The Richmond Christian Center filed Friday for Chapter 11. (Photo by Burl Rolett)
A bankrupt Southside church is being pushed closer to liquidation as its lender questions a real estate deal between the house of worship and its pastor’s son.
The Richmond Christian Center’s main creditor is looking to sue a company operated by the son of church pastor Stephen Parson Sr. The lender, Foundation Capital Resources, wants to reclaim for the church a 2.6-acre tract of land sold to Stephen Parson Jr. allegedly by mistake and that he is now trying to sell for $1 million.
Foundation Capital also argued last month in federal bankruptcy court that the Cowardin Street church has not progressed in its plan of liquidating its real estate holdings to pay down debts, despite receiving a written offer for $1.8 million on its main church property.
Owed about $2 million, the lender has asked that a trustee be appointed to potentially sell off the church’s assets. Those assets include the 77,000-square-foot Cowardin Avenue church building, the city block it sits on, a few smaller buildings fronting 19th Street and a cluster of small Southside properties.
But the land in question in a court filing by the lender late last month is a 17-parcel, 2.6-acre tract stretching north from Perry Street toward Semmes Avenue. SP Five Properties, the entity owned by Stephen Parson Jr., bought the parcels from the church in 2011 for $180,000. The properties were assessed at more than $1 million at the time. These properties do not include the main church building, which is still owned by the Chrisitian Center.
Richmond Christian Center claims it intended to sell only one parcel to Parson Jr., the court filings state. Now the lender wants the properties brought back into the bankruptcy estate.
“It was an error as a part of that real estate closing a couple of years ago,” said attorney Kevin Funk of DurretteCrump, who represents the Christian Center. “We want to work with the estate and maximize any money for the estate, and we would work with the lender to recover that property.”
When confronted about the alleged erroneous sale, Parson Jr. allegedly told the Christian Center “too bad, you should have read the deed,” Foundation Capital said in its filings late last month. The church has not pushed to reclaim the land because Parson Sr. does not want to sue his son, Foundation Capital also contended in its filings.
Foundation Capital further claims the 2.6 acres have since been listed for sale at $1 million. The lender says it will not be likely to regain any equity off the land if a sale is completed.
Paul Campsen, a Kaufman & Canoles attorney representing Foundation Capital, did not return a phone message seeking comment.
Foundation Capital’s April 25th request is the latest twist in a nearly eight-month back-and-forth between lender and borrower. The Mississippi REIT, which specializes in financing churches, has twice attempted to foreclose on Richmond Christian Center’s main church property only to be twice thwarted by last-minute bankruptcy filings.
The church defaulted on a $4.4 million loan from Foundation Capital last year.
Parson Sr. directed questions about the SP Five Properties land to Funk but said in an interview last week that his son is not involved in the operations of the Christian Center.
The elder Parson also said the church intends to sell off its Southside property to cover its debts and plans to build a new house of worship elsewhere.
The main building, a former car dealership, is potentially prime real estate sitting just across Cowardin Avenue from the fast-rising Manchester neighborhood.
“The bottom line is this: We’re selling our property and we have buyers that are interested in the property,” Parson Sr. said. “We just basically have to get the right price.”
The church has retained Midlothian-based Real Estate Brokers Inc. to list the property. The asking price is $5 million.
Parson Sr. said news of the attempted foreclosures has driven down offers from potential buyers. The entire portfolio is assessed at about $4 million.
On Thursday, Parson Sr. attributed the church’s default to a refinancing agreement that went sour.
He said the church was working a deal with Foundation Capital to refinance for a lower payment in 2012. Around that time, the church sold a shopping center it owned in Chesterfield County. That sale brought in $3.1 million, according to county records, which Parson intended to use to seal the refinancing deal.
Parson Sr. said the church began making the lower payments but that the lender refused to finalize the refinance deal for more than a year.
“The purpose to sell that (Chesterfield) property was to refinance and reduce the payment,” Parson Sr. said. “For a year and a half – a year and a half – we were making payments of what the new payments were going to be, but they were dragging their feet as it pertains to the paperwork.”
The refinance deal came apart last year, Parson Sr. said, and that’s when Foundation Capital began looking to foreclose.
“We were stuck with a two-week notice that they are going to foreclose, so we didn’t have any choice but to enter the bankruptcy,” he said.
Foundation Capital has asked a judge to appoint a Chapter 11 trustee to step in and handle the bankruptcy.
Roy Terry, a Sands Anderson bankruptcy lawyer, said a Chapter 11 trustee would take over the day-to-day operations at the Christian Center and could begin liquidating assets.
Terry said a conversion to Chapter 7 bankruptcy case could also be likely, a move that could enhance the liquidation of assets.
Foundation Capital has put its trustee request on hold for 60 days, however. Funk said the church’s agreement to help its creditor push to reclaim the SP Properties’ land helped assuage fears that it would not be able to reclaim its debts without bringing in a trustee.
For the church building itself, Funk says there are suitors but no firm deal.
“We’re getting a lot of nibbles. I think people are feeling it out,” he said. “They want to know who else is potentially interested, but we are getting a lot of interest.”
The Richmond Christian Center filed Friday for Chapter 11. (Photo by Burl Rolett)
A bankrupt Southside church is being pushed closer to liquidation as its lender questions a real estate deal between the house of worship and its pastor’s son.
The Richmond Christian Center’s main creditor is looking to sue a company operated by the son of church pastor Stephen Parson Sr. The lender, Foundation Capital Resources, wants to reclaim for the church a 2.6-acre tract of land sold to Stephen Parson Jr. allegedly by mistake and that he is now trying to sell for $1 million.
Foundation Capital also argued last month in federal bankruptcy court that the Cowardin Street church has not progressed in its plan of liquidating its real estate holdings to pay down debts, despite receiving a written offer for $1.8 million on its main church property.
Owed about $2 million, the lender has asked that a trustee be appointed to potentially sell off the church’s assets. Those assets include the 77,000-square-foot Cowardin Avenue church building, the city block it sits on, a few smaller buildings fronting 19th Street and a cluster of small Southside properties.
But the land in question in a court filing by the lender late last month is a 17-parcel, 2.6-acre tract stretching north from Perry Street toward Semmes Avenue. SP Five Properties, the entity owned by Stephen Parson Jr., bought the parcels from the church in 2011 for $180,000. The properties were assessed at more than $1 million at the time. These properties do not include the main church building, which is still owned by the Chrisitian Center.
Richmond Christian Center claims it intended to sell only one parcel to Parson Jr., the court filings state. Now the lender wants the properties brought back into the bankruptcy estate.
“It was an error as a part of that real estate closing a couple of years ago,” said attorney Kevin Funk of DurretteCrump, who represents the Christian Center. “We want to work with the estate and maximize any money for the estate, and we would work with the lender to recover that property.”
When confronted about the alleged erroneous sale, Parson Jr. allegedly told the Christian Center “too bad, you should have read the deed,” Foundation Capital said in its filings late last month. The church has not pushed to reclaim the land because Parson Sr. does not want to sue his son, Foundation Capital also contended in its filings.
Foundation Capital further claims the 2.6 acres have since been listed for sale at $1 million. The lender says it will not be likely to regain any equity off the land if a sale is completed.
Paul Campsen, a Kaufman & Canoles attorney representing Foundation Capital, did not return a phone message seeking comment.
Foundation Capital’s April 25th request is the latest twist in a nearly eight-month back-and-forth between lender and borrower. The Mississippi REIT, which specializes in financing churches, has twice attempted to foreclose on Richmond Christian Center’s main church property only to be twice thwarted by last-minute bankruptcy filings.
The church defaulted on a $4.4 million loan from Foundation Capital last year.
Parson Sr. directed questions about the SP Five Properties land to Funk but said in an interview last week that his son is not involved in the operations of the Christian Center.
The elder Parson also said the church intends to sell off its Southside property to cover its debts and plans to build a new house of worship elsewhere.
The main building, a former car dealership, is potentially prime real estate sitting just across Cowardin Avenue from the fast-rising Manchester neighborhood.
“The bottom line is this: We’re selling our property and we have buyers that are interested in the property,” Parson Sr. said. “We just basically have to get the right price.”
The church has retained Midlothian-based Real Estate Brokers Inc. to list the property. The asking price is $5 million.
Parson Sr. said news of the attempted foreclosures has driven down offers from potential buyers. The entire portfolio is assessed at about $4 million.
On Thursday, Parson Sr. attributed the church’s default to a refinancing agreement that went sour.
He said the church was working a deal with Foundation Capital to refinance for a lower payment in 2012. Around that time, the church sold a shopping center it owned in Chesterfield County. That sale brought in $3.1 million, according to county records, which Parson intended to use to seal the refinancing deal.
Parson Sr. said the church began making the lower payments but that the lender refused to finalize the refinance deal for more than a year.
“The purpose to sell that (Chesterfield) property was to refinance and reduce the payment,” Parson Sr. said. “For a year and a half – a year and a half – we were making payments of what the new payments were going to be, but they were dragging their feet as it pertains to the paperwork.”
The refinance deal came apart last year, Parson Sr. said, and that’s when Foundation Capital began looking to foreclose.
“We were stuck with a two-week notice that they are going to foreclose, so we didn’t have any choice but to enter the bankruptcy,” he said.
Foundation Capital has asked a judge to appoint a Chapter 11 trustee to step in and handle the bankruptcy.
Roy Terry, a Sands Anderson bankruptcy lawyer, said a Chapter 11 trustee would take over the day-to-day operations at the Christian Center and could begin liquidating assets.
Terry said a conversion to Chapter 7 bankruptcy case could also be likely, a move that could enhance the liquidation of assets.
Foundation Capital has put its trustee request on hold for 60 days, however. Funk said the church’s agreement to help its creditor push to reclaim the SP Properties’ land helped assuage fears that it would not be able to reclaim its debts without bringing in a trustee.
For the church building itself, Funk says there are suitors but no firm deal.
“We’re getting a lot of nibbles. I think people are feeling it out,” he said. “They want to know who else is potentially interested, but we are getting a lot of interest.”
A good story to be included in a Real Estate 101 course and a lesson for us all.