Church at South Las Vegas
A bankrupt Henderson church has settled its differences with a bank that has been trying to foreclose on its property.
The Church at South Las Vegas filed for bankruptcy July 8 to block a foreclosure threatened by First Bank of St. Louis.
The church had strategically defaulted on its mortgage after its leaders decided it was so far underwater on its loan that it made no sense to make the payments.
Church attorneys said its building at 3051 Horizon Ridge Parkway, near Seven Hills Drive, is worth just $2.375 million vs. the $7.896 million owed to the bank as of Nov. 3. The bank values the building at $3.765 million.
The congregation has also been trying to preserve cash to build a larger church.
After the bankruptcy filing, a dispute erupted over whether donations from congregants and other funds in a designated account were part of the bankruptcy estate and could be used to satisfy First Bank’s claim. This account held about $646,700 and was designated for specific purposes, including expanding church facilities.
Bankruptcy court records show the church, which has a ministry helping exploited sex workers in Las Vegas, on Nov. 29 signed a settlement with First Bank.
Most of the terms of the deal are confidential, but court records show that if they are approved by Judge Linda Riegle:
• The church will pay a confidential sum to the bank to settle all claims between the parties.
• The church will deposit into an escrow bank account $546,700 — or all but $100,000 of the $646,700 in the designated account. This escrow account will serve as “adequate protection” to protect the interests of First Bank in the settlement, court records say.
• Within 45 days the church will provide First Bank with evidence that one half of the settlement amount has been raised or pledged. If it fails to meet this 45-day milestone, or doesn’t make the settlement payment within 90 days, the escrowed funds will be released to First Bank.
“Under the proposed settlement, the majority of the designated cash will be applied to the settlement payment, which the debtor believes can be raised within the time provided in the proposed settlement,” church attorneys said in a court filing seeking approval of the settlement.
Also under the settlement, First Bank will be free to complete its foreclosure of the church’s Horizon Ridge Parkway campus, called the Seven Hills Campus.
It wasn’t disclosed in court records whether, under the settlement, First Bank actually intends to complete the foreclosure.
It also wasn’t disclosed if the church has arranged or will arrange to continue occupying the campus, should First Bank complete the foreclosure.
The church, with some 4,000 members, uses the 23,635-square-foot office building for worship services, bible study, other small group meetings, office functions and as a preschool.
Gerald Gordon of the Las Vegas law firm Gordon Silver, an attorney for the church, said he had no comment Thursday. Messages for comment were also left for church Pastor Benny Perez and an attorney for First Bank.