St. Joseph Pension Fund Collects $11M, Puts Pressure on Diocese and CharterCare
Wednesday, September 05, 2018
The major fraud case filed on behalf of the failed St. Joseph pension fund has yielded its first settlement agreement — more than $11 million dollars. The final number may grow higher.
According to documents received by the court late Tuesday, and secured by GoLocal, the receiver and de facto, the old charitable function of St. Joseph Hospital, have reached a settlement.
The receiver represents the failed retirement plan of St. Joseph Health Services. The pension plan was thrust into receivership in August 2017 and has an estimated shortfall of more than $118 million. It is the largest pension failure in Rhode Island's history and effect more than 2,700 plan members.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“Petitions this Court to approve the proposed settlement (“Proposed Settlement”) of claims the Receiver has asserted against CharterCARE Community Board (“CCCB”), St. Joseph Health Services of Rhode Island (“SJHSRI”), and the corporation Roger Williams Hospital (“RWH”) (collectively the “Settling Defendants”), in a lawsuit filed in the United States District Court for the District of Rhode Island,” reads the settlement.
The settlement was negotiated by special investigator Max Wistow in conjunction with the receiver Stephen Del Sesto.
Case Continues Against Ten Other Litigants
The case continues against more than ten other litigants including the two entities with the greatest potential exposure — the Diocese of Providence and ChaterCare.
The Diocese of Providence is under fire on this case for failing to properly fund the retirement plan before selling their interest in the hospital, as well as for the Lay Employees retirement fund which is also threatened with economic uncertainty according to Diocese financial documents uncovered in June by GoLocal. The Lay Employees Retirement Fund represents thousands of former and present Catholic school teachers and staff.
In addition, the Bishop of the Diocese of Providence Thomas Tobin is being heavily scrutinized for his time as a priest and as the Auxillary Bishop for the Diocese of Pittsburgh during the 1980s and early 1990s.
During Tobin's tenure in Pennsylvania, the massive sexual abuse took place. Across the state, more than 300 priests are directly linked to the sexual abuse of more than 1,000 children, according to a Grand Jury report. Tobin has denied direct knowledge of the abuse.
About the Settlement
Specifically, settlement documents submitted to the court state, “Immediate payment of the Initial Lump Sum of a minimum of $11,150,000, which is 95% of the Settling Defendants’ combined liquid operating assets of $11,525,000, up to a maximum of approximately $11,900,000 if the Rhode Island Department of Labor and Training releases the entire DLT Escrow in the amount of approximately $750,000 prior to the due date for payment of the Initial Lump Sum…”
The package of documents submitted to the court totals 476 pages. Judge Brian Stern will need to approve the petition for the settlement, with hearings on this case scheduled for this week.
This settlement is highly complicated and the monetary value could increase as the settling party -- Charter Care Community Board -- has additional assets, and one asset has tremendous value.
“In connection with the 2014 Asset Sale, Settling Defendant CCCB received a 15% membership interest in Prospect CharterCare, LLC, which indirectly owns and operates Roger Williams Hospital and Our Lady of Fatima Hospital. The current value of those interests is unknown to Plaintiffs,” states the settlement.
In June, two related massive lawsuits were filed simultaneously in state and federal court by the receiver in the collapsed St. Joseph pension fund - the largest pension failure in Rhode Island history.
Related Slideshow: 10 Shocking Elements of the St. Joseph Pension Fund Lawsuit Against the Diocese and Others
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