One of Henderson’s largest churches filed for bankruptcy protection last week after deciding to stop making mortgage payments on its main campus.
According to court documents, the Board of Directors at the Church at South Las Vegas determined that the donations received from church members would be better spent on expanding the church and other pursuits than on making payments on its existing building and land, which are significantly upside down.
The first hearing for the bankruptcy petition was scheduled to take place this morning in the Nevada District of U.S. Bankruptcy Court.
Church board members decided to stop making the monthly mortgage payment of about $52,000 in May, after an appraisal of the church’s main campus in the Seven Hills neighborhood, at 3051 W. Horizon Ridge Pkwy., placed its value at $2.4 million.
The church owes about $7.6 million, according to court documents.
“Given the vast differences between the outstanding principal balance of the note and the present value of the Seven Hills Campus and the source of funding as voluntary donations of church members, it is simply impossible for the church to continue to sustain the monthly note payments,” the church’s chief financial officer, Deborah Whittington, said in a court declaration.
Whittington said the church has taken in a monthly average of more than $356,000 in member donations during the first six months of 2011, but spends $321,000 per month on payroll and other expenses, leaving only $32,000 for the $52,000 mortgage payment.
Whittington said church officials attempted to restructure the loan with First Bank, but have been unable to do so.
First Bank filed a suit to initiate foreclosure proceedings against the church in June.
In its filings, the church reported $963,000 in the bank, but of that, almost $647,000 were member donations designated for church expansion, and the rest is committed to church operations, the day care and next year’s Easter service.
The church claims 4,000 members, with average weekly attendance of about 3,500 between the Seven Hills location and a satellite campus that operates in space leased from Foothill High School on College Drive and U.S. 95.
via Church Seeks Bankruptcy Protection