Bishop Edward Scarfenberger. / Credit: Photo courtesy of the Diocese of Albany
National Catholic Register, Dec 19, 2025 / 12:24 pm (CNA).
A retired New York bishop has filed for personal bankruptcy protection in federal court after a state jury verdict found him, along with other officials, personally liable for the collapse of a Catholic hospital pension fund that left about 1,100 retirees without the lifetime monthly payments they were expecting.
It’s not clear whether a Catholic bishop in the United States has ever previously filed for personal bankruptcy protection.
Bishop Edward Scharfenberger, 77, who served as bishop of Albany from April 2014 until his retirement in October, is seeking protection from creditors for his assets valued at between $100,001 and $500,000, according to a filing Tuesday in the U.S. Bankruptcy Court for the Northern District of New York.
The seven-page filing does not list the bishop’s assets but states that he has between 100 and 199 creditors and debts totaling between $1,000,001 and $10 million.
Last week, a jury found Scharfenberger 10% liable in a $54.2 million judgment in a civil lawsuit over the failed pension plan once provided by St. Clare’s Hospital in Schenectady, a Catholic hospital that operated from 1949 until 2008, according to The Evangelist, the diocese’s newspaper.
The verdict and judgment, issued Dec. 12, cover compensatory damages — the amount a court finds is owed to plaintiffs for harm they have suffered — but not punitive damages, which may be added in cases of recklessness, malice, or fraud. The bankruptcy filings by the bishop and another defendant in the state lawsuit over the pension plan failure forced a pause in a punitive damages hearing earlier this week, according to WNYT Channel 13 in Albany.
The National Catholic Register, CNA’s sister news partner, was unable to reach Scharfenberger before the publication of this story. A lawyer representing the bishop acknowledged a request for comment Dec. 17 but did not immediately provide one.
A rare personal bankruptcy
In recent decades, bankruptcies have occurred regularly in the Catholic Church in the United States. Between 2004 and November 2025, 39 of the country’s dioceses have filed for bankruptcy, almost all to protect assets from clergy sex-abuse lawsuits, as the Register reported last month. One of those is the Diocese of Albany, which filed for bankruptcy in March 2023.
But those diocesan cases were filed under Chapter 11 of the U.S. Bankruptcy Code, which allows a corporation, partnership, or sole proprietorship to reorganize and continue operating while developing a court-approved plan to repay creditors.
Scharfenberger filed under Chapter 13, which allows an individual with regular income who cannot pay debts to keep certain assets while working out a repayment plan.
“The rules in Chapter 13 permit a debtor to keep property and confirm a plan with payments to creditors based on the debtor’s ‘disposable income,’” said Marie Reilly, a bankruptcy expert and law professor at Penn State Dickinson Law, in an email. “If the debtor commits his disposable income to paying creditors for the term of a three- to five-year plan, he gets a discharge (forgiveness) of the unpaid balance.”
Reilly, who has researched several dozen diocesan bankruptcies for The Catholic Project, a lay initiative of The Catholic University of America in Washington, D.C., told the Register that the bankruptcy filing does not necessarily solve all of the bishop’s money problems.
“There are exceptions — some debts don’t get discharged. Creditors can object to the plan if it does not meet the statutory requirements,” Reilly said. “And, it is possible that the pension fund creditor may move to dismiss the bishop’s Chapter 13 case as having been filed ‘in bad faith.’”
$50 million shortfall
St. Clare’s Hospital was originally run by the Franciscan Sisters of the Poor. The Diocese of Albany maintains that it never owned the hospital and that the bishop of Albany merely provided “canonical oversight” to make sure the hospital met “its mission to serve all in accord with Catholic moral standards,” according to an August 2025 statement from the diocese.
Last week, the jury found that the Diocese of Albany has no liability for the pension failure, instead holding the hospital corporation and certain officers and board members accountable.
In addition to Scharfenberger, the jury found two deceased employees of the diocese liable, according to The Evangelist: Former Albany Bishop Howard Hubbard (1938–2023), who led the diocese from 1977 to 2014, was found 20% liable; and Father David LeFort, a former vicar general of the diocese who died in August 2023, was found 5% liable.
Also found liable were St. Clare’s Corporation (20%), St. Clare’s president Joseph Pofit (25%), and former St. Clare’s president Robert Perry (20%), according to The Evangelist.
The judgments stem from a pension plan that operated for about 60 years.
In 1959, the hospital began offering employees a defined-benefit plan that provided a lifetime monthly pension after retirement.
Church plan exempt from ERISA
Like most plans operated by Catholic institutions, the pension plan had a religious exemption from the federal Employee Retirement Income Security Act of 1974 (known as ERISA), which sets minimum funding requirements for most nonreligious pension plans and also enables the federal government to step in and make payments to retirees of failed plans, using a fund financed by covered pension plans.
When the hospital closed in 2008, the officers of St. Clare’s “determined that the corporation would continue to exist for purposes of administering the pension plan,” according to a complaint filed in state court in Schenectady County by the New York attorney general’s office in May 2022.
“They also chose to continue treating the pension plan as a ‘Church plan’ — which it could do only if the corporation’s former employees and pensioners were designated as employees of the Church. This was all in order to avoid the contribution and insurance requirements of ERISA, and the duties imposed by ERISA upon corporation directors and trustees as fiduciaries,” the complaint states.
The bishop of Albany was automatically a member of the hospital’s board and served as its honorary chairman, and had authority to appoint most of the directors on the board, according to the state attorney general’s complaint.
The attorney general’s office alleged that St. Clare’s Corporation failed to make contributions to the pension fund “for all but three years from 2001 to 2019” and concealed from retirees “the insolvency of the pension plan.”
In 2018, the St. Clare’s board terminated the pension plan effective Feb. 1, 2019, because of an approximately $50 million shortfall. More than 1,100 employees lost retirement benefits, including about 650 who lost all pension payments and about 450 who received a lump-sum payment “equal to 70% of the value of their vested pension,” the complaint states. The retired employees include “nurses, lab technicians, social workers, EMTs, orderlies, housekeepers, and other essential workers” who worked at the hospital “between 10 and 50 years,” the complaint states.
Testimony and reaction
On Dec. 9 during the civil trial, Scharfenberger testified that during his tenure no boards he sat on ever discussed the hospital’s pension plan, according to The Times-Union of Albany.
In a written statement issued in August, when Scharfenberger still led the Diocese of Albany, the diocese said the bishop “has actively sought ways to help the pensioners” while denying that the diocese ever “exercised any control over St. Clare’s Hospital operations or its pension.”
“He hosted a listening session with pensioners at Siena College to identify issues and consider ways to help those in need. He also reached out to the Mother Cabrini Foundation to try to secure funding for the pensioners, but that effort was unable to move forward once the pensioners filed the lawsuit,” the statement said.
“The diocese is eager to see the case move forward and promptly resolved,” the August statement continued. “Our prayers continue for all who are struggling in any way, and as we stated previously, our offer to connect those in need with services that can help, stands. No one should walk alone.”
His successor, Bishop Mark O’Connell, who was installed as bishop of Albany on Dec. 5, told reporters shortly before the verdict was announced last week: “I care deeply about their hurt [and] not having their pensions,” according to The Evangelist.
During the Dec. 12 press conference, when a reporter asked O’Connell what the diocese would do if the jury found the diocese liable for the pension fund collapse, the bishop noted that the diocese is already in the midst of a bankruptcy process.
“If we are liable, then we’ll do what we can to make amends, given that they are one creditor as a group among many people accusing the Diocese of Albany,” O’Connell said, according to WAMC Northeast Public Radio. “And that’s what bankruptcy process is. We obviously cannot pay a billion dollars. Right? So that’s what Chapter 11 is all about, to figure out what’s fair. And since you have a bankruptcy judge and mediators, it’s not up to us.”
Later that day, the jury found the diocese not liable in the pension fund collapse lawsuit. The diocese issued a written statement, according to The Evangelist, that said: “As grateful as we are for the jury’s informed decision, we are still very much aware of the hurt felt by the St. Clare’s pensioners who cared for the sick and the poor throughout the long history of St. Clare’s Hospital. This does not mean that we will turn our backs to the pensioners, for as Bishop O’Connell has noted, they are a part of our flock; they are still in need of healing.”
That same day, lead plaintiff Mary Hartshorne, who worked in the hospital’s radiology department for about 28 years, told WNYT Channel 13 in Albany that she and other hospital retirees were pleased with the jury’s verdict but did not feel they would be made whole.
“We’ve been playing this game for seven and a half years, and I think my question I ask everybody is: How do you get that back? You don’t,” she said.
This story was first published by the National Catholic Register, CNA’s sister news partner, and has been adapted by CNA.
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![Should Catholics use AI to re-create deceased loved ones? Experts weigh in #Catholic
A child holds a phone with the Replika app open and an image of an AI companion. Apps that promise to help recreate digital versions of deceased family members using AI pose a “spiritual danger” to Catholics and others who may use the technology in place of healthy grief, experts say. / Credit: Generated by an Artificial Intelligence (AI) system on Shutterstock
CNA Staff, Dec 27, 2025 / 07:00 am (CNA).
Apps that promise to help re-create digital versions of deceased family members using AI pose a “spiritual danger” to Catholics and others who may use the technology in place of healthy grief, experts say.The AI company 2wai ignited a controversy on social media in November after it revealed its eponymous app, which will allow users to fabricate digital versions of their loved ones using video and audio footage.App co-founder Calum Worthy said in a viral X post that the tech could permit “loved ones we’ve lost [to] be part of our future.” The accompanying video shows a family continuously interacting with the digital projection of a deceased mother and grandmother even years after she died.What if the loved ones we've lost could be part of our future? pic.twitter.com/oFBGekVo1R— Calum Worthy (@CalumWorthy) November 11, 2025 The reveal of the app brought praise from some tech commentators, though there was also considerable negative reaction. Many critics denounced it as “vile,” “demonic,” and “terrifying,” with others predicting that the app would be used to ghoulish ends such as using dead relatives to promote internet advertisements. Tech ‘could disrupt the grieving process’2wai did not respond to requests for comment on the controversy, though company CEO Mason Geyser told the Independent that the ad was deliberately meant to be “controversial” in order to “spark this kind of online debate.” Geyser himself said he views the app as a tool to be used with his children to help preserve the memories of earlier generations rather than as a means to having a relationship with an AI avatar. “I see it … as a way to just kind of pass on some of those really good memories that I had with my grandparents,” he said. Whether or not such an app is compatible with the Catholic understanding of death — and of more diffuse, esoteric topics like grief — is unclear. Father Michael Baggot, LC, an associate professor of bioethics at the Pontifical Athenaeum Regina Apostolorum, acknowledged that AI avatars “could potentially remind us of certain aspects of our loved ones and help us learn from their examples.”But such digital replicas “cannot capture the full richness of the embodied human being,” he said, and they risk “distorting the dead’s legacy” by fabricating conversations and interactions beyond the dead’s control. Catholic leaders have regularly remarked on both the heavy burden of grief and its redemptive power. Pope Francis in 2020 acknowledged that grief is ”a bitter path,” but it can “serve to open our eyes to life and the sacred and irreplaceable value of each person,” while helping one realize “how short time is.”In October, meanwhile, Pope Leo XIV told a grieving father that those mourning the death of a loved one must “remain connected to the Lord, going through the greatest pain with the help of his grace.” The Resurrection, he said, “knows no discouragement or pain that imprisons us in the extreme difficulty of not finding meaning in our existence.”Brett Robinson, the associate director of the McGrath Institute for Church Life at the University of Notre Dame, warned that there is “spiritual danger” in technology that outwardly appears to bring loved ones back from the dead. Technology is not a neutral product, he said, but one that “has a profound ability to shape our perception of reality, regardless of the content being displayed.”“In the case of re-presenting dead loved ones we meet one such case where prior conceptions about identity, vitality, and presence are being reshaped along technological lines,” he said. “If someone who no longer exists in human form, body and soul, can be ‘resurrected’ from an archive of the digital traces of their life, who or what are we actually engaging with?” he said. Robinson argued that present modes of technology have echoes of earlier centuries “when the cosmos was filled with presence — the presence of God, of angels, of demons, and of magic.” The problem at hand, he said, is that the “new magic” of modern technology “is divorced from the hierarchical, ordered cosmos of creation and the spiritual realm.”Donna MacLeod has worked in grief ministry for decades. She first became involved in Catholic grief counseling after the death of her youngest daughter in 1988. The funeral ministry evolved into Seasons of Hope, a grief support program for Catholics that “focuses on the spiritual side of grieving the death of a loved one.”MacLeod said the program is one of “hospitality and spirituality” that arises in an intensive community of individuals suffering from grief. “It builds parish communities,” she said. “People discover they’re not alone. That’s a big deal to grieving people — a lot of people feel very alone in their loss.” “And society expects everybody to move on,” she continued. “But grief has its own timetable. Those who are grieving start to understand that the Lord is with them and that he really cares about them. There’s hope and healing at the end of it.” “It’s doing what Christ asks us to do — walking with each other in hard times,” she said. Regarding the AI avatar technology, MacLeod acknowledged that those who have lost a loved one make it a “very high priority” to “seek connection” with the deceased. “People will say, ‘I’m not taking my loved one’s voice off of my answering machine,’” she said. “Or we have people taking out videos of family gatherings so they can see their loved ones again.”“Everyone seeks to still be connected with their loved ones,” she said. “It’s related to our Catholic faith and the communion of saints — people feel this spiritual connection with their loved ones.”MacLeod described herself as “on the fence” about how people could be affected by AI avatar apps. There could be “emotional and psychological risks interacting with AI versions of loved ones,” she admitted, though she said that many users “might look at it, but not get hung up on it,” unless they have underlying mental health issues. But “where the difficulty arises is that some people get stuck in the denial stage,” she said. Those suffering from grief can get desperate in such circumstances, she said, and sometimes resort to means such as mediums or psychics, which MacLeod pointed out the Church explicitly forbids. Whether or not AI avatars fall under that forbidden category is unclear. The Catechism of the Catholic Church expressly outlaws any efforts at “conjuring up the dead.” The use of mediums or clairvoyants “all conceal[s] a desire for power over time, history, and, in the last analysis, other human beings,” the Church says. Baggot said apps like 2wai’s “assemble data about the deceased without preserving the person.” He further argued that AI avatars “could also disrupt the grieving process by sending ambiguous signals about the survival of the departed person.”Robinson, meanwhile, acknowledged that it is “good to want to connect to deceased loved ones,” which he pointed out we do “liturgically through prayer and memorials that honor those souls that are dear to us.” He warned, however, against “technocratic creators of complex computational machines that are becoming indistinguishable from magic.”Such technology, he said, alters “the spiritual order” in ways “that are disordered and disembodied from the ritual forms that sustain religion and our belief that our eternal destiny rests with God in heaven and not in a database.”](https://unitedyam.com/wp-content/uploads/2025/12/should-catholics-use-ai-to-re-create-deceased-loved-ones-experts-weigh-in-catholic-a-child-holds-a-phone-with-the-replika-app-open-and-an-image-of-an-ai-companion-apps-that-promise-to-help-recr.webp)
![CNA explains: How does ‘Mass dispensation’ work, and when is it used? #Catholic
null / Credit: FotoDax/Shutterstock
CNA Staff, Dec 26, 2025 / 06:00 am (CNA).
Amid heavy immigration enforcement by the Trump administration, several bishops in the U.S. have recently issued broad dispensations to Catholics in their dioceses, allowing them to refrain from attending Mass on Sundays if they fear arrest or deportation from federal officials.Bishops in North Carolina, California, and elsewhere have issued such dispensations, stating that those with legitimate concerns of being detained by immigration agents are free from the usual Sunday obligation.The Church’s canon law dictates that Sunday is considered the “primordial holy day of obligation,” one on which all Catholics are “obliged to participate in the Mass.” Several other holy days of obligation exist throughout the liturgical year, though Sunday (or the Saturday evening prior) is always considered obligatory for Mass attendance.The numerous dispensations issued recently in dioceses around the country have underscored, however, that bishops have some discretion in allowing Catholics to stay home from Mass for legitimate reasons.Dispensation must be ‘just,’ ‘reasonable’David Long, an assistant professor in the school of canon law at The Catholic University of America as well as the director of the school’s Institute for Policy Research and Catholic Studies, told CNA that bishops have the authority to dispense the faithful in their diocese with, as the Code of Canon Law puts it, a “just and reasonable cause.”“This generally applies when a holy day of obligation falls on a Saturday or Monday, during severe weather events (snowstorms, hurricanes, floods, etc.), when there is no reasonable access to Mass, or during public emergencies such as pandemics or plagues,” he said. Once such circumstances end, he noted, the dispensation itself would cease.By virtue of their office, diocesan administrators, vicars general, and episcopal vicars also have the power to issue dispensations, Long said.Priests, however, normally do not have that authority “unless expressly granted by a higher authority, such as their diocesan bishop,” he said.Canon law, he said, dictates that a dispensation can only be granted when a bishop “judges that it contributes to [the] spiritual good” of his flock, for a just cause, and “after taking into account the circumstances of the case and the gravity of the law from which dispensation is given.”The lay faithful themselves can determine, in some cases, when they can refrain from going to Mass, though Long stressed that such instances do not constitute “dispensation,” as the laity “does not have the power to dispense at any time” that authority being tied to “executive power in the Church” via ordination.Canon law dictates, however, that Catholics are not bound to attend Mass when “participation in the Eucharistic celebration becomes impossible.”Long said such scenarios include “when [the faithful] are sick, contagious, or housebound, when they are the primary caregiver for someone else and cannot arrange coverage for that person, when traveling to Mass is dangerous, when there is no realistic access to Mass, or for some other grave cause.”“This is not a dispensation,” he said, “but instead is a legal recognition of moral and physical impossibility at times.”The recent immigration-related controversy isn’t the only large-scale dispensation in recent memory. Virtually every Catholic in the world was dispensed from Mass in the earliest days of the COVID-19 crisis, when government authorities sharply limited public gatherings, including religious gatherings, all over the world.In 2024, on the other hand, the Vatican said that Catholics in the United States must still attend Mass on holy days of obligation even when they are transferred to Mondays or Saturdays, correcting a long-standing practice in the U.S. Church and ending a dispensation with which many Catholics were familiar.‘The most incredible privilege we could possibly imagine’Though the obligation to attend Mass is a major aspect of Church canon law, Father Daniel Brandenburg, LC, cautioned against interpreting it uncharitably.“This ‘obligation’ is sort of like the obligation of eating,” he said. “If you don’t eat, you’ll die. Similarly, the Church simply recognizes that if we don’t nourish our soul, it withers away and dies. The bare minimum to survive is Mass once a week on Sundays.”“Most people find the ‘obligation’ of eating to be quite pleasurable,” he continued, “and I think anyone with a modicum of spiritual awareness finds deep joy in attending Mass and receiving the Creator of the universe into their soul. At least I do.”Like Long, Brandenburg stressed that the lay faithful lack the authority to “dispense” themselves from Mass. Instead, they are directed to follow their consciences when determining if they are incapable of attending Mass, particularly by applying the principle of moral theology “ad impossibilia, nemo tenetur” “(no one is obliged to do what is impossible”).Being too sick, facing dangerous inclement weather, or lacking the ability to transport themselves are among the reasons the faithful might determine they are unable to attend Mass, he said.“Here, beware the lax conscience which gives easy excuses,” Brandenburg warned, “and remember that the saints became holy not through excuses, but through heroic love.”](https://unitedyam.com/wp-content/uploads/2025/12/cna-explains-how-does-mass-dispensation-work-and-when-is-it-used-catholic-null-credit-fotodax-shutterstockcna-staff-dec-26-2025-0600-am-cna-amid-heavy-immigratio.webp)
![Federal judge strikes down rules allowing schools to hide gender ‘transitions’ from parents #Catholic
null / Credit: sergign/Shutterstock
CNA Staff, Dec 23, 2025 / 10:07 am (CNA).
A federal judge in California this week issued a permanent block against the state’s “gender secrecy policies” that have allowed schools to hide children’s so-called “gender transitions” from their parents.U.S. District Court Judge Roger Benitez issued the ruling in the class action lawsuit on Dec. 22, holding that parents “have a right” to the “gender information” of their children, while teachers themselves also possess the right to provide parents with that information. The order strikes down secretive policies in school districts across California that allowed schools to conceal when a child began identifying as the opposite sex or another LGBT-related identity. Benitez had allowed the legal dispute to proceed as a class action lawsuit in October. School districts in California “are ultimately state agents under state control,” the judge said at the time, and the issue of settling “statewide policy” meant the class action structure would be “superior to numerous individual actions by individual parents and teachers.” The case, Benitez said on Dec. 22, concerns “a parent’s rights to information … against a public school’s policy of secrecy when it comes to a student’s gender identification.” Parents, he said, have a right to such information on grounds of the 14th and First Amendments, he said, while teachers can assert similar First Amendment rights in sharing that information with parents. Teachers have historically informed parents of “physical injuries or questions about a student’s health and well-being,” the judge pointed out, yet lawmakers in California have enacted policies “prohibiting public school teachers from informing parents” when their child claims to have an LGBT identity. “Even if [the government] could demonstrate that excluding parents was good policy on some level, such a policy cannot be implemented at the expense of parents’ constitutional rights,” Benitez wrote. The Thomas More Society, a religious liberty legal group, said in a press release that the decision “protects all California parents, students, and teachers” and “restores sanity and common sense.”School officials in California who work to conceal “gender identity” decisions from parents “should cease all enforcement or face severe legal consequences,” attorney Paul Jonna said in the release. Elizabeth Mirabelli and Lori Ann West, the Christian teachers who originally brought the suit, said they were “profoundly grateful” for the decision. “This victory is not just ours. It is a win for honesty, transparency, and the fundamental rights of teachers and parents,” they said. The Thomas More Society said on Dec. 22 that California officials had gone to “extreme lengths” to “evade responsibility” for their policies, up to and including claiming that the gender secrecy rules were no longer enforced even as they were allegedly continuing to require them. Gender- and LGBT-related school policies have come under fire over the past year from the White House. The U.S. Department of Health and Human Services in August directed U.S. states to remove gender ideology material from their curricula or else face the loss of federal funding. In February the Department of Education launched an investigation into several Virginia school districts to determine if they violated federal orders forbidding schools from supporting the so-called “transition” of children. In December, meanwhile, a Catholic school student in Virginia forced a school district to concede a lawsuit she brought alleging that her constitutional rights had been violated when the school subjected her to “extreme social pressure” to affirm transgender ideology.](https://unitedyam.com/wp-content/uploads/2025/12/federal-judge-strikes-down-rules-allowing-schools-to-hide-gender-transitions-from-parents-catholic-null-credit-sergign-shutterstockcna-staff-dec-23-2025-1007-am-cna.webp)
![Albany’s retired bishop files for personal bankruptcy #Catholic
Bishop Edward Scarfenberger. / Credit: Photo courtesy of the Diocese of Albany
National Catholic Register, Dec 19, 2025 / 12:24 pm (CNA).
A retired New York bishop has filed for personal bankruptcy protection in federal court after a state jury verdict found him, along with other officials, personally liable for the collapse of a Catholic hospital pension fund that left about 1,100 retirees without the lifetime monthly payments they were expecting.It’s not clear whether a Catholic bishop in the United States has ever previously filed for personal bankruptcy protection.Bishop Edward Scharfenberger, 77, who served as bishop of Albany from April 2014 until his retirement in October, is seeking protection from creditors for his assets valued at between $100,001 and $500,000, according to a filing Tuesday in the U.S. Bankruptcy Court for the Northern District of New York.The seven-page filing does not list the bishop’s assets but states that he has between 100 and 199 creditors and debts totaling between $1,000,001 and $10 million.Last week, a jury found Scharfenberger 10% liable in a $54.2 million judgment in a civil lawsuit over the failed pension plan once provided by St. Clare’s Hospital in Schenectady, a Catholic hospital that operated from 1949 until 2008, according to The Evangelist, the diocese’s newspaper.The verdict and judgment, issued Dec. 12, cover compensatory damages — the amount a court finds is owed to plaintiffs for harm they have suffered — but not punitive damages, which may be added in cases of recklessness, malice, or fraud. The bankruptcy filings by the bishop and another defendant in the state lawsuit over the pension plan failure forced a pause in a punitive damages hearing earlier this week, according to WNYT Channel 13 in Albany.The National Catholic Register, CNA’s sister news partner, was unable to reach Scharfenberger before the publication of this story. A lawyer representing the bishop acknowledged a request for comment Dec. 17 but did not immediately provide one.A rare personal bankruptcyIn recent decades, bankruptcies have occurred regularly in the Catholic Church in the United States. Between 2004 and November 2025, 39 of the country’s dioceses have filed for bankruptcy, almost all to protect assets from clergy sex-abuse lawsuits, as the Register reported last month. One of those is the Diocese of Albany, which filed for bankruptcy in March 2023. But those diocesan cases were filed under Chapter 11 of the U.S. Bankruptcy Code, which allows a corporation, partnership, or sole proprietorship to reorganize and continue operating while developing a court-approved plan to repay creditors.Scharfenberger filed under Chapter 13, which allows an individual with regular income who cannot pay debts to keep certain assets while working out a repayment plan. “The rules in Chapter 13 permit a debtor to keep property and confirm a plan with payments to creditors based on the debtor’s ‘disposable income,’” said Marie Reilly, a bankruptcy expert and law professor at Penn State Dickinson Law, in an email. “If the debtor commits his disposable income to paying creditors for the term of a three- to five-year plan, he gets a discharge (forgiveness) of the unpaid balance.”Reilly, who has researched several dozen diocesan bankruptcies for The Catholic Project, a lay initiative of The Catholic University of America in Washington, D.C., told the Register that the bankruptcy filing does not necessarily solve all of the bishop’s money problems.“There are exceptions — some debts don’t get discharged. Creditors can object to the plan if it does not meet the statutory requirements,” Reilly said. “And, it is possible that the pension fund creditor may move to dismiss the bishop’s Chapter 13 case as having been filed ‘in bad faith.’”$50 million shortfall St. Clare’s Hospital was originally run by the Franciscan Sisters of the Poor. The Diocese of Albany maintains that it never owned the hospital and that the bishop of Albany merely provided “canonical oversight” to make sure the hospital met “its mission to serve all in accord with Catholic moral standards,” according to an August 2025 statement from the diocese.Last week, the jury found that the Diocese of Albany has no liability for the pension failure, instead holding the hospital corporation and certain officers and board members accountable. In addition to Scharfenberger, the jury found two deceased employees of the diocese liable, according to The Evangelist: Former Albany Bishop Howard Hubbard (1938–2023), who led the diocese from 1977 to 2014, was found 20% liable; and Father David LeFort, a former vicar general of the diocese who died in August 2023, was found 5% liable. Also found liable were St. Clare’s Corporation (20%), St. Clare’s president Joseph Pofit (25%), and former St. Clare’s president Robert Perry (20%), according to The Evangelist.The judgments stem from a pension plan that operated for about 60 years. In 1959, the hospital began offering employees a defined-benefit plan that provided a lifetime monthly pension after retirement.Church plan exempt from ERISALike most plans operated by Catholic institutions, the pension plan had a religious exemption from the federal Employee Retirement Income Security Act of 1974 (known as ERISA), which sets minimum funding requirements for most nonreligious pension plans and also enables the federal government to step in and make payments to retirees of failed plans, using a fund financed by covered pension plans.When the hospital closed in 2008, the officers of St. Clare’s “determined that the corporation would continue to exist for purposes of administering the pension plan,” according to a complaint filed in state court in Schenectady County by the New York attorney general’s office in May 2022. “They also chose to continue treating the pension plan as a ‘Church plan’ — which it could do only if the corporation’s former employees and pensioners were designated as employees of the Church. This was all in order to avoid the contribution and insurance requirements of ERISA, and the duties imposed by ERISA upon corporation directors and trustees as fiduciaries,” the complaint states.The bishop of Albany was automatically a member of the hospital’s board and served as its honorary chairman, and had authority to appoint most of the directors on the board, according to the state attorney general’s complaint.The attorney general’s office alleged that St. Clare’s Corporation failed to make contributions to the pension fund “for all but three years from 2001 to 2019” and concealed from retirees “the insolvency of the pension plan.”In 2018, the St. Clare’s board terminated the pension plan effective Feb. 1, 2019, because of an approximately $50 million shortfall. More than 1,100 employees lost retirement benefits, including about 650 who lost all pension payments and about 450 who received a lump-sum payment “equal to 70% of the value of their vested pension,” the complaint states. The retired employees include “nurses, lab technicians, social workers, EMTs, orderlies, housekeepers, and other essential workers” who worked at the hospital “between 10 and 50 years,” the complaint states.Testimony and reactionOn Dec. 9 during the civil trial, Scharfenberger testified that during his tenure no boards he sat on ever discussed the hospital’s pension plan, according to The Times-Union of Albany. In a written statement issued in August, when Scharfenberger still led the Diocese of Albany, the diocese said the bishop “has actively sought ways to help the pensioners” while denying that the diocese ever “exercised any control over St. Clare’s Hospital operations or its pension.” “He hosted a listening session with pensioners at Siena College to identify issues and consider ways to help those in need. He also reached out to the Mother Cabrini Foundation to try to secure funding for the pensioners, but that effort was unable to move forward once the pensioners filed the lawsuit,” the statement said. “The diocese is eager to see the case move forward and promptly resolved,” the August statement continued. “Our prayers continue for all who are struggling in any way, and as we stated previously, our offer to connect those in need with services that can help, stands. No one should walk alone.”His successor, Bishop Mark O’Connell, who was installed as bishop of Albany on Dec. 5, told reporters shortly before the verdict was announced last week: “I care deeply about their hurt [and] not having their pensions,” according to The Evangelist.During the Dec. 12 press conference, when a reporter asked O’Connell what the diocese would do if the jury found the diocese liable for the pension fund collapse, the bishop noted that the diocese is already in the midst of a bankruptcy process.“If we are liable, then we’ll do what we can to make amends, given that they are one creditor as a group among many people accusing the Diocese of Albany,” O’Connell said, according to WAMC Northeast Public Radio. “And that’s what bankruptcy process is. We obviously cannot pay a billion dollars. Right? So that’s what Chapter 11 is all about, to figure out what’s fair. And since you have a bankruptcy judge and mediators, it’s not up to us.”Later that day, the jury found the diocese not liable in the pension fund collapse lawsuit. The diocese issued a written statement, according to The Evangelist, that said: “As grateful as we are for the jury’s informed decision, we are still very much aware of the hurt felt by the St. Clare’s pensioners who cared for the sick and the poor throughout the long history of St. Clare’s Hospital. This does not mean that we will turn our backs to the pensioners, for as Bishop O’Connell has noted, they are a part of our flock; they are still in need of healing.”That same day, lead plaintiff Mary Hartshorne, who worked in the hospital’s radiology department for about 28 years, told WNYT Channel 13 in Albany that she and other hospital retirees were pleased with the jury’s verdict but did not feel they would be made whole.“We’ve been playing this game for seven and a half years, and I think my question I ask everybody is: How do you get that back? You don’t,” she said.This story was first published by the National Catholic Register, CNA’s sister news partner, and has been adapted by CNA.](https://unitedyam.com/wp-content/uploads/2025/12/albanys-retired-bishop-files-for-personal-bankruptcy-catholic-bishop-edward-scarfenberger-credit-photo-courtesy-of-the-diocese-of-albanynational-catholic-register-dec-19-2025-1.webp)
![Catholic leaders back pregnancy centers, doctors in federal suit over abortion referrals #Catholic
Illinois state capitol in Springfield. / Credit: Paul Brady Photography/Shutterstock
CNA Staff, Dec 17, 2025 / 12:34 pm (CNA).
Catholic leaders in Illinois are backing a coalition of pro-life pregnancy centers and doctors suing the state government over a law that requires them to refer women to abortion providers even if they object to the procedure on religious grounds. The lawsuit, National Institute of Family and Life Advocates v. Treto, challenges a 2016 Illinois rule that requires health care providers who refuse to perform abortions to nevertheless tout the “benefits” of the procedure and refer women to abortion clinics. In April the U.S. District Court for the Northern District of Illinois partly blocked the law, ruling that it violates freedom of speech in forcing providers to relay the alleged benefits of abortion. The court, however, held that the abortion referral requirement is legal. The case is currently at appeal from both sides in the 7th U.S. Circuit Court of Appeals. On Dec. 16, the Catholic Conference of Illinois and the Illinois Catholic Health Association joined several Orthodox advocates in an amicus brief urging the court to offer the “highest level of protection” to the religious speech of the pro-life plaintiffs. “Providing the highest level of First Amendment protection to religious institutions gives them the predictability they need to pursue their religious missions,” the filing said, arguing that forcing health care providers to refer abortions “could lead people to believe that such conduct is morally acceptable.”First Amendment jurisprudence, the filing argues, leaves “no doubt that the abortion-referral requirement burdens core religious speech without proper justification.”Chicago archbishop Cardinal Blase Cupich said in a press statement that “every life deserves protection and care, no matter how fragile or dependent.” “The Church in Illinois is standing up for that eternal truth against Illinois’ effort to deny it,” the prelate said. Springfield Bishop Thomas Paprocki similarly argued that Catholics “must be free to live according to the 2,000-year-old teachings of our faith without government intrusion.” “Illinois’ mandate threatens that freedom by forcing Catholic ministries and health care professionals to promote a practice we believe is gravely wrong,” he said. “We pray the court will put a swift stop to it.”The amicus brief was filed by the religious liberty law group Becket. Lawyers for the pro-life plaintiffs have argued that the abortion referral requirement violates the U.S. Supreme Court’s 2016 ruling in National Institute of Family and Life Advocates v. Becerra, which was brought by the same organization at the head of the Illinois dispute. The Supreme Court held in that decision that a similar California rule appeared to violate the First Amendment by “requiring [pro-life providers] to inform women how they can obtain state-subsidized abortions.”](https://unitedyam.com/wp-content/uploads/2025/12/catholic-leaders-back-pregnancy-centers-doctors-in-federal-suit-over-abortion-referrals-catholic-illinois-state-capitol-in-springfield-credit-paul-brady-photography-shutterstockcna-staff.webp)
