Diocese of Burlington Seeks to Abandon Bankruptcy Days After Losing Bid to Dismiss Survivors Committee’s Lawsuit Exposing Asset-Shielding Scheme

September 30, 2026, Burlington, VT — The Official Committee of Unsecured Creditors (the “Committee”) representing survivors of childhood sexual abuse in the Chapter 11 case of the Roman Catholic Diocese of Burlington, Vermont, Case No. 24-10205-HZC (Bankr. D. Vt.), criticizes the Diocese’s motion filed today seeking to dismiss its own bankruptcy case. The Diocese’s dismissal motion was filed just three days after the Court rejected the Diocese’s and the Parishes’ attempts to end the Committee’s lawsuit uncovering how the Diocese moved and sheltered assets to keep them from survivors.

On September 27, 2026, Judge Heather Z. Cooper ruled in favor of the Committee, allowing claims to proceed for a declaratory judgment that the Diocese’s parishes, schools, and “parish trusts” are, in substance, operating divisions of the Diocese, rather than separate entities shielded from creditors. The Court rejected nearly every argument raised by the Diocese, parishes and schools seeking dismissal of the Committee’s claims, allowing the Committee to continue pursuing recovery of assets transferred by the Diocese into parish trusts for as little as one dollar, including transfers made as recently as January 2024.

Today—exactly two years after the Diocese first sought Chapter 11 protection—the Diocese asked the Court to let it walk away from the case rather than answer those claims.

“Two years ago, the Diocese avoided accountability on the eve of my trial and said bankruptcy was necessary for survivors to be treated fairly,” said Daniel Stack, chair of the Committee. “Three days after a federal judge refused to let the Diocese and its parishes shut down the very case that could expose how it moved hundreds of millions of dollars out of survivors’ reach, the Diocese wants to leave the process altogether. That is not the conduct of an institution acting in good faith, it is a second attempt to avoid accountability.”

The Diocese’s motion attributes its decision to mounting legal costs. The Committee disputes that framing. The litigation expenses the Diocese now points to are the product of decisions the Diocese and the Parishes made—including unsuccessful litigation against the Committee, the parishes’ violation of the bankruptcy stay based on litigation in the federal district court, and the Diocese’s insider sale of Rice High School’s property over the Committee’s objection—rather than any unreasonable conduct by the Committee.

“The Diocese is not being forced to litigate. It is choosing to litigate every issue the hard way and then blaming the bill on everyone else,” said Brittany Michael, partner at Pachulski Stang Ziehl & Jones LLP and counsel for the Committee. “Survivors did not create this cost. The Diocese’s own litigation strategy did.”

The Committee intends to oppose the Diocese’s motion to dismiss the bankruptcy case in full and will continue to prosecute its claims regarding the parish trusts and related transfers.

Pachulski Stang Ziehl & Jones LLP represents the Committee in the case.