Diocese of Burlington asks the court to dismiss its own bankruptcy

What changed

The diocese filed its motion to dismiss (Dkt. 905) in In re Roman Catholic Diocese of Burlington, Vermont, No. 24-10205, before Judge Heather Z. Cooper. It relies on section 1112(b)(4)(A) of the Bankruptcy Code, which treats a continuing loss to the estate with no reasonable likelihood of rehabilitation as cause to dismiss. The diocese does not ask to convert the case to a Chapter 7 liquidation.

According to the motion, the diocese, its parishes, parish trusts, schools and other Catholic entities offered the committee a global settlement of about $29.43 million, on top of any insurer settlements, at a mediation on September 28 and 29, 2026. The committee declined it. The motion says the diocese has paid about $1.25 million in professional fees in the case and owes about $1.87 million more, and that it holds the proceeds of two property sales in segregated accounts.

The motion also points to the committee’s separate lawsuit inside the bankruptcy, which claims that the assets of the parishes, parish trusts and schools belong to the bankruptcy estate. The court refused to dismiss that suit on September 27, 2026. The diocese expects the dispute to take years and argues that it can be decided in state or federal court instead, where, it says, no rights would be lost.

A notice of hearing (Dkt. 907) sets the motion for Tuesday, December 8, 2026 at 11:00 a.m. Eastern, at the courthouse at 11 Elmwood Avenue in Burlington. Remote appearance is possible for those who meet the criteria in Appendix IX of the court’s local rules. Anyone who opposes the motion is asked to file a written response by 4:00 p.m. Eastern on Thursday, December 3, 2026.

The same day, Judge Cooper entered a scheduling order (Dkt. 908). It records that the committee expects to need discovery and an evidentiary hearing on December 8, directs the parties to file a stipulated schedule for the motion by October 16, and extends the court-ordered mediation from October 16 to December 31, 2026. The order notes that the diocese, while saying it has exhausted every avenue for agreement, asked to keep the option of mediating until the motion is decided.

In a statement the same day, Bishop John J. McDermott said: “I believe the Diocese has made a good faith effort to resolve this process in a timely and just manner. Unfortunately, our best offer was not accepted.” He wrote that legal and administrative costs were “well more than two million dollars, and not one dollar of these funds has been given to a single claimant.”

What it means

Nothing changes until the court rules. The case remains open, and the motion is a request, not a decision. The committee’s written response was not on the docket in the entries we could read, which run to October 2, 2026.

The abuse claims in this case are allegations, and no court has ruled on them. The diocese’s argument that survivors could pursue their claims in state or federal court after a dismissal is its own position in the motion. The committee may contest it, and the court has not decided it. Seven survivors had already sued individual parishes in Vermont state courts in December 2025 and January 2026, according to the motion.

A separate dispute is moving on its own schedule: the court will take evidence on November 19, 2026 on the diocese’s proposed $4.3 million sale of the Rice Memorial High School property, which the committee opposed.