The Roman Catholic Diocese of Albany, New York

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF NEW YORK
__________________________________________
In re: 	:
:
THE ROMAN CATHOLIC DIOCESE 	:
OF ALBANY, NEW YORK, 	:
: 	Case No. 23-10244-1 (PGR)
Debtor. 	: 	Chapter 11
__________________________________________:
APPEARANCES:
WHITEMAN OSTERMAN & HANNA, LLP 	FRANCIS J. BRENNAN, ESQ.
Counsel for Debtor
80 State Street, 11th Floor, Albany, New York 12207
WILLIAM K. HARRINGTON, U.S. TRUSTEE 	ALICIA M. LEONARD, ESQ.
Office of the United States Trustee, Region 2
11A Clinton Avenue, Room 620, Albany, New York 12207
LEMERY GREISLER, LLC 	MEGHAN M. BREEN, ESQ.
Counsel for the Official Committee of Unsecured Creditors
677 Broadway, 8th Floor, Albany, New York 12207
STINSON LLP 	ROBERT T. KUGLER, ESQ.
Counsel for the Official Committee of Tort Claimants
50 South 6th Street #2600, Minneapolis, Minnesota 55402
MORITT HOCK & HAMROFF, LLP 	THERESA A. DRISCOLL, ESQ.
Special Counsel to the Office of the New York State Attorney General
on behalf of the St. Clare’s Pensioners
400 Garden City Plaza, Garden City, New York 11530
Signed this 30 day of April, 2026.
Patrick G. Radel
_______________________________
United States Bankruptcy Judge
So Ordered.
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AARP FOUNDATION 	VICTORIA WILLIAMSON, ESQ.
Counsel for the Hartshorne Plaintiffs
601 E Street NW, Washington, DC 20049
MEMORANDUM-DECISION AND ORDER
GRANTING JOINT MOTION TO AUTHORIZE GROUP CLAIM
AND DENYING MOTION TO ESTABLISH CLAIMS BAR DATE AND
APPROVE FORM AND NOTICE OF CLAIMS BAR DATE
In December of 2025, a jury in Schenectady, New York awarded $54.2 million
to 1,124 former employees of St. Clare’s Hospital. 	The jury found that several
defendants, including two former bishops of the Roman Catholic Diocese of Albany,
failed to properly administer the hospital’s pension plan. 	The Diocese is liable for
this award, subject to a pending appeal.
The New York State Attorney General, working in collaboration with the
AARP Foundation, litigated the former employees’ case, obtained the verdict, and is
defending the appeal in state court. On March 19, 2026, the Attorney General filed
a proof of claim (the “Group Claim”) in this bankruptcy case on behalf of the former
employees of St. Clare’s (the “St. Clare’s Pensioners”).
Presently pending is a Joint Motion by the Attorney General and AARP, on
behalf of the St. Clare’s Pensioners, for allowance of the Group Claim. (Docket No.
2518). The Diocese, supported by the Official Committee of Tort Claimants (the “Tort
Committee”),1 opposes the Joint Motion and seeks a traditional Chapter 11 claims
solicitation and filing process. (Docket No. 2516).
For the reasons that follow, this Court grants the Joint Motion — allowance of
the Group Claim is permissible, efficient, and equitable. The Diocese’s motion for a
1 The Tort Committee represents the interests of individuals asserting clerical sexual abuse claims.
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claims bar date and traditional claims noticing and filing procedures is denied as
moot.
JURISDICTION
This Court has core jurisdiction over the parties and the subject matter of this
contested matter under 28 U.S.C. §§ 1334(b) and 157(b)(2). 	Venue is proper in this
Court pursuant to 28 U.S.C. §§ 1408 and 1409.
BACKGROUND
The Diocese is a not-for-profit corporation canonically established in 1847 and
incorporated pursuant to a special act of the New York Legislature in 1941. (Docket
No. 6, at ¶ 2, 7). 	The Diocese, by and through its offices, parishes, and ministry
entities, provides religious services and performs charitable work across fourteen
counties in upstate New York. Id. at ¶ 19-54.
The Diocese is a defendant in hundreds of lawsuits brought by individuals
asserting claims of clerical sexual abuse. Id. at ¶ 72.
In addition, the Diocese is a defendant in two lawsuits alleging breach of
contract and breach of fiduciary duty regarding the management and funding of the
pension fund intended for the benefit of employees of St. Clare’s Hospital. Id. at ¶ 80.
The first lawsuit was filed in September of 2019 by Mary Hartshorne and 174 other
pensioners. (Docket No. 2518-2, at 2). 	The second suit was filed in May of 2022 by
Letitia James, the Attorney General of the State of New York. (Docket No. 2518-2, at
3). The cases were consolidated for all purposes by the Honorable Vincent W. Versaci,
Acting Justice of the New York State Supreme Court. Id.
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On March 15, 2023, the Diocese filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code. (Docket No. 1). 	In May of 2023, the Official
Committee of Unsecured Creditors moved for relief from the automatic stay to allow
the consolidated St. Clare’s lawsuit to proceed in state court to a determination of
liability and damages. (Docket No. 185). 	The Honorable Robert E. Littlefield, Jr.,
United States Bankruptcy Judge, granted that motion in an Order dated June 15,
2023.2 (Docket No. 265).
On July 13, 2023, the Diocese moved for an Order extending and establishing
a claims bar date and approving the form and manner of notice of the bar date (the
“first bar date motion”). (Docket No. 334). The first bar date motion excluded the St.
Clare’s Pensioners due to the pendency of the state court case. (Docket No. 334, ¶ 16-
17).
Judge Littlefield granted the first bar date motion in an Order dated August
23, 2023. (Docket No. 445). In pertinent part, the Order provided that the claims bar
date for St. Clare’s Pensioners would “be set by further Court Order.” (Docket No.
445, at 3).
The St. Clare’s lawsuit was tried before a jury in November and December of
2025, with Justice Versaci presiding. (Docket No. 2518-2, at p. 3). The jury returned
a verdict finding that the St. Clare’s Pensioners were entitled to $54.2 million in
damages. (Docket No. 2518-2, at ¶ 9).
2 This case was assigned to this Court on October 1, 2025, upon Judge Littlefield’s retirement.
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The jury did not find the Diocese directly liable. (Docket No. 2518-2, at ¶ 4-5).
However, the jury determined that several of the named defendants (including two
former bishops of the Diocese) were employees or agents of the Diocese and committed
wrongful conduct in furtherance of the Diocese’s business and within the scope of
their employment or agency. (Docket No. 2518-2, at ¶ 6).
The parties dispute the impact of this aspect of the verdict. 	In a post-trial
Order 	dated 	December 	23, 	2025, 	Justice 	Versaci 	found 	that 	the 	Diocese 	was
vicariously liable based upon the jury’s scope of employment findings. (Docket No.
2518-2, at ¶ 6-7). 	The Diocese is pursuing an appeal before the New York State
Supreme Court, Appellate Division, Third Judicial Department. (Docket No. 2516, at
¶ 10).
On March 19, 2026, the Diocese moved to establish a claims bar date and
approve the form and manner of notice for claims by the St. Clare’s Pensioners.
(Docket No. 2516). The Official Committee of Unsecured Creditors (Docket No. 2542),
along with the New York State Attorney General and AARP Foundation (Docket No.
2544) opposed the motion. The Diocese filed a Reply in further support of is motion.
(Docket No. 2559).
Also, on March 19, 2026, Monica A. Connell, Esq., Assistant Attorney General
and Special Litigation Counsel to the New York State Attorney General, filed the
Group Claim on behalf of the St. Clare’s Pensioners. (Docket No. 2518, Ex. A).
Immediately 	thereafter, 	the 	Office 	of 	the 	Attorney 	General 	and 	AARP
Foundation, by and through counsel, filed the Joint Motion to Authorize Group Claim
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on behalf of the St. Clare’s Pensioners. (Docket No. 2518). The Unsecured Creditors’
Committee supports the motion. (Docket No. 2520). 	The Diocese (Docket No. 2546)
and Tort Claimants’ Committee (Docket No. 2550) oppose it. The Attorney General
and AARP filed a reply in further support of the motion. (Docket No. 2557).
This Court heard oral argument on both motions in Albany, New York, on April
16, 2026, with appearances as indicated above, and reserved decision.3
ANALYSIS
Permissibility of a Group Proof of Claim
Section 501(a) of the Bankruptcy Code provides, in pertinent part, that “[a]
creditor … may file a proof of claim.” 	A “proof of claim” is defined as a “written
statement of a creditor’s claim.” Fed. R. Bankr. P. 3001(a). A proof of claim must be
signed by “a creditor or the creditor’s agent ….” Fed. R. Bankr. P. 3001(b).
At least two courts have concluded that an authorized agent may file a single
proof of claim on behalf of a group of creditors. See In re Tronox Inc., No. 09-10156
(MEW), 2015 WL 3799702, at *11 (Bankr. S.D.N.Y. June 17, 2015) (finding that a
“group” claim filed by an “Ad Hoc Committee, which represented that it had authority
to file the claim on behalf of the individuals listed therein,” was “acceptable”); Adair
v. Bartholow (In re Great Western Cities, Inc. of New Mexico), 107 B.R. 116, 119 (N.D.
Tex. 1989).
This Court finds this authority persuasive and concludes that a group claim is
appropriate under the facts presented here.
3 The Group Claim motion also sought a determination regarding the pensioners’ right to vote on
plan confirmation. During oral argument, counsel for the Attorney General withdrew that request.
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First, as the court in Great Western Cities recognized, “[n]either section 501
nor Rule 3001 prohibits an agent with authority from filing claims on behalf of a large
group of individuals.” Great Western Cities, 107 B.R. at 119.
In addition, Federal Rule of Bankruptcy Procedure 1001 provides that the
procedural rules and official forms (which includes the proof of claim form) should be
“construed, administered, and employed by both the court and the parties to secure
the just, speedy, and inexpensive determination of every case and proceeding.” Fed.
R. Bankr. P. 1001(a); see also Pepper v. Litton, 308 U.S. 295, 307–08, 60 S. Ct. 238,
246, 84 L. Ed. 281 (1939) (“[I]n the exercise of its equitable jurisdiction the
bankruptcy court has the power to sift the circumstances surrounding any claim to
see that injustice or unfairness is not done in administration of the bankrupt estate.”).
Second, 	a 	group 	claim 	is 	particularly 	appropriate 	where, 	as 	here, 	the
alternative 	would 	involve 	more 	than 	a 	thousand 	individual 	claims, 	imposing
extensive expense upon the estate. See Great Western Cities, 107 B.R. at 119 (“The
court finds no support for the absurd practice that would flow from a contrary rule,
pursuant to which the bankruptcy court and clerk would be inundated by 2,500
separate proofs of claim rather than one or more documents that expressly identify
each creditor.”). The interests of efficiency favor allowing the Group Claim.
Third, allowing a group claim avoids accounting anarchy. The initial amount
due to each pensioner was established in the state court. (Docket No. 2518, Ex. A, at
12-37). The pensioners are also entitled to interest on their initial award. (Id. at 9).
Rather than relying on individual pensioners to accurately account for their initial
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award and calculate interest, the Group Claim incorporates, and attaches, an exhibit
from Justice Versaci’s post-trial order, which identifies each pensioner and states the
amount of their award. (Docket No. 2518, Ex. A, at 12-37). An anticipated amended
claim will include interest calculated by an actuary retained to act on the pensioners’
behalf. (Docket No. 2520, at ¶ 12). The interests of accuracy favor allowing the Group
Claim.
Fourth, the claims solicitation process in a Chapter 11 case involving a large
number 	of 	consumer 	claimants 	is 	cumbersome 	and 	confusing 	— 	a 	concern
exacerbated here as many of the pensioners are advanced in age and have limited
resources. (Docket No. 2518, at ¶ 13). Disallowing the Group Claim would either (1)
require the Unsecured Creditors’ Committee, Attorney General, and/or AARP to
undertake the effort and expense of coordinating and facilitating the preparation and
filing of more than one thousand individual claims to reach the exact same result as
will be achieved by allowing the Group Claim or (2) risk that a pensioner or
pensioners will not receive a distribution because they failed to receive notice, file a
claim, complete the form properly, calculate their claim correctly, and/or submit the
claim timely. The interests of equity favor allowing the Group Claim.
Fifth and finally, the Diocese and Tort Committee’s suggestion that allowing
the Group Claim will prejudice pensioners rings hollow. 	They posit a hypothetical
pensioner who might object to a claim having been filed on their behalf.
The idea that a pensioner would object to the Attorney General securing a
recovery for their benefit and safeguarding their right to that recovery in this
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bankruptcy strains credulity. Some of the pensioners literally broke their backs
caring for St. Clare’s patients — many of them doubtlessly did so based on their belief
in the hospital’s Catholic charism — all of them definitely did so with the expectation
of a promised pension.4
Moreover, the amount awarded to each pensioner is precisely fixed, explicitly
stated in the Group Claim, and undisputed.5 	As such, no pensioner would have a
reason, or basis, for objecting to the amount assigned to them in the Group Claim.
The Diocese and Tort Committee also contend that the Group Claim raises a
due process concern in that a pensioner may be unaware that a claim was filed on
their behalf. 	This Court does not share that concern, primarily due to the lack of
identified prejudice to any of the pensioners, which stands in contrast to the potential
prejudice inherent in imposing a traditional claims process.
However, out of an abundance of caution, the Attorney General is directed to
mail a copy of the Group Claim to each of the St. Clare’s Pensioners, along with a
cover letter providing appropriate contact information in the event a pensioner has a
question or concern.
The Attorney General’s Authority
The conclusion that a group claim is allowable and appropriate in this case is
necessary, but not sufficient, to resolve the pending motions. As noted above, subject
4 When pressed at oral argument to support the claim of prejudice, Attorney Kugler envisioned a
devout pensioner who would want the Diocese to retain the funds awarded to them in order to
advance the Church’s mission. Nothing in this decision should be interpreted to find that any
pensioner is compelled to cash a check they may receive in connection with this case.
5 During oral argument, the Diocese confirmed that while it is appealing the verdict and finding of
liability, it does not contest the damages calculation and/or allocation.
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to exceptions not applicable here, “[o]nly a creditor or the creditor’s agent may sign a
proof of claim ….” See Fed. R. Bankr. P. 3001(b).
Thus, this Court must determine whether the Attorney General was the
pensioners’ agent for purposes of filing the Group Claim.
This Court answers in the affirmative.
Justice Versaci determined that the Attorney General had the authority under
applicable state law to pursue the pensioners’ claims against the defendants,
including the Diocese. People by James v. Roman Cath. Diocese of Albany, 87 Misc.
3d 694, 713, 236 N.Y.S.3d 866 (N.Y. Sup. Ct. 2025).
Justice Versaci’s decision is well-supported and consistent with applicable
state law. The Attorney General is charged with supervising non-profit corporations,
which includes ensuring that their officers, directors, and trustees fulfill their
fiduciary duties. See N.Y. Est. Powers & Trusts Law § 8-1.4. 	The Attorney General
is vested with the authority to seek monetary damages against “directors, officers,
and key persons” to redress violations of their fiduciary duties. See N.Y. Not-for-Profit
Corp. Law § 720; see also N.Y. Not-for-Profit Corp. Law § 112 (a)(7) & (a)(10).
The Attorney General is empowered to “institute appropriate proceedings” as
needed to carry out her duties. See N.Y. Est. Powers & Trusts Law § 8-1.4(m).
The Attorney General was thus authorized to act as an agent on behalf of the
St. Clare’s Pensioners for the purpose of litigating their claims, establishing liability,
defending the judgment, and recovering damages.
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In opposing the Joint Motion, the Diocese and Tort Committee argue that the
Attorney General’s agency and authority stop at the federal courthouse door, which
prevents her from protecting the pensioners’ right to a recovery by filing a proof of
claim on their behalf.
Nothing in the Bankruptcy Code or Rules requires (or recommends) such a
result.
Moreover, courts have consistently recognized the ability of attorneys general
to appear and act in bankruptcy proceedings on behalf of groups of consumer
creditors. See, e.g., In re DeFelice, 77 B.R. 376, 379 (Bankr. D. Conn. 1987) (finding
that “public policy considerations favor the conclusion that the Attorney General has
standing to maintain [a non-dischargeability] proceeding on behalf of [the debtor’s]
consumer creditors”); In re Hemingway, 39 B.R. 619, 622 (N.D.N.Y. 1983) (finding
that New York Attorney General had standing to bring non-dischargeability action
on behalf of six consumers); In re Livaditis, 132 B.R. 897, 900 (Bankr. N.D. Ill. 1991)
(“It is well established that state Attorney Generals may prosecute dischargeability
actions under § 523(c) on behalf of injured creditors provided there is statutory
authority under their state law to do so.”) (collecting cases); In re SCBA Liquidation,
Inc., 489 B.R. 666, 687 (Bankr. W.D. Mich. 2013) (finding that state attorneys general
were permitted to file representative breach of warranty claims on behalf of citizens);
see also generally In re Taibbi, 213 B.R. 261, 271 (Bankr. E.D.N.Y. 1997) (“Even if the
consumers could have filed their own discharge or dischargeability complaints
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alleging claims under the consumer protection law, courts have granted standing to
public agencies notwithstanding consumers’ ability to commence their own actions.”).
As one court aptly explained:
State 	attorneys 	general 	are 	empowered 	under 	federal
bankruptcy law to intervene on behalf of the consumer
creditors for a reason: to ensure that the legal process
results in the best possible resolution for the consumers
without burdening each consumer with active participation
(otherwise, many consumers would be marginalized, as
meaningful 	participation 	may 	require 	personal 	legal
expertise and sufficient resources to personally participate,
or 	the 	financial 	wherewithal 	to 	obtain 	counsel 	to
participate).
In re U.S. Fidelis, Inc., 481 B.R. 503, 518 (Bankr. E.D. Mo. 2012).
This Court finds that the Attorney General’s established authority to act as
agent for the St. Clare’s Pensioners in pursuing their claims, protecting their rights,
and recovering their damages includes the authority to file a proof of claim on their
behalf.
CONCLUSION
The Joint Motion to Authorize Group Claim (Docket No. 2518) is GRANTED;
the Motion for Order Establishing Claims Bar Date for St. Clare’s Pensioners and
Approving the Form and Notice of Claims Bar Date (Docket No. 2516) is DENIED as
moot. Within fourteen (14) days of the date of this Memorandum-Decision and Order,
the Attorney General shall mail a copy of the Group Claim to each of the St. Clare’s
Pensioners, along with a cover letter providing appropriate contact information in the
event a pensioner has a question or concern.
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