Court rules Burlington parishes are not separate from diocese in bankruptcy

Parishes in the Diocese of Burlington, Vermont, are “not separate legal entities” from the diocese itself and may be included in bankruptcy proceedings related to Church abuse cases, a federal court ruled this week.

Judge Heather Cooper said in a July 28 decision in U.S. Bankruptcy Court that a committee of abuse victims could seek compensation from the reportedly “hundreds of millions of dollars” tied up in diocesan parishes and other assets.

The diocese had argued in part that opening those assets to legal proceedings would require “substantial” litigation “against over 64 defendants” linked to the diocese, though Cooper said that the federal bankruptcy process helps “streamline” such legal disputes.

Attorneys for the diocese also argued that the parishes in general “were built with funds raised by the parishioners” and that their current financial assets “are limited for the specific charitable, religious, and educational purposes” established by the parishes themselves.

The judge said that “more clarity” about the extent of diocesan property “could help the ongoing efforts” to reach a final settlement in the case. The Burlington Diocese filed for bankruptcy in 2024 amid large numbers of abuse lawsuits.

Including parishes directly in legal proceedings is relatively rare in diocesan bankruptcy cases. In most instances, dioceses pursue global settlements with abuse victims without directly involving parish assets.

When a diocese files for bankruptcy it will usually ask the court to halt any litigation against individual parishes, in part because a parish being sued for the actions of a diocesan priest could claim the diocese itself is liable and sue the diocese in turn.

Yet parishes will often be required to contribute to diocesan abuse settlements internally. In 2025, for instance, the Diocese of Buffalo, New York, said its parishes would be required to pay up to 80% of their “unrestricted cash” to help fund a $150 million settlement there.

Parishes in the Diocese of Rockville Centre, New York, meanwhile, were also required to contribute to a settlement trust after the diocese said in 2024 that it would pay $323 million to abuse survivors.

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