The Pillar this week reported on an interesting jury award in litigation over the failure of a Catholic hospital’s pension plan. The report says in part:
Albany’s retired Bishop Edward Scharfenberger filed for bankruptcy this month, shortly after a New York court assigned him personal liability for the failure of a shuttered Catholic hospital’s pension plan.
In a December 12 judgement, Scharfenberger, who led the Albany diocese from 2014 until October of this year, was assigned 10% personal liability in a $54 million judgement for compensatory damages against the former board of St. Clare’s Hospital, which closed in 2008.
The bishop immediately filed for bankruptcy protections, with his personal assets estimated to cover between 2 and 5 percent of his liability for the hospital pensions.
The ruling is unique in that it held personally liable the bishop, as well as his deceased predecessor Howard Hubbard and deceased former diocesan vicar general, but not the Diocese of Albany as a corporation.
The ruling could end up reshaping the landscape of Catholic institutions in America — and will almost certainly trigger a national rethink about bishops’ involvement with Catholic institutions.
[Thanks to Thomas Rutledge for the lead.]