington file for chapter 11?
The Diocese attributed the filing to Vermont's 2019 elimination of the statute of limitations on childhood sexual abuse claims, which revived previously time-barred claims and left the Diocese facing 31 active lawsuits without sufficient insurance coverage or unrestricted assets to resolve them outside of bankruptcy.
For more bankruptcy case coverage, visit the ElevenFlo bankruptcy blog.
