The Herald Bulletin

Morning Update

Local News

December 5, 2012

Church, school ask for mediation in bankruptcy

INDIANAPOLIS — Anderson Christian School and the Lindberg Road Church of Christ have asked for mediation in a complicated bankruptcy case stemming from a failed financing plan, where church leaders took out life insurance policies on 11 of their older members.

The life insurance policies were to back a $2.5 million line of credit, taken out in 2007 from the Fort Wayne-based Star Financial Bank, to expand its child care center and remodel the school.

“It was a great plan except for one thing — it didn’t work,” said the church’s attorney, David Kleiman, in an August court filing. “There was no market for the life insurance policies and the insureds continued to live. Nevertheless, even after the bank was aware of the problems with the Life Legacy program, it continued to loan the church money it could never repay.”

On Tuesday, the school asked the court to order mediation between itself; the church, 2625 Lindberg Road; and the bank.

The church agreed to the mediation, saying it was “interested in fully and finally resolving the borrower-lender relationship with the bank,” according to its response, filed Wednesday in U.S. Bankruptcy Court for the Southern District of Indiana.

The bank opposed the mediation, because “settlement has been fully explored.”

U.S. Bankruptcy Judge Frank Otte delayed making a decision after hearing both sides’ testimony in November, saying he didn’t know if he had the power to allow a change to the conditions of the loan, or to allow the church to pay back only a portion of its outstanding debt.

“I usually know what I’m going to do pretty quick, whether right or wrong,” Otte said during the November hearing, before adding that he was taking the matter under advisement. “I’m not sure what I’m going to do.”

Find Baylee Pulliam on Facebook and @BayleeNPulliam on Twitter, or call 648-4250.

1
Text Only
Local News
  • NWS - HB0801 - Colts night practice - 019.jpg Colts night practice offers unique experience

    It might have technically still been July, but it was looking more and more like football season. And if Thursday night's Indianapolis Colts training camp practice was any indication, the fans are ready.

    July 31, 2014 2 Photos

  • Two possible dam sites named The search for a possible site for a dam for the proposed Mounds Lake reservoir has been narrowed down to two locations in the Irondale neighborhood on the city's east side.

    July 31, 2014

  • Police arrest Elwood man on rape, incest charges

    An Elwood man has been arrested on charges involving rape and incest.

    July 31, 2014

  • Police investigate hit-and-run on bicyclist Police are investigating an apparent hit-and-run on a bicyclist this morning.

    July 31, 2014

  • news_teenpilot.jpg Teen pilot who died seeking record laid to rest

    A central Indiana teenager who died when his plane crashed in the Pacific Ocean during an around-the-world flight was laid to rest Thursday following a funeral service where he was remembered as a witty young man whose ambitious journey inspired others to pursue their dreams.

    August 1, 2014 1 Photo

  • Local Briefs: Aug. 1

    News items of local and state interest as published in the Friday edition of The Herald Bulletin.

    August 1, 2014

  • Arrest Log: Aug. 1

    Arrests made by Madison County law enforcement on Wednesday and Thursday, based on Madison County Jail records.

    August 1, 2014

  • Photos needed for Anderson history book The Herald Bulletin is seeking photos of people, places and events from Anderson's past for the coffee-table book, "Anderson: 150 Years of Progress, 1865-2015."

    August 1, 2014

  • APD investigating infant death The death of an Ohio infant, which is being investigated by Anderson police, was called "unusual" Thursday.

    August 1, 2014

  • NWS-HB0801-Liberty Christian-SH 1 Liberty Christian excited for new school year Both campuses of Liberty Christian School were vibrating with excitement Thursday ahead of today's opening of school.

    July 31, 2014 1 Photo

July Staff Photos


Buy and browse more photos from The Herald Bulletin

More Resources from The Herald Bulletin
Auto Industry Book
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Facebook