ANDERSON — Eight months after filing for bankruptcy, Madison Park Church of God has restructured its debts and emerged from the court proceedings.
“It was very amicable,” said Rob Spaulding, business administrator for Madison Park Church of God. “We entered Chapter 11 with an agreement already in place and we just had to work through the process.”
Chapter 11 bankruptcy allows a business in financial distress to reorganize its debt under the protection of the courts until it can become profitable again.
In July, the church, 6607 Providence Drive, filed for bankruptcy when it was unable to pay a $5.8 million balloon payment on a bond issued in 2007. The initial loan was for almost $17.5 million to fund construction of the church’s community life center and its infrastructure located near exit 226 on Interstate 69.
The loan, managed by a California firm, was made prior to the real estate values plummeting in the recent economic downturn.
Spaulding said the repayment of the loan has since been renegotiated and the church is now on a new payment schedule.
“We refinanced it with the bond holders,” he said. “The court proceedings were necessary to bind everyone to the agreement.
“Everyone got back their full investment – or will be getting it back.”
David Whitmoyer, vice chair for the board of elders, said there was no debt reduction from the court proceedings and that was not the reason for the bankruptcy filing. “We had known for a couple of years we would not be able to make those payments,” Whitmoyer said.
He said negotiations with creditors were unsuccessful until the bankruptcy was filed.
“Everything, in our opinion, went very smooth,” Whitmoyer said. “We are real happy with the way it went.”
With the exception of at least one creditor, regarding legal fee payments for the proceedings, there were no objections to the final bankruptcy judgement.