Creditors, Diocese at odds over motion to probe Fidelis sale
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ALBANY, N.Y. (NEWS10) -- NEWS10 has been closely following the struggle of the former St. Clare’s hospital workers, who have been fighting to secure all of the pension funds they were promised – whether it be from the state, or the Albany Catholic Diocese. An upcoming hearing in bankruptcy court could be the next step for the pensioners as they search for answers.
The Catholic church sold the Fidelis Care insurance company in 2018. Billions of dollars from that sale were put into the Mother Cabrini Health Foundation, and the pensioners’ lawyers are questioning the fact that the proceeds didn’t instead go toward millions of dollars in liabilities to the former hospital workers, as well as hundreds of survivors of child sexual abuse.
Attorneys for the St. Clare’s pensioners filed a motion for discovery and testimony about the sale of Fidelis. Attorneys for the Diocese claim while they have sympathy for the petitioners, the motion for discovery, which would include a deposition of Bishop Edward Scharfenberger, should be denied.
On August 17, attorneys for the Diocese filed their opposition, claiming in part, "neither the bishop nor debtor nor any other individual or entity had (nor could it have) any beneficial ownership interest in Fidelis, a charitable not-for-profit corporation," adding that neither the bishop nor Diocese had any ability to control or direct the transfer of Fidelis’ assets to the Diocese.
Monday, the attorneys for the Clare’s pensioners filed a response, doubling down on their motion, writing in part, "the committee simply wants access to information in the Diocese’s possession about the sale of Fidelis Care and the resulting Mother Cabrini Health Foundation."
According to the lawyers for the "Official Committee of Unsecured Creditors," as the pensioners and related petitioners are named in the filings, "the Fidelis transaction – netting $3.2 billion to the Cabrini Foundation – is too large for the committee to simply ignore."
They argue that if it’s true that the Bishop and Diocese were far removed from the Fidelis transaction, as lawyers for the Diocese claim, it should be relatively simple and straightforward to search records for relevant discovery.
These are just a few of the arguments from dozens of pages of court documents going back and forth over this motion. The exchange also garnered the support of the lawyers representing alleged sexual abuse survivors of the Church. Counsel for the group known as "The Official Committee of Tort Claimants" filed a response stating they agree with the Creditors' Committee's "assessment and approach."
The hearing on the motion is scheduled for September 18th at 1:30 in Albany in front of Judge Robert E. Littlefield, Jr.