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The Roman Catholic Diocese of Burlington has asked a federal bankruptcy court to dismiss its Chapter 11 case, saying talks with abuse claimants have stalled and litigation is adding time and expense. The motion does not end the case by itself: as of October 3, 2026, no ruling on the request was established in the available court and news reports. Meanwhile, a separate dispute over whether parish and school assets can be pursued remains unresolved.
What the Diocese is asking the court to do
The Diocese filed for Chapter 11 on September 30, 2024, to address clergy abuse claims through a process in which creditors can assert claims and the Diocese can propose a plan. In its public explanation, the Diocese says the petition covers the Diocese itself, not parishes or affiliated agencies.
On September 30, 2026, Bishop John McDermott announced that the Diocese had filed a motion seeking to exit the Chapter 11 process. A motion is a request for a court decision, not a decision in itself. Vermont Public reported on October 1 that the request was pending; the sources available as of October 3 did not establish a ruling or a next confirmed hearing date.
Why the Diocese says it wants to leave Chapter 11
The Diocese says mediation and negotiations with abuse claimants have stalled, while litigation continues and the case may require more time and expense. Those are the Diocese’s stated reasons, not findings made by the bankruptcy judge. In its September 30 statement, McDermott said: “Therefore, after consultation with our legal team and consultative bodies, the Diocese of Burlington has filed a motion before the Bankruptcy Court to exit the Chapter 11 process.”
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Why parish and school assets are part of the dispute
The central asset question is whether certain property or transfers involving parishes, schools and related entities can be reached in claims connected to the bankruptcy. The Diocese’s position that its petition applies to the Diocese itself does not, on its own, resolve that separate question.
A July 28, 2026 decision by the U.S. Bankruptcy Court for the District of Vermont granted the unsecured creditors’ committee derivative standing to pursue specified claims concerning the Diocese, parishes, schools and related entities. That gave the committee permission to bring those claims; it did not determine who owns the assets, establish that parish property is liable for abuse claims, or decide that the property must be used to pay them.
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What reported asset figures mean
Local outlets have described the parish-related assets in different ways. Vermont Public reported more than $400 million in assets transferred to local parishes in recent decades. VTDigger reported an estimated $500 million in parish assets held in trusts. These are differently framed media-reported figures, not a single court-certified valuation, and they should not be added together.
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| Party or record | Position or action | What it establishes |
|---|---|---|
| Diocese of Burlington | Says negotiations have stalled and continuing litigation could bring more delay and expense; has asked to exit Chapter 11. | The Diocese’s stated rationale and a pending request—not a court ruling. |
| Official Committee of Unsecured Creditors | Said it would oppose dismissal and continue pursuing claims related to parish trusts and transfers. | The committee’s stated response, not a judicial finding about the assets. |
| Bankruptcy court, July 28, 2026 | Granted derivative standing for specified claims concerning the Diocese, parishes, schools and related entities. | Permission to pursue claims, not a final decision on ownership, liability or payment. |
What happens next
The bankruptcy court must act on the dismissal motion before the case can be described as dismissed. Until then, the request and the committee’s opposition are competing positions in an ongoing case. The asset claims also remain a separate live issue: the July standing decision allows them to proceed, but does not settle their merits.
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