Diocese will not oppose St. Clare’s motion to lift stay in case

The Diocese of Albany, in a statement released June 1, said it will not oppose the St. Clare’s pensioners’ motion to lift the stay to allow their case against the Diocese to proceed.

The Diocese “acknowledges that it is appropriate for the issues in the case to be decided by the New York State Supreme Court, Schenectady County, and that the bankruptcy court should enter an order allowing the matter to go forward in state court,” the statement read. “Because of the substantial effect a decision will have on its Chapter 11 Reorganization Plan, the Diocese has requested that the bankruptcy court require that regular status reports of the progress of the case be provided so that the bankruptcy court and the creditors in the bankruptcy case are apprised of developments that may affect the Chapter 11 proceeding. We are eager to see this matter resolved for the pensioners and for the Diocese.”

The St. Clare’s Hospital pensioners filed a motion last month requesting the stay in their case against the Diocese of Albany be lifted and their case sent back to state court. When the Diocese filed for Chapter 11 bankruptcy protection on March 15, all legal actions — including lawsuits involving the St. Clare’s pensioners — against the Diocese stopped.

In March 2019, the St. Clare’s Corporation dissolved, causing some of the nearly 1,100 St. Clare’s Hospital employees to lose some or all of their retirement benefits. On May 24, 2022, New York attorney general Letitia James filed a lawsuit against the Diocese on behalf of the employees who allege they lost their retirement benefits because of actions by the Diocese. The suit alleges that the “the St. Clare’s Corporation … unanimously voted to terminate the pension and dissolve the Corporation. In the petition for dissolution, filed with the court in 2019, the Corporation admitted that it owed more than $50 million to the retirement plan and its members and had no means or intention to fully fund the pension.”

The attorney general’s lawsuit includes a lawsuit filed in 2019 by the Legal Aid Society of Northeastern New York, the AARP and other advocates on behalf of the pensioners.

In the statement, the Diocese also responded to Mary Hartshorne’s open letter to Pope Francis in early April, regarding the St. Clare’s pensioners. In it, Hartshorne, the leader of the St. Clare’s pensioners who lost their retirement savings, said, “We cannot pay our rent or mortgages, our medical bills, our gas or groceries. In some cases, we cannot bury our own dead.”

The Diocese said anyone “facing such hardships” should reach out.

“This deeply concerns Bishop Edward B. Scharfenberger. We encourage anyone who may be facing such hardships to reach out, even if they are in litigation, provided that counsel would be willing,” the statement said. “There are many wonderful and caring agencies throughout the Capital Region, including within our Diocese, and we would be happy to help make connections. No one should walk alone.”