Investors in the Baptist Foundation of Arizona could expect to receive about 40 cents on the dollar under a liquidation plan being filed today in U.S. Bankruptcy Court.
That amount could increase considerably, possibly by enough to repay the entire $590 million owed to investors, if a lawsuit against former BFA officials and their lawyers and accountants is successful.
"Obviously, our hope is that everybody will get everything back, but I can't speculate on how the lawsuit will turn out," said Jock Patton, chairman of foundation's restructuring committee, which developed the plan.
The foundation froze investors' accounts in August and filed for Chapter 11 bankruptcy protection in November. The filing listed total liabilities of $640 million, of which $590 million is owed to about 13,000 investors. The rest is owed to banks and other third-party secured creditors.
Under the liquidation plan, the foundation would sell off its assets over the next few years, returning the proceeds to investors through quarterly payments. The assets, which include real estate projects, land, golf courses and businesses, are worth about $240 million, Patton said.
Foundation officials also are filing a $300 million to $400 million lawsuit today against their former executives and such third parties as lawyers and the foundation's longtime accounting firm, Arthur Andersen.
Cathy Reese, lawyer for the committee representing investors in the bankruptcy case, called the liquidation proposal "a significant accomplishment for investors."