Roman Catholic Diocese of Albany files for bankruptcy (with video)

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ALBANY — The Roman Catholic Diocese of Albany filed for Chapter 11 bankruptcy Wednesday, putting on hold settlements of Child Victims Act claims and a lawsuit filed by St. Clare’s pensioners. 

The move to reorganize, announced by Bishop Edward B. Scharfenberger during a press conference in Albany, also stops any other legal actions against the diocese as it looks at what assets it has available, according to a release from the organization. 

“This decision has not come in any quick or precipitous way,” Scharfenberger said at the media event attended by a dozen Capital Region reporters following the announcement. 

The bankruptcy filing only impacts the diocese, as parishes and Catholic schools are incorporated separately, according to a press release. 

The announcement comes as the diocese was in the middle of settling the over 400 sexual abuse claims filed over the last few years following the enactment of the Child Victims Act in 2019, which suspended the statute of limitations for two years for victims of child sex abuse to file claims against their abusers or entities that may have hid the abuse.

@dgazette Amid Child Victims Act lawsuits, Albany Diocese files for Chapter 11 reorganization bankruptcy – 3/15/23  – Daily Gazette

Scharfenberger said that over the last year, the diocese has tried to “encourage universal mediation” of the claims. 

“Unfortunately, we encountered resistance from many members, many of the plaintiffs’ counsel, but nonetheless we attempted to settle many of the cases that we could with the resources that we had,” he said.

He said they settled upwards of 50 cases before the bankruptcy filing.  

But now, he said, the diocese is hitting a financial wall to continue the settlements as well as its own obligations, even noting there were concerns about meeting weekly payroll. 

The diocese then sent an email at 3:18 p.m Wednesday clarifying the bishop’s statement regarding payroll.

“When asked what prompted the filing at this time, Bishop Ed said had the diocese not filed for reorganization today it may not have been able to meet its next payroll,” said Kathryn Barrans, the director of communications. “What led to today’s filing was the diocese’s obligation to maintain its self-insurance program as part of its insurance plan that was threatened by the continued settlement of individual cases rather than a more comprehensive approach to address the claims of all victim/survivors and was the timing of the payroll cycle.” 

Scharfenberger said in the release that the diocese will continue work with victims to help them heal.

“I hope that financial outcomes through reorganization bring some degree of peace and a sense that some aspect of justice has been accomplished,” he said. “I am not satisfied that by giving out money we will have done all that we can. I continue to open my heart to all who will allow me to walk with them on the road to healing. You do not have to walk alone.”

Clergy sex-abuse survivor Stephen Mittler of Saratoga Springs said he’s not surprised by the diocese’s actions. 

“I’m frankly surprised that it took them this long to declare bankruptcy,” he told a Gazette reporter.

Mittler filed a lawsuit against the diocese under the state’s Child Victims Act alleging abuse by Mark Haight, who first came to Corpus Christi Church in Saratoga County in 1988. Ordained in 1976, Haight was moved by the church from job to job and was twice placed in treatment before ultimately being removed from his final position at Glens Falls Hospital in 1997, according to Mittler’s lawsuit.

While Haight, whom the church also terminated from the priesthood in 1997, denied allegations of abuse or pleaded the fifth during a court deposition in 2021, the Roman Catholic Diocese of Albany agreed in June to pay Mittler $750,000 to settle a New York State Child Victims Act lawsuit. As part of the deal, Haight agreed to pay $2,000 to Mittler. The settlement was one of the first major Child Victims Act settlements by the Diocese of Albany. 

Mittler said he knew of only five or six other settlements following his. 

“They just don’t have the resources to do another settlement before the next trial,” he said. “It leaves me with some anger towards the process. These other 400 victims probably will not see a penny for years.”

However, law firms representing numerous victims said the diocese has the money.

LaFave, Wein & Frament and Jeff Anderson & Associates said the diocese has over $600 million in assets, noting over $44 million reported by the diocese in 2021 and over $84 million reported by the Foundation of the Roman Catholic Diocese of Albany in 2021, according to a press release sent by the law firm. The firm also said that in December 2022, the 126 parishes and missions of the diocese owned 489 parcels of land valued at over $403 million in total and other Catholic entities such as Catholic Charities and Catholic schools had 29 parcels of land valued at over $118 million as of December 2022. 

LaFave, Wein & Frament and Jeff Anderson & Associates are representing 190 of the 440 people who have filed lawsuits against the diocese. The attorneys representing those victims said the Albany Diocese’s bankruptcy filing, like that of the Dioceses of Buffalo, Rochester, Rockville Center and Syracuse, is an attempt to skirt the civil litigation process and avoid accountability. 

“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,” said attorney Jeff Anderson in the release. 

Attorney Cynthia LaFave said they’re ready to take this to bankruptcy court. 

“This is a time for reckoning,” LaFave said. “They have the ability to pay. Jeff Anderson & Associates has been involved in this type of case in over 20 different places in the United States. We have done a robust assessment of what they’re assets are, we’re ready, we’re ready to go.”

ST. CLARE’S IMPACT

The reorganization filing will also put a hold on the lawsuit filed by more than 1,100 former employees of the now-defunct St. Clare’s Hospital, who argue they were not paid the pension they were promised. 

The employees, with 10 to 50 years of service, were technicians, cafeteria workers, nurses, doctors and many others, who either lost pensions all together or saw their benefits reduced. 

Mary Hartshorne, who has been leading the fight to get the pensions, said it is suspicious that the diocese has now decided to reorganize just as pensioners’ were preparing for a trial.

“I’m extremely disappointed in the church. They’ve had plenty of time to do this if they were going to,” Hartshorne said. “We’ve reached a point where we’re almost ready for a trial and they know that. I feel like this is just another hit in the back of the head for the St. Clare’s pensioners.”

It will be five years in October since pensioners were served with papers saying they wouldn’t receive their pensions. 

“Five years and now the diocese decides to do this,” she said. “It’s just one more kick when we’re down.” 

State Sen. Jim Tedisco, R-Glenville, who has been working to try and get the pensions back, called the diocese’s actions shameful in a statement following the bankruptcy announcement. 

“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 1100-plus St. Clare’s Hospital Pensioners who were robbed of their retirement savings,” he said. “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!”

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