The legal team representing the St. Clare's Hospital pensioners has filed a motion requesting the case be sent back to state court.
In March, the Diocese of Albany announced it was filing for bankruptcy. Bishop Ed Scharfenberger insisted that the diocese didn't see any other alternative, after settling 50 of over 400 cases brought under the Child Victims Act.
The filing put a hold on the lawsuits involving 1,100 St. Clare’s pensioners who worked at the former hospital in Schenectady. They lost some or all of their retirement savings when, in March 2019, the St. Clare's Corporation petitioned the state Supreme Court to dissolve, claiming it had run out of money.
Six months later, a group of advocates, including the Legal Aid Society of Northeastern New York and the AARP, filed a lawsuit against the Diocese seeking damages for the pensioners.
In late 2022 a judge ruled the pensioner's should merge with one filed in May by the Attorney General’s office.
Meryl Grenadier is a Senior Attorney at AARP Foundation.
"Our clients are what is considered, what is called ‘unsecured creditors’ in the bankruptcy proceeding," said Grenadier. "And in order to obtain any money out of the bankruptcy process, the diocese essentially has to agree that they owe our clients money. And at this point, the only way that we think that can happen is if a court determines that they are responsible. And so if the bankruptcy judge grants the motion and sends us back to the state court, we will pick up right where we left off."
Grenadier says that's the "quickest and best way to get justice for the pensioners," adding the lawsuit will continue to be consolidated. She's optimistic the case will go back to the state.
"In the state court, we were about 10 days away from filing our dispositive motions, our statement of why we win the case," Grenadier said. "And we wouldn't expect to need much longer than that to get right back to where we were. So, you know, those briefs can be filed in short order and determined by the state court, maybe by the end of the summer. And we hope to have a trial, you know, by the end of the calendar year."
St. Clare’s Hospital Recovery Alliance Chair Mary Hartshorne says the bankruptcy was a gut punch.
"We never expected it because we were so close to a trial. So it was a surprise and a shock," Hartshrone said. "But our attorneys have rallied, and they have an appeal ready, so that we can keep this with Judge Versaci, who is very familiar with our trial. Honestly, it seems like a setback but quite frankly, it isn't."
The Diocese emailed WAMC a statement in response to a request for comment: "We are aware of the application filed by the Official Committee of Unsecured Creditors, dated May 9, 2023, requesting the Bankruptcy Court to vacate the automatic stay triggered by the filing of the voluntary petition by the Diocese of Albany, necessitated by the volume of unsettled CVA actions, and allow the consolidated state court actions by the St. Clare’s Hospital pensioners to proceed. The application will be heard by the Bankruptcy Court on June 14, 2023. It is currently under review and the diocese response will be provided to the court and parties as required in the application by June 7,2023."
