JEFFERSON CITY, Mo. (BP)–A circuit court judge gave the Missouri Baptist Convention a major procedural victory Dec. 15 when he certified the MBC executive board and seven of its members as proper plaintiffs in the action to recover five breakaway entities of the convention.
The ruling by Cole County Circuit Court Judge Tom Brown came after more than three years of legal wrangling by the entities’ lawyers over who has the right to take legal action in behalf of the Missouri convention.
At various points in the case it has been argued that churches, messengers to the MBC annual meeting or the MBC executive board -– or various combinations of the three — have the right to represent the MBC, an unincorporated association. The judge indicated that the process should now quickly proceed to the merits of the case, whether the entities’ corporate charters give the convention the legal right to elect trustees and whether the entities’ trustees violated Missouri corporate law by amending their charters to become self-perpetuating, without MBC approval.
“Judge Brown said the court of appeals wants this case to get past procedural squabbles and get to the merits quickly,” MBC attorney Michael Whitehead said. “We’re back on track to do that. We’ll finish discovery, argue some motions and have a trial scheduling conference within six months.”
The ruling came on the same day MBC attorneys filed a motion for a temporary restraining order and injunction against the Windermere Baptist Conference Center’s board of trustees to prevent further “transferring or encumbering of real estate or timber.” Brown discussed the matter in chambers with counsel and set a hearing on the matter for Dec. 19 at 11 a.m.
“When we told the judge about the emergency need to protect the Windermere property, he seemed to appreciate the urgency and he gave us a prompt hearing date,” Whitehead said. “We are hopeful that he will stop all sales of land, all mortgaging of assets and all timber removal operations, until this case is over.”
The motion for injunction was prompted by a series of discoveries by MBC officials in recent days:
— Windermere’s Internal Revenue Service (IRS) Form 990 for 2004 showed that it had an operating loss of $2.1 million and total debt of $21 million.
— The Word & Way, the former state newspaper that is one of the breakaway entities, reported on Dec. 1 that Windermere’s former president, Frank Shock, abruptly stepped down from chief executive officer duties on Nov. 17.
— In the same story, Windermere chairman Arthur Mallory denied that the sale of any Windermere land was being actively considered. Less than 24 hours later, he said just the opposite, explaining that some land would be sold to private developers. Windermere spans 1,300 acres of shorefront property at the Lake of the Ozarks in central Missouri.
— Word & Way reported on Dec. 2 that Windermere trustees had refinanced and reduced the $21 million debt to $14 million, but with a new line of credit for $30 million, and that a bond sale was planned.
— Public records in Camden County, Mo., contained a “special warranty deed” to National City Bank, the former lender on the $21 million, conveying hundreds of acres of Windermere land, dated Nov. 11, 2005.
— Trees were being cut by commercial logging operations near the Windermere entrance off of State Road AA.
Upon learning of the bond sale, MBC Executive Director David Clippard dispatched a letter to every pastor, director of missions, Woman’s Missionary Union leader and deacon chairman in MBC churches, as well as to state Baptist convention executive directors and leaders of the Southern Baptist Convention, informing them about the bond sale.
“Investors should be aware that the MBC legal action in Cole County Circuit Court asks the judge to declare that the breakaway [Windermere] board has no legal authority to mortgage land or to sell bonds,” Clippard stated in his Dec. 14 letter. “The MBC is seeking to recover ownership or control of the Windermere real estate. MBC will ask the court to cancel any debts, mortgages or bond obligations incurred by the breakaway board. Hence, individual bond investors could lose their money. It would seem prudent under the circumstances to wait for the outcome of the MBC litigation before deciding to invest in Windermere bonds.”
Windermere is one of five entities in which trustees opposing the conservative direction of the Missouri convention amended their charters to make their boards self-perpetuating and no longer accountable to Missouri Baptists. That prompted the MBC to file suit to reverse the trustee actions and to regain control of the entities that, in addition to Windermere and Word & Way, include The Baptist Home retirement facility, Missouri Baptist College and the Missouri Baptist Foundation.
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