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Albany Catholic Diocese files for bankruptcy

 "Today, the Roman Catholic Diocese of Albany has filed a Chapter 11 reorganization petition in the Northern Bankruptcy Court. This decision has not come in any quick or precipitous way, it's been a long haul." ~ Bishop Ed Scharfenberger
Dave Lucas
/
WAMC
"Today, the Roman Catholic Diocese of Albany has filed a Chapter 11 reorganization petition in the Northern Bankruptcy Court. This decision has not come in any quick or precipitous way, it's been a long haul." ~ Bishop Ed Scharfenberger

The Diocese of Albany is filing for Chapter 11 bankruptcy as it faces a number of legal challenges.

"Today, the Roman Catholic Diocese of Albany has filed a Chapter 11 reorganization petition in the Northern Bankruptcy Court. This decision has not come in any quick or precipitous way, it's been a long haul," said Bishop Ed Scharfenberger, meeting with reporters Wednesday afternoon at the Pastoral Center in Albany, noting that the diocese, struggling to settle over 400 Child Victims Act cases, "doesn't see any other alternative" after settling 50.

"We've reached the limit of our resources in order to be able to do that, and yet to continue our own obligations to those who we must serve," Scharfenberger said.

The Diocese says what led the filing was its obligation to maintain its self-insurance program as part of its insurance plan that was threatened by the continued settlement of individual cases along with the timing of the Diocese payroll cycle.

The attorneys representing sexual abuse survivors released a statement that says in part, “We urge everyone to see the Diocese’s strategy for what it is: chicanery designed to perpetuate a $600 million corporation’s pattern of decadence, deception, and denial.”

Stephen Mittler, who received an abuse settlement, says the bankruptcy comes as no surprise.

"That's something that they used as part of their tactic during my settlement conference back in July, which is why I took my settlement which was $750,000," Mittler said. "Taking that at the time, not knowing if they were sincere about being able to maintain not declaring bankruptcy or declaring bankruptcy. I think we all saw this coming for a period of time and I'm surprised that it hadn't happened sooner.”

The Diocese says the bankruptcy filing will also put a hold on the lawsuits involving St. Clare’s pensioners. More than 1,100 people who worked at the former hospital in Schenectady lost some or all of their retirement savings when the St. Clare's pension fund dried up in 2019 following a move to drop the fund's federal pension insurance protection in the 1990s. In 2019 a group of advocates filed a lawsuit against the Diocese seeking damages for the pensioners.

Scharfenberger says the St. Clare’s matter was not the reason for the bankruptcy filing.

"It does not change my desire to reach out to every one of those pensioners," said Scharfenberger. "And not only that they come forward, but actually to hear their stories. And I say this repeatedly, I want to hear anyone that wants to come and tell their story, I am here to listen. And we have other people that assist us in this, our assistance coordinator, is also very, very much available. And the diocese itself has a process that is not the beyond just the litigation, where anybody that wishes to come forward with a claim can do that, even a claim at Canon Law. So we're here for the long range, we have a, I won't call it a program, but a process of hope and healing, to assist all of those who are survivors. And this is ongoing, and will continue regardless of where the litigation and the bankruptcy proceedings ultimately go, we are going to be here."

Republican state Senator Jim Tedisco has been a vocal supporter of the St. Clare's pensioners and recently brokered a meeting with Governor Kathy Hochul’s office.

"What the Diocese announced today is absolutely shameful,"Tedisco said. "At this point, they're pouring salt in an already gaping wound. They can run from their despicable actions and financial maneuverings, but they can’t hide from the Lord or the court of public opinion about what they did to all their victims including the 1,100-plus St. Clare’s Hospital Pensioners who were robbed of their retirement savings. Those of us who have stood up for and fought for justice alongside these outstanding health care providers are not going away and I know neither are they. We will continue to pursue the justice they deserve in every possible way!"

Asked about the impact on local schools and churches, Scharfenberger says they have their own corporate identities.

“We're going to be asking for assistance from churches, and financial assistance in paying into ultimately what the lawyers like to call the pot, you know, what would be distributed, but their own operations would not be affected by this," said Scharfenberger.

There are more than 300,000 Catholics in the Albany Diocese.

In a video message Wednesday, Bishop Scharfenberger said the Chapter 11 filing was a very difficult decision.

Dave Lucas is WAMC’s Capital Region Bureau Chief. Born and raised in Albany, he’s been involved in nearly every aspect of local radio since 1981. Before joining WAMC, Dave was a reporter and anchor at WGY in Schenectady. Prior to that he hosted talk shows on WYJB and WROW, including the 1999 series of overnight radio broadcasts tracking the JonBenet Ramsey murder case with a cast of callers and characters from all over the world via the internet. In 2012, Dave received a Communicator Award of Distinction for his WAMC news story "Fail: The NYS Flood Panel," which explores whether the damage from Hurricane Irene and Tropical Storm Lee could have been prevented or at least curbed. Dave began his radio career as a “morning personality” at WABY in Albany.