PTL Attorneys Say Former Board Members Are Liable for Debt
COLUMBIA, S.C. (AP) _ PTL attorneys say former board members, including actor Efrem Zimbalist Jr., are liable for the $50 million-plus damages suffered by Jim Bakker’s former television empire.
The board members ″failed to inquire, much less make diligent inquiry″ into the business affairs of Bakker’s PTL television ministry, the attorneys said in papers filed Wednesday in U.S. Bankruptcy Court without public announcement.
As a result of that ″wrongful misconduct,″ conditions existed that caused the Internal Revenue Service to revoke the ministry’s tax-exempt status and claim back taxes of more than $50 million, the papers allege.
PTL attorneys are asking the court to force a Pittsburgh insurance company to make good on its $10 million policy that covered the board members in the event of legal action against the ministry.
National Union Fire Insurance Company is refusing to pay, claiming that Bakker made a fraudulent misrepresentation when he took out the policy in 1984.
Bakker stated at the time that he knew of no pending legal action against him or PTL. The insurance company said Bakker knew or should have known that Jessica Hahn was claiming damages from the minister because of his sexual liaison with her in 1980.
That incident led to Bakker’s resignation from PTL in March 1987. He is serving a 45-year sentence for defrauding his ministry’s supporters out of millions of dollars.
Zimbalist, who starred in ″The FBI″ television series from 1965 to 1974, was on the PTL board from 1981 to 1986 and testified at Bakker’s trial in September that the board was a sham.
″It was called a board of directors, but ... I never assumed I was responsible for anything because I wasn’t,″ he testified. ″It wasn’t that kind of board.″
Besides Zimbalist, other former PTL board members named in the action are Charles Cookman, North Carolina district superintendent of the Assemblies of God; Aimee Cortese, a New York minister; A.T. Lawing Jr., a retired Charlotte, N.C., businessman; the Rev. Don George, a Texas minister; Evelyn Carter Spencer, a California minister; and Ernest Franzone, a retired Florida businessman.
The claim filed in bankruptcy court said the board members failed to see that officers and directors were properly supervised, failed to prevent depletion of corporate assets and allowed a situation to exist in which officers and directors were self-dealing with corporate assets.