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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![Trump urges Republican ‘flexibility’ on taxpayer-funded abortions #Catholic
President Donald Trump talks to Republicans about their stance on the Hyde Amendment on Jan. 6, 2026. | Credit: Mandel NGAN/AFP via Getty Images
Jan 6, 2026 / 18:10 pm (CNA).
President Donald Trump is asking congressional Republicans to be more flexible on taxpayer funding for abortions as lawmakers continue to negotiate an extension to health care subsidies related to the Affordable Care Act, also known as Obamacare.Some federal subsidies that lowered premiums for those enrolled in the Affordable Care Act expired in December. The Kaiser Family Foundation estimates that the average increase to premiums for people who lost the subsidies will be about 114%, from $888 in 2025 to $1,904 in 2026. The exact costs will be different, depending on specific plans.Trump has encouraged his party to work on extending those subsidies and is asking them to be “flexible” on a provision that could affect tax-funded abortion. Democrats have proposed ending the restrictions of the Hyde Amendment, which bans direct federal funding for abortions in most cases.“Let the money go directly to the people,” Trump said at the House Republican Conference retreat at the John F. Kennedy Center for the Performing Arts on Jan. 6.“Now you have to be a little flexible on Hyde,” the president said. “You know that you got to be a little flexible. You got to work something [out]. You got to use ingenuity. You got to work. We’re all big fans of everything, but you got to be flexible. You have to have flexibility.”The Hyde Amendment began as a bipartisan provision in funding bills that prohibited the use of federal funds for more than 45 years. Lawmakers have reauthorized the prohibition every year since it was first introduced in 1976.A study from the Charlotte Lozier Institute estimates that the Hyde Amendment has saved more than 2.6 million lives. According to a poll conducted by the Marist Institute for Public Opinion, which was commissioned by the Knights of Columbus, nearly 6 in 10 Americans oppose tax funding for abortions.However, in recent years, many Democratic politicians have tried to keep the rule out of spending bills. Former President Joe Biden abandoned the Hyde Amendment in budget proposals, but it was ultimately included in the final compromise versions that became law.Marjorie Dannenfelser, president of Susan B. Anthony Pro-Life America, criticized Trump for urging flexibility on the provision, calling its support “an unshakeable bedrock principle and a minimum standard in the Republican Party.”Dannenfelser said Republicans “are sure to lose this November” if they abandon Hyde: “The voters sent a [Republican] trifecta to Washington and they expect it to govern like one.”“Giving in to Democrat demands that our tax dollars are used to fund plans that cover abortion on demand until birth would be a massive betrayal,” she said.Dannenfelser also noted that, before these comments, Trump has consistently supported the Hyde Amendment. The president issued an executive order in January on enforcing the Hyde Amendment that accused Biden’s administration of disregarding this “commonsense policy.”“For nearly five decades, the Congress has annually enacted the Hyde Amendment and similar laws that prevent federal funding of elective abortion, reflecting a long-standing consensus that American taxpayers should not be forced to pay for that practice,” the executive order reads.“It is the policy of the United States, consistent with the Hyde Amendment, to end the forced use of federal taxpayer dollars to fund or promote elective abortion,” it adds.](https://unitedyam.com/wp-content/uploads/2026/01/trump-urges-republican-flexibility-on-taxpayer-funded-abortions-catholic-president-donald-trump-talks-to-republicans-about-their-stance-on-the-hyde-amendment-on-jan-6-2026.jpg)
![Food assistance, housing top Catholic Charities’ policy wish list in 2026 #Catholic
Credit: Jonathan Weiss/Shutterstock
Jan 2, 2026 / 07:00 am (CNA).
Many people who receive assistance through anti-poverty programs faced disruptions in 2025, and Catholic Charities’ wish list for 2026 includes government support for food assistance and housing.The largest disruption came in October when food stamps received through the Supplemental Nutrition Assistance Program (SNAP) were delayed amid the government shutdown. Funding for rental and heating assistance were also disrupted.Confusion about how to implement a memo in January from the Office of Management and Budget calling for a grant freeze also caused delays in funding related to health care, housing affordability, and food assistance.Luz Tavarez, vice president of government relations at Catholic Charities USA, said “people get nervous and scared” amid disruptions.Many Catholic Charities affiliates saw an influx in clients, especially during the shutdown, but Tavarez said there are “very poor people who rely on SNAP subsidies for their meals” and who “can’t get to a Catholic Charities [affiliate] or other food pantry for assistance” when it happens.Long-term eligibility and funding changes to SNAP were also approved in the tax overhaul signed into law in July. Previous rules only included a work requirement up to age 54, but the law extended those requirements up to age 64. It added stricter and more frequent checks for verifying the work requirements.It also shifted some funding responsibilities away from the federal government and to the states.Tavarez expressed concern about some of the SNAP changes as well, saying the government should end “burdensome requirements for individuals and states.”Under the new law, there are stricter rules for verifying a person’s immigration status for benefits. It also limited which noncitizens could receive SNAP benefits, which excluded some refugees and people granted asylum. Tavarez expressed concern about such SNAP changes, encouraging the government to permit “humanitarian-based noncitizens” to receive those benefits.Overall the 2025 tax law gave the biggest boost to the richest families while poorer families might get a little less help than before, according to the Congressional Budget Office.The bill added a work requirement for Medicaid recipients, and this will not take effect until 2027. Under the previous law, there was no work requirement for this benefit. It also shifts some Medicaid funding requirements onto the states.Tavarez said Catholic Charities has “concerns with how [work requirements are] implemented” moving forward but does not oppose the idea outright: “There’s dignity in work so the Church isn’t necessarily opposed to people working as long as there’s some opportunities for people to do other things and other issues are taken into consideration.”She also expressed concerns about funding shifts: “We know that not every state views things like SNAP and Medicaid as a good thing. We don’t know how states are going to balance their budget and prioritize these programs.”2026 wish listLooking forward to 2026, Tavarez said Catholic Charities hopes the government will restore full funding to the Temporary Emergency Food Assistance Program for food banks and bulk food distribution programs and ensure that funding is protected for school meals and the Special Supplemental Nutrition Program for Women, Infants, and Children.The Department of Housing and Urban Development (HUD) made policy changes in November that would focus its homelessness funding on “transitional” housing instead of “permanent” housing. This move is facing legal challenges.President Donald Trump’s administration initially sought to cut federal housing assistance and shift much of those costs to states, but this was ultimately not included in the final version of the 2025 tax law.In December, Trump promised an “aggressive” housing reform plan that focuses on reducing costs. At this time, the specifics of that proposal have not been announced. The increased cost to buy a new home has outpaced the growth in wages for decades.Tavarez said Catholic Charities is focused on housing affordability in 2026 and that the solution must be multifaceted. This includes “building and developing affordable housing,” “a tax credit for developers,” “more affordable housing units,” and subsidies and Section 8 vouchers for low-income Americans, she said.“We recognize that there’s a real crisis — I think everybody does in a bipartisan way — but there needs to be a real bipartisan approach and it’s going to require money,” Tavarez said.Tax credits and economic trendsSome changes to the tax code included in the 2025 tax law are geared toward helping low-income Americans.Specifically, the law reduced taxes taken from tips and overtime work. It also increased the child tax credit from $2,000 to $2,200 and tied the credit to inflation, meaning that it will increase each year based on the rate of inflation.Tavarez characterized the changes to the child tax credit as a “win” and hopes it can be expanded further.The economy has been a mixed bag, with November unemployment numbers showing a 4.6% rate. In November of last year, it was slightly lower at 4.2%.Inflation has gone down a little, with the annual rate being around 2.7%. In 2024, it was around 2.9%. The average wage for workers also outpaced inflation, with hourly wages increasing by 3.5%, which shows a modest inflation-adjusted increase of 0.8%.](https://unitedyam.com/wp-content/uploads/2026/01/food-assistance-housing-top-catholic-charities-policy-wish-list-in-2026-catholic-credit-jonathan-weiss-shutterstockjan-2-2026-0700-am-cna-many-people-who-receive-assistance-th.jpg)
![Vice President Vance presents a Christian vision of politics #Catholic
U.S. Vice President JD Vance. / Credit: Gage Skidmore, CC BY-SA 4.0, via Wikimedia Commons
CNA Staff, Dec 23, 2025 / 14:27 pm (CNA).
U.S. Vice President JD Vance, America’s second Catholic vice president, laid out a distinctly Christian vision for American politics in a speech this week, declaring that “the only thing that has truly served as an anchor of the United States of America is that we have been and, by the grace of God, we always will be a Christian nation.”Speaking to more than 30,000 young conservatives at Turning Point USA’s AmFest 2025 some three months after the death of its founder Charlie Kirk, Vance called for a politics rooted in a Christian faith that honors the family, protects the weak, and rejects what he described as a decades-long “war” on Christianity in public life.The Christian faith has provided a “shared moral language” since the nation’s founding, the Yale-trained lawyer argued, which led to “our understanding of natural law and rights, our sense of duty to one’s neighbor, the conviction that the strong must protect the weak, and the belief in individual conscience.”“Christianity is America’s creed,” the vice president said to loud cheers, while acknowledging that not everyone needs to be a Christian and “we must respect each individual’s pathway” to God. Even so, he said, “even our famously American idea of religious liberty is a Christian concept.” Vance described how, over the past several decades, “freedom of religion transformed into freedom from religion” as a result of the cultural assault on Christian faith from those on “the left” who have “labored to push Christianity out of national life. They’ve kicked it out of the schools, out of the workplace, out of the fundamental parts of the public square.”He continued: “And in a public square devoid of God, we got a vacuum. And the ideas that filled that void preyed on the very worst of human nature rather than uplifting it.”Vance said cultural voices opposed to Christian faith “told us not that we were children of God, but children of this or that identity group. They replaced God’s beautiful design for the family that men and women could rely on … with the idea that men could turn into women so long as they bought the right bunch of pills from Big Pharma.” The former U.S. senator and Catholic convert credited President Donald Trump for ending the cultural “war that has been waged on Christians and Christianity in the United States of America,” touting the administration’s policy priorities as the fruit of Christian motivation.“We help older Americans in retirement, including by ending taxes on Social Security, because we believe in honoring your father and mother rather than shipping all of their money off to Ukraine,” he said. “We believe in taking care of the poor, which is why we have Medicaid, so that the least among us can afford their prescriptions or to take their kids to see a doctor.”Speaking of the despair he felt after the assassination of his friend Kirk, he said: “What saved me was realizing that the story of the Christian faith … is one of immense loss followed by even bigger victory. It’s a story of very dark nights followed by very bright dawns. What saved me was remembering the inherent goodness of God and that his grace overflows when we least expect it.”Of masculinity, Vance said: “The fruits of true Christianity are good husbands, patient fathers, builders of great things, and slayers of dragons. And yes, men who are willing to die for a principle if that’s what God asked them to do.”He described how he saw the fruits of Christian men living out their faith during a recent visit to a men’s ministry that aids those who struggle with addiction and homelessness: “They feed them. They clothe them. They give them shelter and financial advice. They live out the very best part of Christ’s commission.”After eating lunch with some of the men who were “all back on their feet” after receiving help, Vance said he saw that the answer to “What saved them?” was not “racial commonality or grievance … a DEI prep course” or “a welfare check.”“It was the fact that a carpenter died 2,000 years ago and changed the world in the process.” “A true Christian politics,” he said, “cannot just be about the protection of the unborn or the promotion of the family. As important as those things absolutely are, it must be at the heart of our full understanding of government.” On immigration policy, Vance has challenged U.S. bishops, popesThe vice president has publicly disagreed with the U.S. bishops on their reaction to the Trump administration’s immigration policies, as well as with Pope Leo XIV and the late Pope Francis, who seemed to criticize Vance in a letter the pontiff penned to the U.S. bishops last winter. In defense of the administration’s approach to immigration, Vance had in a late January interview invoked an “old school … Christian concept” he later identified as the “ordo amoris,” or “rightly ordered love.” He said that according to the concept, one’s “compassion belongs first” to one’s family and fellow citizens, “and then after that” to the rest of the world.After Pope Leo on Nov. 18 asked Americans to listen to U.S. bishops’ message opposing “the indiscriminate mass deportation of people” and urging the humane treatment of migrants, Vance countered: “Border security is not just good for American citizens. It is the humanitarian thing to do for the entire world.”Vance continued: “Open borders” do not promote “[human] dignity, even of the illegal migrants themselves,” citing drug and sex trafficking.“When you empower the cartels and when you empower the human traffickers, whether in the United States or anywhere else, you’re empowering the very worst people in the world,” Vance said.In this week’s AmFest speech, he touted the administration’s successes regarding immigration: “December marks seven months straight of zero releases at the southern border. More than 2.5 million illegal immigrants have left the United States. The first time in over 50 years that we have had negative net migration.”At the end of the speech, Vance told the thousands of young people that while “only God can promise you salvation in heaven” if they have faith in God, “I promise you closed borders and safe communities. I promise you good jobs and a dignified life … together, we can fulfill the promise of the greatest nation in the history of the earth.”](https://unitedyam.com/wp-content/uploads/2025/12/vice-president-vance-presents-a-christian-vision-of-politics-catholic-u-s-vice-president-jd-vance-credit-gage-skidmore-cc-by-sa-4-0-via-wikimedia-commonscna-staff-dec-23-2025-1427-p.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)
