**Core Concept**
The hippocampus is essential for the formation of new long-term memories, particularly declarative memories. It acts as a critical hub in the memory consolidation process, transforming short-term memories into stable long-term storage through synaptic plasticity and neurochemical mechanisms.

**Why the Correct Answer is Right**
The hippocampus is vital for encoding and consolidating new long-term declarative memories. Damage to the hippocampus, especially bilateral damage as in this case, impairs the ability to form new long-term memories. While patients may retain existing memories (like old declarative or procedural memories), they cannot create new ones. This is well-documented in patients with hippocampal sclerosis or post-traumatic encephalopathy, who show anterograde amnesia.

**Why Each Wrong Option is Incorrect**
Option A: Recalling an old declarative memory is preserved in hippocampal damage because memory retrieval depends on cortical regions, not hippocampal storage.
Option B: Procedural memories (e.g., riding a bike) are stored in the basal ganglia and cerebellum and are unaffected by hippocampal damage.
Option C: Short-term memory is primarily maintained in the prefrontal cortex and is not dependent on the hippocampus.

**Clinical Pearl / High-Yield Fact**
Patients with bilateral hippocampal damage exhibit **anterograde amnesia**—they cannot form new long-term memories, but can still recall old memories and perform routine procedural tasks. This is a classic hallmark of hippocampal dysfunction.

✓ Correct Answer: D. Forming a new long-term memory