Charles Street African Methodist Church, a 194 year-old congregation, retained a bankruptcy attorney and filed for debt restructuring to keep the OneUnited Bank from foreclosing on their property.
OneUnited, a black-owned bank, moved to foreclosure on the historic church and put it up for auction after they were unable to make a “balloon” mortgage payment of $1.1 million.
After a meeting with 250 congregants, which outlined their options to avoid foreclosure, the Church members decided to file for Chapter 11 bankruptcy. This will give them the opportunity to restructure their loans with the bank and other creditors in order to keep their properties.
Both the AMC and OneUnited Bank have been locked in a legal battle over a previous $3.6 million construction loan given to the church to build an adjacent community center. OneUnited gave the church a loan extension if 2008, but cut off funding the next year, leaving the AMC church with no funding to complete the project.
The Charles Street Church also has other creditors related to the halted construction project and with the help of a bankruptcy lawyer they will be able to stop any collection actions from these debtors and draft an acceptable repayment plan.
Like so many businesses and individuals, the Charles Street Church was greatly affected by the financial crisis. Many companies find that their only way out of debt is to hire a bankruptcy attorney to oversee a restructuring plan that will not only satisfy creditors but allow them to return to profitability.
