Court questions Vermont Catholic Diocese plan to sell Rice Memorial High to supporters

A U.S. Bankruptcy Court judge is questioning a Vermont Roman Catholic Diocese request to sell its flagship Rice Memorial High School to supporters for $4.3 million — or 14% of a church-commissioned appraisal of $30.5 million — as part of the diocese’s Chapter 11 financial reorganization case.

“While I do appreciate the continuation of a nonprofit mission is a factor, that does not dilute the duty of the debtor in this case to maximize the value,” Judge Heather Cooper said Tuesday at a hearing in Burlington. “I do think we have a dispute on fair market value, and it is something that does need to be addressed.”

The diocese has asked the court for permission to privately offer the grade 9-12 South Burlington campus to the new nonprofit entity RMHS Inc., whose principal officers are the nine members of the Rice School Board, according to articles of incorporation recently filed with the state.

“The diocese’s position is that the $4.3 million represents a fair market value,” Steven Kinsella, lawyer for the church, told the judge. “This is not a sweetheart deal.”

But lawyers for a creditors’ committee representing more than 100 people who have filed clergy abuse claims against the diocese are contesting the plan. They want the court to open any sale of the 42-classroom building and surrounding 27 acres to public offers in hopes of drawing higher bids and more money for settlements.

“We’re not opposed to Rice (supporters) participating in a sale process or being the ultimate purchaser of the property,” Brittany Michael, lawyer for the creditors’ committee, told the judge. “If Rice really has the best and highest offer here, then a competitive process will prove that.”

Cooper — charged with reviewing any sale and its impact on creditors — capped arguments by calling for a future evidentiary hearing, yet to be scheduled, to tease out more specifics.

“At this point we do have outstanding issues,” the judge said. “There has to be more evidence to satisfy the court that the process undertaken here was designed reasonably to maximize the return.” 

The state’s largest religious denomination filed for Chapter 11 protection in the fall of 2024. The diocese said that a past series of nearly 70 priest misconduct settlements had reduced its bank-and-buildings holdings by half — to about $35 million — with more than 100 other abuse claims dating as far back as 1950 yet to be resolved.

As part of the process, the church has received court and creditor permission to publicly sell a few of its properties, including its South Burlington headquarters for $3.13 million and Rutland’s former Loretto Home senior living facility for $1 million. 

The diocese filed a court request in July for approval to sell Rice — whose 400 students returned to campus Tuesday — to a group of unnamed “dedicated donors.”

“Significant concern exists that a fully public sale process would severely and negatively impact student enrollment at RMHS, which the purchaser indicated would force it to reduce and potentially withdraw its offer,” church lawyers wrote in their request. “Additionally, the diocese will not be required to make commission payments to any brokers or agents, increasing the net proceeds available for the bankruptcy estate.”

An attorney for RMHS Inc. asked White + Burke Real Estate Advisors of Burlington to estimate the school’s market value. The firm priced the property at between $4 million and $6 million, noting in court records that the range came from a “drive by inspection” and “we did not tour the interior space.”

“This is not an appraisal,” White + Burke wrote in its report. “It is the broker’s best estimate as to what the property may be worth in the marketplace.”

In response, the creditors’ committee is questioning why supporters requested the estimate just months after a 2025 church-commissioned appraisal by Champlain Valley Appraisal Services of Waterbury reported a $30.5 million value. The latter figure, Champlain Valley said in a court filing, came from a “complete interior and exterior inspection,” “complete analysis of market conditions” and “highest and best use analysis.”

Rice began in 1917 as Cathedral High School in downtown Burlington before moving to a new name and its current South Burlington location in 1959, according to its online history.

Rice is one of three Catholic high schools in Vermont, alongside Mount St. Joseph Academy in Rutland and St. Michael School in Brattleboro. The diocese hasn’t announced any plans for the latter two institutions or its 10 schools for elementary and middle grades.

The potential sale comes as attorneys for the church and clergy abuse claimants are in mediation over who should have access to an estimated $500 million in other local parish property and possessions that were placed in trusts in 2006. Under federal law, both the court and creditors must approve any Chapter 11 reorganization plan.

Read the story on VTDigger here: Court questions Vermont Catholic Diocese plan to sell Rice Memorial High to supporters.