A federal trustee has appointed five abuse claimants to an official committee representing creditors in the Vermont Roman Catholic Diocese’s effort to reorganize its depleting finances in U.S. Bankruptcy Court.
The claimants — VTDigger doesn’t typically identify alleged victims of abuse without their consent — are part of a pool of more than 30 people whose unresolved priest misconduct lawsuits against the state’s largest religious denomination sparked the church to seek Chapter 11 protection this fall.
Under federal law, the diocese will present the court with a tally of its financial assets and liabilities as part of its bankruptcy petition. Judge Heather Cooper, based in Burlington, will then decide if church leaders can develop a reorganization plan that would require approval from both the court and creditors.
The latter group will be represented by the formally titled Official Committee of Unsecured Creditors, with its five members selected by the U.S. Trustee Program — a division of the Justice Department responsible for overseeing the administration of bankruptcy cases.
“I’m glad to hear that we’ve got a committee,” Cooper said at an online hearing Tuesday.
The judge welcomed the committee’s attorneys from the national law firm of Pachulski Stang Ziehl & Jones, whose work the diocese is required to pay for.
In response, committee counsel Brittany Michael told the court, “We’re looking forward to this hopefully being a productive and quick diocese bankruptcy case.”
Cooper also continued her interim order allowing the church to temporarily maintain its current staff, bank accounts and bookkeeping procedures until she issues a final ruling on those matters at the next hearing, set for Dec. 17.
The Vermont diocese is the nation’s 40th Catholic entity to seek Chapter 11 protection. Its leaders are hoping a bankruptcy declaration will allow them to cap a continuing wave of lawsuits for a scandal dating back to 1950.
But claimants and their counsel want any ruling to not only cover their unresolved claims but also set aside money for people who may come forward in the future to report abuse.
The reorganization request — which the diocese has outlined on its website — is intended to cover only its administrative office and not the separately funded local entities it oversees for the state’s reported 100,000 Catholics, including 63 parishes, 12 schools, three residential care homes and Vermont Catholic Charities.
In a Thanksgiving statement, Vermont Catholic Bishop John McDermott noted the diocese’s challenges.
“The reorganization,” McDermott wrote, “will likely last for months to come. Our parishes continue to face a decline in membership and sacramental celebrations fueled by demographic shifts and other reasons. The number of priests available to serve our churches remains low and our seminarian count is very small.”
“We all need to learn to rely more and more upon the grace of God,” the bishop concluded, “as we address our future.”
Read the story on VTDigger here: Five abuse claimants to represent creditors in Vermont Catholic bankruptcy case.