By Traci Moyer
The Herald Bulletin
---- — 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.
Thanks in part to support from the church’s congregation and new interest rates, Madison Park Church of God is moving forward, Spaulding said.
“We certainly held our own and have been very stable through all of this,” he said. “But this really gives us a very stable platform for us to move forward. We were very blessed.”
Church officials say plans to sell about 100 acres surrounding the property have not changed.
Spaulding said a senior housing group will be developing about 16 acres in the near future and eventually the church would like to see new retail outlets in the area.
Spaulding will continue to submit reports to the U.S. Bankruptcy Court in Indianapolis, which is monitoring transactions for the next few months, but the legal proceedings are over, he said.
“That’s a big hurdle to get over,” Whitmoyer said.
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More information The Madison Park Church is affiliated with the Church of God movement. The Church of God is headquartered in Anderson and was established here in the early 1800s. In 1917, the Church of God established Anderson College. Today, the organization has an international scope. Source: www.madisonparkchurch.org and Madison County Indiana Chamber of Commerce