The Herald Bulletin

Evening Update

Local News

March 20, 2013

Man’s death could reopen church bankruptcy hearing

ANDERSON, Ind. — A local man’s death could signal a new chapter in a complicated bankruptcy case where church leaders took out life insurance policies on 11 of their older members.

In 2007, Anderson’s Lindberg Road Church of Christ took out the policies to back a $2.5 million line of credit from the Fort Wayne-based Star Financial Bank to expand its child care center and remodel the school.

The plan, dubbed Life Legacy, landed the church in U.S. bankruptcy court when “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,” meaning the church couldn’t pay back the loan.

Attorneys for the bank and the church finished presenting evidence in November, but Judge Frank Otte delayed making a decision.

Now, the church wants another crack at presenting evidence, following the death of Eugene Brock last week, for whom the church had taken out a $650,000 policy.

But neither the church or the bank can collect — the policy lapsed in May 2010, when the bank failed to pay the $89,000 annual premium.

The fact the bank “carelessly and unintentionally” let that happen, a new filing from the church says, implies it “had no confidence in Life Legacy, but did not care,” and lent the money anyway.

Calls to both parties’ attorneys and the church were not immediately returned.

According to the filing, the church took out the policy when Brock was 83. When it lapsed a few years later, the bank tried to reinstate it, but was denied because of Brock’s “deteriorating condition.”

If the church had been able to collect on Brock’s policy, it would have “significantly reduced” the amount the church owed.

But Brock’s policy isn’t the only one that’s lapsed, the filing says, adding the two for Forest and Barbara Higgenbotham, worth a total of $1.4 million, were also not reinstated.

This time, the filing says, the lapse appears intentional — possibly to “impair its (the church’s) collateral” and therefore its ability to repay the loan. Those expired in May 2010 and October 2011, respectively.

There are three policies still in effect: $400,000 total for Jayne Beeler and Janet Whiteman, and $700,000 for Johnny Lollar, which has a “special ‘no lapse’ provision.

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

1
Text Only
Local News
  • NWS - HB0820 - Mounds Reservoir - JC 1 Reservoir proposal garnering support Of the approximately 400 people who visited the “Imagine Mounds Lake” display at the Mounds Mall on Tuesday, the vast majority were supportive of the project.

    August 20, 2014 2 Photos

  • Manufacturing company opens in Elwood

    More than 200 people turned out to welcome Warner Bodies to the city Wednesday morning.

    August 20, 2014

  • NWS - HB0815 - heroin bust - JM - james dixon New York suspect denies involvement in large heroin network A New York man suspected of involvement in the large heroin ring dismantled last week said he has never sold drugs in his life, though he suspected that's exactly what his brother was doing.

    August 19, 2014 1 Photo

  • Election board looking into voter fraud allegation The Madison County Election Board delayed a decision into allegations of voter fraud in the May primary until it can gather additional information. Brian Bell, who lost the Democratic Party’s nomination for sheriff by 48 votes to Scott Mellinger, raised allegations to the election board during a hearing Friday.

    August 19, 2014

  • Mother who brought gun to school pleads guilty

    A mother who admitted to bringing a gun to a meeting at her son's school in April pleaded guilty on Tuesday.

    August 19, 2014

  • NWS - HB0821 - Warner Bodies - JC 1 Manufacturing company opens doors in Elwood The relocation of a manufacturing plant to Madison County brings both revitalization and new jobs to the area.

    August 20, 2014 3 Photos

  • NWS - HB0821 - Lapel Fire Station Lapel turns dirt for new fire station After working on the details on financing for years, the Lapel Stony Creek Township Fire Territory is much closer to opening a new station after a ceremonial ground breaking Tuesday night.

    August 20, 2014 1 Photo

  • Arrest Log: Aug. 21 Arrests made by Madison County law enforcement on Tuesday and Wednesday, based on Madison County Jail records.

    August 20, 2014

  • What's Where: Aug. 20 Local meeting and events as published in the Wednesday edition of The Herald Bulletin.

    August 20, 2014

  • Local Briefs: Aug. 20 A compilation of local and state news as published in the Wednesday edition of The Herald Bulletin.

    August 20, 2014

August 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