The bankrupt Richmond Christian Center including disputed land in the foreground. (Photo by Burl Rolett.)
The son of a Richmond pastor will have to hold off on spending the spoils of a lucrative property flip until a dispute over land near Manchester is settled in federal bankruptcy court.
A federal judge Wednesday issued an injunction barring Stephen Parson Jr. from disposing of more than $370,000 worth of proceeds from his recent sale of 17 Cowardin Avenue parcels that were previously owned by the Richmond Christian Center. The money must stay put until a September trial when a creditor of the church, where Parson’s father is a pastor, will try to take it back to help pay down a $2 million debt.
The land in question is a 2.6-acre tract across Perry Street from the bankrupt Richmond Christian Center’s 77,000-square-foot, Cowardin Avenue-fronting church. Parson bought the acreage for $180,000 in 2011 from the Richmond Christian Center. At the time, Parson Jr. was both a trustee for the church and the owner of SP Five Properties, the LLC that bought the land.
The land was assessed at more than $1 million when Parson Jr. bought it, meaning he paid about 17 percent of the tax assessed value. The Richmond Christian Center claims the transfer was a mistake and that the church intended to sell only one of the 17 properties to Parson.
“We were not aware that that transfer, at the time, was including 17 parcels,” Pastor Stephen Parson Sr. said in court Wednesday. “We intended to transfer the property our son had renovated, had paid the back taxes on and was leasing with the intent to purchase.”
Parson Jr., through his LLC, sold all 17 of the parcels for $850,000 to an entity operated by Virginia Beach-based Mini Price Storage.
The sale came shortly after the Richmond Christian Center agreed to allow its lender, Foundation Capital Resources, to bring suit against SP Five Properties in an attempt to get the real estate back.
Foundation Capital argued at a Wednesday hearing that the timing of the sale was suspect. Presiding Judge Keith L. Phillips also questioned it.
“The timing suggests that Mr. Parson (Jr.) reacted to this impending suit by transferring the property as soon as he could to someone else,” Phillips said.
Leonard Starr, an attorney representing Parson Jr., said about $370,000 from the 17-parcel sale remained in proceeds, and the money was sitting in an account jointly owned by Parson Jr. and his wife.
The 17 parcels are important, Foundation Capital argues, because the Christian Center needs to sell them to help pay down about $2 million it owes on a loan issued in 2005 by the Mississippi-based lender.
The note is backed by its main church building at 214 Cowardin Ave. on the block bounded by Cowardin Avenue and Perry, West 19th and Wall streets. The lender has twice attempted to foreclose on the property, and the Christian Center has twice blocked those attempts with Chapter 11 bankruptcy filings.
Kristy Cosley, a real estate broker with Jones Realty, testified Wednesday that she has a client that submitted an offer to buy the main church property for $2 million.
After deducting commissions and other fees, Cosley estimated the sale would leave $1.8 million in proceeds for the church to pay down its debt – an amount $200,000 shy of what it owes Foundation Capital. The lender wants to reclaim the land Parson Jr. sold in hopes the Christian Center can sell it to make up the difference.
Wednesday’s hearing was part of a suit the lender filed against SP Five on behalf of the Christian Center to reclaim the properties. In that suit, the lender is attempting to reclaim for the church either the land SP Five Properties sold or the assessed value of the property, an amount in excess of $1.2 million.
The Christian Center would not bring the suit against SP Properties on its own, according to court filings, because Parson Sr. did not want to sue his son. The Richmond Center agreed to an order allowing Foundation Capital to go after SP Five Properties on the church’s behalf after the lender threatened to push the church closer to liquidation by asking for the appointment of a bankruptcy trustee.
The Christian Center is represented in the case by DurretteCrump attorney Kevin Funk.
During a Thursday phone interview, Foundation Capital’s attorney Paul Campsen of Kaufman & Canoles said the Christian Center has not been cooperative in recovering the properties. He said the lender may again push for the appointment of a Chapter 11 trustee.
In court Wednesday, Campsen said Parson Sr. offered Foundation Capital some sort of settlement, the full terms of which were not revealed, if the lender would give up the push to reclaim the SP Five assets.
Campsen characterized the move as Parson Sr. saying to the lender “we’ll throw you a bone if you’ll let my son go.”
“It doesn’t smell right,” Campsen added.
The bankrupt Richmond Christian Center including disputed land in the foreground. (Photo by Burl Rolett.)
The son of a Richmond pastor will have to hold off on spending the spoils of a lucrative property flip until a dispute over land near Manchester is settled in federal bankruptcy court.
A federal judge Wednesday issued an injunction barring Stephen Parson Jr. from disposing of more than $370,000 worth of proceeds from his recent sale of 17 Cowardin Avenue parcels that were previously owned by the Richmond Christian Center. The money must stay put until a September trial when a creditor of the church, where Parson’s father is a pastor, will try to take it back to help pay down a $2 million debt.
The land in question is a 2.6-acre tract across Perry Street from the bankrupt Richmond Christian Center’s 77,000-square-foot, Cowardin Avenue-fronting church. Parson bought the acreage for $180,000 in 2011 from the Richmond Christian Center. At the time, Parson Jr. was both a trustee for the church and the owner of SP Five Properties, the LLC that bought the land.
The land was assessed at more than $1 million when Parson Jr. bought it, meaning he paid about 17 percent of the tax assessed value. The Richmond Christian Center claims the transfer was a mistake and that the church intended to sell only one of the 17 properties to Parson.
“We were not aware that that transfer, at the time, was including 17 parcels,” Pastor Stephen Parson Sr. said in court Wednesday. “We intended to transfer the property our son had renovated, had paid the back taxes on and was leasing with the intent to purchase.”
Parson Jr., through his LLC, sold all 17 of the parcels for $850,000 to an entity operated by Virginia Beach-based Mini Price Storage.
The sale came shortly after the Richmond Christian Center agreed to allow its lender, Foundation Capital Resources, to bring suit against SP Five Properties in an attempt to get the real estate back.
Foundation Capital argued at a Wednesday hearing that the timing of the sale was suspect. Presiding Judge Keith L. Phillips also questioned it.
“The timing suggests that Mr. Parson (Jr.) reacted to this impending suit by transferring the property as soon as he could to someone else,” Phillips said.
Leonard Starr, an attorney representing Parson Jr., said about $370,000 from the 17-parcel sale remained in proceeds, and the money was sitting in an account jointly owned by Parson Jr. and his wife.
The 17 parcels are important, Foundation Capital argues, because the Christian Center needs to sell them to help pay down about $2 million it owes on a loan issued in 2005 by the Mississippi-based lender.
The note is backed by its main church building at 214 Cowardin Ave. on the block bounded by Cowardin Avenue and Perry, West 19th and Wall streets. The lender has twice attempted to foreclose on the property, and the Christian Center has twice blocked those attempts with Chapter 11 bankruptcy filings.
Kristy Cosley, a real estate broker with Jones Realty, testified Wednesday that she has a client that submitted an offer to buy the main church property for $2 million.
After deducting commissions and other fees, Cosley estimated the sale would leave $1.8 million in proceeds for the church to pay down its debt – an amount $200,000 shy of what it owes Foundation Capital. The lender wants to reclaim the land Parson Jr. sold in hopes the Christian Center can sell it to make up the difference.
Wednesday’s hearing was part of a suit the lender filed against SP Five on behalf of the Christian Center to reclaim the properties. In that suit, the lender is attempting to reclaim for the church either the land SP Five Properties sold or the assessed value of the property, an amount in excess of $1.2 million.
The Christian Center would not bring the suit against SP Properties on its own, according to court filings, because Parson Sr. did not want to sue his son. The Richmond Center agreed to an order allowing Foundation Capital to go after SP Five Properties on the church’s behalf after the lender threatened to push the church closer to liquidation by asking for the appointment of a bankruptcy trustee.
The Christian Center is represented in the case by DurretteCrump attorney Kevin Funk.
During a Thursday phone interview, Foundation Capital’s attorney Paul Campsen of Kaufman & Canoles said the Christian Center has not been cooperative in recovering the properties. He said the lender may again push for the appointment of a Chapter 11 trustee.
In court Wednesday, Campsen said Parson Sr. offered Foundation Capital some sort of settlement, the full terms of which were not revealed, if the lender would give up the push to reclaim the SP Five assets.
Campsen characterized the move as Parson Sr. saying to the lender “we’ll throw you a bone if you’ll let my son go.”
“It doesn’t smell right,” Campsen added.