St. Clare's pensioners gain hope in ongoing legal struggle; Hospital entity dissolution blocked, for now

PHOTOGRAPHER: Marc Schultz

St. Clare's pensioner Mary Hartshorne speaks on the topic of St. Clare's at Sen. James Tedisco office in December

SCHENECTADY — Former St. Clare’s Hospital employees who lost part or all of their pensions have secured what may be their first tangible victory in the fight to recover what was promised to them.

State Sen. James Tedisco, R-Glenville, said the state Attorney General’s Office won a court ruling that blocks for now the Pension Fund Board of Directors’ attempt to dissolve the fund and grants the pensioners status as a party to future court action on dissolution.

In late 2018, the 1,100 pensioners learned the pension fund of the defunct Schenectady hospital had reached the crisis point and was running out of money. Some would see their monthly checks reduced others would see them halted altogether.

The St. Clare’s Corporation, the hospital’s successor entity, sought to dissolve last year after wrapping up termination of the pension fund.

The pensioners had sought to block this in Schenectady County Court because dissolution would complicate efforts to find out why the pension crisis arose and complicate efforts to distribute money to pensioners, should some sort of bailout ever be secured.

Tedisco said the Attorney General’s Office told him Friday evening that it had won a ruling blocking dissolution, granting it access to more than 100 pieces of evidence, and giving it the right to depose the pension fund’s board president and attorney.

Former St. Clare’s Hospital sonographer Mary Hartshorne, a leader of the pensioners’ effort to gain an accounting and some of their money back, said Friday she was thrilled by the ruling.

“For us this means that someone is listening to us, someone hears us, and I’m very excited about that,” she said. “I thought the possibility was that [the judge] would let the corporation dissolve.”

Tedisco, who has been advocating for the pensioners since the crisis began, said: “I want to thank the attorney general for her and her office’s efforts on this case. This is the first step in getting to the bottom of what happened to the pension fund the retirees worked so hard for so we can help find a way to make them whole.”

The office of Attorney General Letitia James is involved in the matter in its role as watchdog over the state’s nonprofits. In previous court filings, it has complained of a lack of cooperation from St. Clare’s Corp. attorneys.

After years of financial struggles, during which it badly shorted its pension fund, St. Clare’s Hospital was absorbed under state order into what is now Ellis Medicine in 2008. As part of the deal, the state provided a $28 million pension bailout. This turned out to be woefully short of what was needed, and in late 2019, Tedisco obtained circa-2007 documents indicating the state knew $47 million was needed for a bailout.

The pensioners are suing the corporation, which has no money, as well as the Roman Catholic Diocese of Albany, which was closely associated with the hospital during and after its existence but maintains it has no responsibility for causing or fixing the crisis, nor funds to make the pensioners whole.

Tedisco, meanwhile, feels the state bears responsibility for ordering St. Clare’s to close and not giving it the funds to do so properly. The state has rejected this criticism and is likely entering a multiyear, multibillion-dollar fiscal crisis of its own.

So there is no immediate source of relief, even if the pensioners prevail in court.

Nonetheless, Hartshorne said: “It’s a light at the end of the tunnel. I do we feel have a light. It’s a small one, but it’s better than a dark tunnel.”