Court weighs Vermont Catholic Diocese bid to sell Rice Memorial High for $4.3 million

The school property is being sought by RMHS Inc., an organization whose principal officers are the nine members of the Rice School Board.

A federal bankruptcy judge on Tuesday raised concerns about a Vermont Roman Catholic Diocese proposal to transfer Rice Memorial High School to supporters for $4.3 million, saying the court still needs stronger evidence before deciding whether the deal properly serves creditors in the diocese’s Chapter 11 case.

Judge Heather Cooper said in Burlington that preserving a nonprofit school mission may matter, but it does not erase the diocese’s obligation to seek the highest possible return for assets in bankruptcy. She said the disagreement over fair market value remains unresolved and will require more examination at a future evidentiary hearing that has not yet been scheduled.

The school property is being sought by RMHS Inc., a new nonprofit organization whose principal officers are the nine members of the Rice School Board, according to state incorporation records filed recently. Church lawyers argued the private sale should be approved because the $4.3 million figure reflects market value and avoids the expense of brokers or agents.

That position was challenged by attorneys for a creditors’ committee representing more than 100 clergy abuse claimants. They want the 42-classroom campus and its 27 acres exposed to a public bidding process, arguing that broader competition could produce a higher price and more money for settlement of claims.

The dispute comes as the diocese continues its bankruptcy reorganization that began in the fall of 2024. Church officials have said a long list of nearly 70 prior settlements tied to priest misconduct helped cut the value of the diocese’s bank and property holdings roughly in half, leaving about $35 million, while more than 100 additional abuse claims reaching back to 1950 remain pending.

Rice Memorial High, which reopened this week to about 400 students, was first founded in 1917 as Cathedral High School in downtown Burlington before moving to South Burlington in 1959 and adopting its current name, according to the school’s history.

Earlier this year, the diocese obtained permission to sell some other assets as part of the case, including its South Burlington headquarters for $3.13 million and the former Loretto Home senior living facility in Rutland for $1 million. It has not announced plans for its other Catholic high schools, Mount St. Joseph Academy in Rutland and St. Michael School in Brattleboro, or its 10 elementary and middle schools.

Supporters of the Rice sale commissioned White + Burke Real Estate Advisors of Burlington to estimate the campus’s value. The firm placed it at between $4 million and $6 million, but said the estimate was based on a drive by inspection and that the interior was not toured. In its filing, the company said the figure was not a formal appraisal, only a broker’s view of likely market value.

That estimate is now being scrutinized because it sharply differs from a 2025 appraisal commissioned by the church from Champlain Valley Appraisal Services of Waterbury, which placed the property at $30.5 million. Champlain Valley said its valuation was based on a complete interior and exterior inspection, a full review of market conditions and an analysis of the property’s highest and best use.

The court fight over Rice is unfolding alongside mediation between the diocese and clergy abuse claimants over access to an estimated $500 million in parish property and other possessions placed in trusts in 2006. Under federal bankruptcy law, both creditors and the court must sign off on any reorganization plan.