INDIANAPOLIS – A federal judge has agreed to close a case involving almost $85 million in investment fraud and the Church of God.
On Monday, U.S. District Court Southern District of Indiana Judge David Hamilton approved the final terms of the case and granted permission for properties causing a financial drain on Church of God assets to be abandoned.
Pending any objections and upon completion of the final terms, the case will be closed sometime in September or October.
Unsecured creditors will receive almost 70 cents on every dollar of their investment after repayment, said Terence Banich, an attorney representing the officials overseeing the repayment to investors.
That means someone who invested $100,000 could receive about $70,000 back from their original investment.
According to court documents, Church Extension of the Church of God repaid unsecured noteholders more than $57 million from 2003 to 2009.
Barry Bentley, asset restoration receiver for Church Extension of the Church of God, said the money was paid in 23 different installments to about 3,000 creditors.
A final installment to noteholders of approximately $750,000 has been approved by the court before the case is closed. Any unclaimed funds owed to investors will be turned over to the Indiana Attorney General's Office as unclaimed property.
In the end, records show more than $73 million was recovered after the liquidation of church assets and other funding including $2 million in private contributions. Expenditures, however, including $10 million for professional fees associated with the case reduced the overall repayment of funds to creditors.
Hamilton said, in reviewing his case notes, he felt those involved in the selling of investment notes made several bad and even foolish decisions that were followed by a cover-up. He said the poor judgments resulted in a gap between the assets and liabilities.
“It’s more of the same old cliché, if you find yourself in a hole, stop digging,” he said.