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Albany Catholic diocese bankruptcy case moves to mediation

Albany Catholic diocese bankruptcy case moves to mediation

A U.S. Bankruptcy Court judge on Thursday appointed two mediators who have deep experience in litigation involving sexual abuse cases to lead efforts in the coming months to resolve hundreds of lawsuits filed against the Roman Catholic Diocese of Albany.

Judge Robert E. Littlefield, Jr. selected the co-mediators, Roger Kramer and Paul Van Osselaer, during a hearing in U.S. District Court in Albany.

Kramer is a Minnesota attorney who has served as a mediator in more than 1,500 cases, including some involving other Catholic dioceses in New York that filed for bankruptcy as a result of Child Victims Act cases. Van Osselaer is also an experienced mediator and specializes in insurance coverage, which will be a critical component in determining any financial responsibility for the Albany diocese’s insurers in the sex abuse litigation.

“This will be expedited mediation; it will be a matter of months and if we can’t reach a deal, within months, we’ll be back in court seeking relief from stay and getting trial dates,” said Jeff Anderson, whose law firm has nearly 200 claims pending against the Albany diocese.

Cynthia LaFave, an Albany attorney whose firm is working with Anderson’s firm on the cases, said it’s “a very good thing that it’s moving forward.”

“Everybody needs closure. Everybody needs this to move forward,” LaFave said of the mediation.

It’s unclear whether the mediation will immediately include any claims from the roughly 1,100 former employees of the now-closed St. Clare’s Hospital in Schenectady, whose pension plan was shut down in 2018 with a $50 million shortfall. St. Clare’s closed in 2008 and merged with Ellis Hospital. The former employees’ retirement portfolios were wiped out by the hospital’s depleted pension fund, which they allege was mismanaged by top officials associated with the Roman Catholic Diocese of Albany.

The pension plan was shut down despite having received $28.5 million in Medicaid benefits from the state to fully fund the plan. Of the 1,100 retirees eligible for a pension, about 650 were told they would get nothing. The remaining 450 or so were paid 70 percent of their retirement benefits. The fund was created in 1959, about a decade after the diocese co-founded the hospital.

The alleged sexual abuse victims of priests and others associated with the Albany diocese are expected to be compensated using the diocese’s assets and also its insurance policies. But the diocese is contesting it has any responsibility in the St. Clare’s pension collapse. That legal battle is pending in state Supreme Court, where lawsuits filed by the pensioners and the state attorney general’s office have accused deceased former Albany Bishop Howard J. Hubbard — in league with other diocesan officials — of falsely telling the Internal Revenue Service that required annual contributions were being made to the pension plan.

Read the complete article here.

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