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Ariz. Baptists discuss responses to foundation’s bankruptcy crisis


FLAGSTAFF, Ariz. (BP)–The 71st annual session of the Arizona Southern Baptist Convention opened with word of the Baptist Foundation of Arizona’s filing of a Chapter 11 bankruptcy petition and concluded with an offering for those left destitute by the crisis. In between, the convention highlighted “Celebrate Jesus 2000: Caring for the Valley of the Sun” and conducted the normal business of a state convention in annual session.
Bill Agee, coordinator for “Celebrate Jesus 2000: Caring for the Valley of the Sun,” said the North American Mission Board’s strategic focus cities effort focusing on Phoenix next year will require the involvement of everyone. Plans call for 17,000 volunteers, half of whom will be Arizonans and half of whom will come from out of state.
In test projects already conducted as part of the “church-birthed, church-based and church-carried-out” plan, 1,200 people have made professions of faith, Agee said.
Shortly after the two-day meeting was called to order Nov. 9, state convention President Paul Kinnison announced that the Baptist Foundation of Arizona had filed with the bankruptcy court that morning a pre-negotiated plan of reorganization and petition to reorganize.
BFA’s obligations to its 13,000 investors total about $590 million, with some additional obligations to third-party lenders, according to information distributed during a BFA question-and-answer time held between sessions of the annual meeting. BFA’s assets are estimated to have a current value of $220 million to 260 million.
Under the restructuring plan agreed to by an ad hoc investors committee, investors can choose:
— a “cash out option,” under which they will receive about 20 percent of the principal and interest due to them, with a total payout cap of $40 million, or
— a “new securities option,” under which they will receive preferred and common stock in a new, for-profit company that will hold the assets of BFA, its subsidiaries and affiliates. The preferred shares are expected to have a face value of about 40-50 percent of the amount owed investors and will pay cumulative annual dividends of 6 percent, beginning after the first full year of operation and paid at the end of two years.
“We are in the midst of a storm,” said Mark Dickerson, one of three members of the BFA management committee responsible for day-to-day operations since late July.
He acknowledged the presence of anger, fear and distrust — distrust of the BFA staff and board, the legal process and the convention and its structure. “It will take time and God’s leadership and healing to resolve that,” he said.
Dickerson offered his personal apology to the employees of the foundation and to the investors, churches and others who trusted the foundation “because what happened wasn’t right, and there’s no getting around that.”
The 560 messengers — 85 more than attended last year’s meeting in Phoenix — groped for ways to help.
“We have a lot of people in this state that have been hurt financially, a lot of churches and a lot of people,” said Stephen Fusilier, pastor of Faith Horizon Baptist Church, Yuma. “We’re getting a lot of bad press as Baptists. We need to realize that we as individuals, we as a state convention and we as a national convention need to come together and see what we can do … to help those individuals that are … destitute because of what happened.”
Leonard Griffith, pastor of Vistoso Community Baptist Church, Tucson, a church in a senior-adult community, asked what had been done to ask Southern Baptists across the nation to help.
“I believe people come before protocol or proper procedures,” Griffith said. “Willie Nelson and different people came to the aid of the farmers. Maybe we ought to have an ‘Investors’ Aid’ of some type from coast to coast. Something needs to be done. We need help, and we need it now.”
One pastor asked if it would help if churches holding BFA loans sought other financing and repaid the funds. Another asked for leaders to let churches know of specific prayer requests.
Steve Bass, ASBC executive director-treasurer, reported that the Jerusalem Fund — established by the state convention to assist BFA investors unable to pay housing, utilities, food and medical expenses — had received $81,000 from 32 individuals or groups and had approved 42 grants through Oct. 31. “The need is ongoing,” Bass said, noting that with the bankruptcy filing, BFA is no longer paying interest to clients who scheduled automatic withdrawals.
Messengers approved a motion by Charles Short, pastor of First Southern Baptist Church, Bisbee, that the state convention coordinate a special offering for the Jerusalem Fund in late February and that pastors be encouraged to bring those who have been hurt the worst to the Jerusalem Fund for assistance.
When the BFA reorganization is completed, possibly in February 2000, the foundation will no longer exist. “There will be a need to emerge a completely new foundation,” Bass told the messengers in his report.
He announced plans to call a special convention session in Phoenix, May 23, 2000, to consider establishing a new charitable entity. “Rest assured,” he said,” this new entity will be more focused in the traditional areas of estate planning and development, similar to other Baptist state convention foundations.”
An advisory council comprised of the state convention agency presidents and individuals who hold trusts with BFA will develop a proposed charter and bylaws for the new entity. “We want them to have a high degree of security and optimism in the parameters of this new foundation,” Bass said.
In addition, Bass announced he has asked the state convention president to appoint a task force “to emerge a vision map strategy for our convention.” The 10-12 member task force, whose membership will be approved by the ASBC executive board’s administrative team and the state convention vice presidents, will have a two-fold task:
— to develop a convention-wide vision, with an accompanying mission statement and key priorities, and
— to propose any structural or constitutional changes needed to support the vision.
The task force will address the issue of how agency board members are elected. Currently, the Committee on Boards, which is appointed by the Committee on Committees, solicits recommendations for board members from Arizona Southern Baptists at large and from the agencies themselves.
The ASBC constitution provides that “if persons other than those suggested by the agency or commission are selected by the Committee on Boards, such decision, along with qualifications of persons(s) selected to serve, will be communicated by the Committee on Boards to the agency or commission involved. The agency or commission may, in a spirit of cooperation, request a meeting with the Committee on Boards to respond to any differences regarding persons selected.”
The task force will also address how agencies can be empowered and yet be held accountable, and it will study convention communications — how the convention tells its story, Bass said.
He said he hopes the task force can be prepared to make recommendations at next year’s annual meeting or at a special convention session shortly thereafter.
Messengers adopted a Cooperative Program budget of $3,181,130, a 5 percent increase over 1999. A motion by Bruce Coe, pastor of First Baptist Church, Chandler, to continue the 1999 budget and funding formula for 2000 in light of what he said is an anticipated decline in churches’ receipts was defeated, 133-244.
In presenting the budget, Scott Barber, chairman of the ASBC executive board’s finance committee, explained that the budgeting process involves determining “priorities among priorities.” For 2000, the committee chose to focus on leadership and families.
The budget includes an additional $50,000 for the Arizona Regional Campus of Golden Gate Baptist Theological Seminary and represents the first year of a five-year plan to increase Golden Gate’s funding by $50,000 per year. The Arizona Regional Campus is currently accredited to offer half of the master of divinity degree. It is hoped that additional funding will allow the Arizona Regional Campus to take steps enabling it to offer the full degree.
The budget also includes increased funding for Arizona Baptist Children’s Services. Funds are designated for development of the agency’s regional centers and its new adoption program.
Twenty percent of the basic budget — the same percentage as in 1999 — and 18 percent of funds received in excess of the basic budget will be sent to Southern Baptist Convention ministries in North America and internationally. In recognition of the 75th anniversary of the Cooperative Program in 2000, the finance committee will consider next year a five-year plan to increase the SBC percentage 1 percent annually, bringing the total to 25 percent.
A motion requesting ASBC agencies to publish salaries of individuals earning more than $60,000 was referred to the executive board. However, in a spirit of openness, Barber reported that the executive director-treasurer’s total compensation package (salary, housing and retirement) for 2000 would be $89,937. This is “in the middle of the pack” of compensation earned by the 41 state convention executive directors, he said.
Paul Kinnison, pastor of Grand Canyon Baptist Church in Grand Canyon Park, was elected to a second term as president. Barry Jude, pastor of Mountain View Baptist Church, Tucson, was elected first vice president, and Marvin Kehl, pastor of Palm Vista Baptist Church, Surprise, was elected second vice president. All were elected by acclamation.
In other business, messengers approved a constitutional change providing for a runoff election if no one receives more than 50 percent of the votes in a presidential election.
Resolutions called for prayer support for and participation in Celebrate Jesus 2000: Caring for the Valley of the Sun; for a commitment of prayer, promotion and participation in the Cooperative Program; and for unity as “we are entering into a new century of ministry opportunity.” Other resolutions expressed appreciation on the 40th anniversary of Arizona Baptist Children’s Services and to Grand Canyon Association and the churches of northern Arizona.
Next year’s annual meeting will be Nov. 14-15 in Phoenix.