Despite filing bankruptcy, the Baptist Foundation of Arizona has continued
to spend millions of dollars on salaries, professional fees and administrative
costs, a newspaper reports.
Despite filing bankruptcy, the Baptist Foundation of Arizona has continued
to spend millions of dollars on salaries, professional fees and administrative
costs, a newspaper reports.
The payments include some $600,000 to a firm co-owned by the
foundations chief executive officer at the time.
The Arizona Republic reports expenditures have continued even
as investors look to receive only a portion of their investments as a result
of bankruptcy.
Many of those investors are Baptists and put life savings into
the foundation. Now, they stand to lose more than half.
The foundation came under fire in 1999 for allegedly engaging
in a complex financial scheme in which it was forced to use new investments
to pay old debts. State investigators forced the agency to cease selling investment
plans, charging it was overestimating its performance in order to encourage
persons to invest more money.
Observers suggest 13,000 or so investors are owed upward to
$600 million from the Baptist foundation. They are expected to receive 31 percent
to 44 percent of their funds – and lose the rest, the Arizona Republic
newspaper article reports.
Foundation attorney Mark Dickerson declined to comment on the
expenses, saying agency officials were too busy to provide details, Craig Harris
said in his article.
It is not unusual for a large bankruptcy case to generate high
fees for attorneys and accountants, the newspaper reports. However, some observers
suggest the reported payments are high since the foundation is not trying to
survive but to liquidate itself in the next few years and then cease to exist.
Documentation of the expenditures comes from monthly reports
the foundation is required to file in court. For the year 2000, those submitted
records show:
Since filing for bankruptcy in late 1999, the foundation
has paid at least $5 million in salaries, $9.8 million in administrative costs,
and $12.8 in professional fees – despite cutting its staff from 150 to
60 or less.
Whitestone Financial Group billed the foundation $615,888
for consulting work at the time Whitestones co-owner, Joe Panter, was
the foundations chief executive officer. Panter stepped down from that
post last month. He was replaced as chief executive officer by Mark Roberts.
Roberts is a former board member and is drawing an annual salary of $240,000
– plus $225 an hour for overtime – in the post.
Administrative costs exceeded $1 million each in October
and November. The least spent was $261,102 last February.
Meanwhile, last month, investors received a first disbursement
check, totaling about 3.5 percent of what they have lost. Another check is expected
this spring.
On a related note, legal proceedings continue – against
the foundations former accountant, officials and board members.