PTL Creditors Meet For First Time, Briefd on Bankruptcy Law
COLUMBIA, S.C. (AP) _ A committee representing PTL’s unsecured creditors met for the first time Thursday and learned it has the right to examine current or former ministry executives under oath and seek an examiner to look for possible fraud.
The Fort Mill-based ministry is $72 million in debt and has filed for reorganization under Chapter 11 of the federal bankruptcy laws to seek protection from 1,400 creditors. Court records show only $41 million of the debt is owed to secured creditors - those holding collateral.
As the committee of unsecured creditors met in private, PTL Chairman Jerry Falwell told viewers of the ″PTL Club″ television program that he hopes ″by Labor Day ... we’ll be out of the soup. At least we’ll have gotten this thing where more money is going in than is coming out. That’s a necessity.″ In Gatlinburg, Tenn., ousted PTL leader Jim Bakker said he has nothing to fear from a reported grand jury investigation of his taxes ″unless Jerry Falwell and the group has altered the records.″
″I pray to God they haven’t played tricks,″ Bakker said in the interview broadcast Thursday on ABC’s ″Good Morning America.″
Gerry Hindy of Pittsburgh, one of two co-chairmen elected by the seven- member creditors’ committee, said one of the group’s goals was to keep PTL ″as much intact as possible.″ Hindy is a vice president of Hamilton Excavating and Development Inc. of Lancaster, Pa.
A meeting of all unsecured creditors is tentatively scheduled for July 22 in Columbia, but the exact date, time and location are awaiting formal approval by the presiding bankruptcy judge, Rufus W. Reynolds of Greensboro, N.C.
The creditor committee’s other co-chairman, real estate developer Haines A. Maxwell of Charlotte, N.C., said he was optimistic that PTL officials will offer a reorganization proposal acceptable to the creditors.
The committee spent most of its time being briefed on bankruptcy court proceedings and its role, Hindy said. The panel plans future closed meetings and will select a lawyer to represent the creditors.
Asked about the powers given to creditors under bankruptcy law, including quizzing officials under oath and asking for an examiner to look for possible fraud, Hindy said, ″I think those are questions that we are going to be addressing with our consel.″
On Wednesday, W. Ryan Hovis, an attorney representing the Bakkers, asked Reynolds to name an impartial examiner to oversee the bankruptcy proceedings. The judge scheduled a hearing July 15 on Hovis’ motion, which also effectively adds the Bakkers as creditors.
Falwell took over PTL on March 19 after Bakker admitted to a sexual liaison with a church secretary in 1980. Bakker is trying to regain the ministry or start a new one, saying Falwell and his supporters wrongly took control of the ministry.
Earlier this week, a Justice Department source who spoke on condition of anonymity said a federal grand jury would be impaneled in Columbia to hear allegations of income tax fraud, wire fraud and mail fraud against the PTL ministry under Bakker.
In the ″Good Morning America″ interview, Bakker said his attorney, Melvin Belli, has not confirmed the report of a grand jury investigation.
″If there is, we hope that ... that investigation will be extended to take in the illegal takeover of PTL, the con game that was used to deceive us and to steal PTL from us,″ said Bakker.
Falwell, on the ″PTL Club″ program, said he wished the federal agents would forget about the past. ″We can’t change it,″ he said. ″I don’t want to see anybody in trouble with the law.″