...[Council member Katie Sherrod] said that her "deeper concern" is a "growing sense" that "some bishops are dangerously close to saying to the clergy and deputies, 'We have no need of you.'"
Jefferts Schori said that she was not aware of bishops who want to do away with the House of Deputies, adding that she was "sorry to hear that."
She said she was trying to point to the tension between bishops "who ideally in vocation are called to care for the whole and deputies who are elected by individual dioceses who represent the interests of those dioceses." When a murmuring of "no" arose, the presiding bishop said "just a minute, let me finish," explaining that she meant that dioceses elect deputies from out of the context of the diocese's stance on the issues facing the church.
"I'm not impugning the understanding of individual deputies that they are called to serve the whole church," she said. "What I am simply saying is that deputies in their election are called by particular dioceses. That's not a perfect distinction, but generally it's a tension and I hope I was careful to say that I don't think we should resolve that tension.
1. Archer_of_the_Forest wrote:
This is truly incoherent ecclesiology.
October 26, 12:58 pm | [comment link]
2. A Senior Priest wrote:
This is the most interesting part: borrowing $60 mil to refi $46 mil of which $37 mil is a debt incurred on their ‘renovation’ of 815 plus $10 mil on a ‘potential’ site for the TEC archives. The remaining $13 mil is to provide liquidity, since evidently they are having a hidden cash crisis. It seems that TEC has not paid more than $500,000 on the principle of the $37 million since 2007. To get the loans they are MORTGAGING 815 AND SECURING THE REST WITH UNRESTRICTED ENDOWMENT ASSETS. Is a financial collapse far away for them? Maybe this is what’s behind the lawsuit strategy. Get the money to pay their debts by capturing and selling off parish and diocesan properties.
October 26, 1:28 pm | [comment link]
3. Shay + wrote:
Why not excerpt this from the article?
authorized a letter to be sent to the Episcopal Forum of South Carolina, which had asked the council and the House of Bishops to investigate a series of actions which it said “are accelerating the process of alienation and disassociation” of the diocese from the Episcopal Church. The letter says that the council and the presiding bishop are “committed to doing what we can to help the Episcopal Diocese of South Carolina continue to participate fully in the life, work and mission of the Episcopal Church,” but notes that “there are canonical limits to how her office and the Executive Council can intervene.” Jennings told the council that those limits prevent the investigation that the forum requested. Council member Jim Simons, Diocese of Pittsburgh, offered any help he could by drawing upon his 25-year friendship with South Carolina Bishop Mark Lawrence. Jefferts Schori encouraged Simons to make informal, personal contact with Lawrence, saying “the more bridges we can build, the better.”
TEC has canonical limits? This is the news!
October 26, 1:28 pm | [comment link]
4. A Senior Priest wrote:
principal* ... sorry for the misspelling, above
October 26, 1:29 pm | [comment link]
5. Isaac wrote:
What a truly bizarre statement about bishops wanting to dump the HoD… Where is this anxiety coming from? Very odd. I’d say I’m puzzled, but even puzzles require pieces.
October 26, 1:54 pm | [comment link]
6. New Reformation Advocate wrote:
Senior Priest (#2),
The same startling thing caught my eye. TEC is probably in much worse shape than anyone really knows, and unfortunately, that seems to include the Executive Council itself, which is supposed to be monitoring church finances and adjusting spending as necessary.
I’ve always suspected that the leadership of TEC wouldn’t be willing to change until forced to do so financially, when they finally hit bottom. Well, it seems that the finances of TEC have been in a free fall, due in large part to various profligate spending sprees, not least on all those scandalous lawsuits in the last five years. Maybe the day of reckoning when they smack into the bottom line, crash and burn, isn’t far distant after all. That would actually be a mercy…
October 26, 2:41 pm | [comment link]
7. pendennis88 wrote:
If TEC was a stock I would short it. Unless they can pull that Dennis canon thingy over at Trinity Wall Street. Perhaps the TEC doctors will suddenly diagonose Rev. Cooper with a case of molior abandonment defero.
October 26, 2:48 pm | [comment link]
8. Brian from T19 wrote:
The HoD and the HoB long ago ceded all authority to ++Katharine. It is too late to try and take it back.
October 26, 2:51 pm | [comment link]
9. D a v i d + wrote:
I wonder if Executive Council considered putting an end to any or all of the legal action they are pursuing, that alone is more than a 4 Million Dollar line item in the General Convention budget.
October 26, 2:52 pm | [comment link]
10. Br. Michael wrote:
I agree with Bryan. It’s not much different than the Reichstag ceding full powers to the new Chancellor in 1933.
October 26, 3:06 pm | [comment link]
11. Jon wrote:
I love Godwin’s Law. It’s one of the few things in the world you can really count on.
October 26, 3:12 pm | [comment link]
12. BigTex AC wrote:
Yep…all I can think of is Colin Clive and Boris Karloff.
October 26, 3:36 pm | [comment link]
13. robroy wrote:
Senior Priest, when you lose your principles, you will start to lose your principal. ;^)
October 26, 4:26 pm | [comment link]
14. Pageantmaster ن [Repent Justin Welby] wrote:
This is fascinating, albeit to an outsider like me. I have been trying to get my head around this. There is similar puzzlement on Curmudgeon and BabyBlue centering on the ENS reports regarding the presiding bishop ramblings and the budget discussions: here and here and on Episcopal Cafe here although it is like trying to find out about a book, not from having read it, but by listening to the chatter at the book club.
Some of the liberal discussion centers on the position of the House of Deputies, but more interesting is the financial flak. Much of this seems to be regarding some matters coming out of discussions of an audit. It looks as if KJS is railing against someone, possibly the auditors or a group on Executive Council looking into things she and her administration have been up to and she is complaining about
 ‘bean counters’; and  Executive Council not focusing on the big picture; and  getting involved in ‘staff’ matters. She three times appears to have been trying to warn them off.
So what is up? Looks like there are audit recommendations that
lawyers are appointed to look into things.
Then there is the financial meltdown. Not only are they looking to
deal with a $2.1 shortfall, but this pales beside plans on the one hand:
1. To borrow $60m to refinance $46.1m of borrowing made up of principally $37m of borrowing to upgrade 815 by mortgaging firstly 815 and secondly non-tied endowment assets; while on the other hand at the same time
2. talking about selling 815.
Why would you mortgage something you are planning to sell in the short term? It does not make sense unless it is because you have no choice in the short term to avoid financial implosion.
One wonders if there is a huge bill which needs to be paid, or one
coming up which needs the silver to be flogged off to pay it. If so
it might be in the region of the $14.9m additional borrowing. This
could be for one or more of two things:
1. Lawyers fees, actual or anticipated, or
2. Redundancy costs.
It looks like there is a large part of a financial iceberg below the
surface which is being addressed without details being disclosed.
KJS is presiding over what looks like very serious and accelerating meltdown and this seems to have led to panic. But someone apparently is at the same time trying to keep a lid on it and prevent disclosure of what they have been up to.
I have seen enough of this sort of thing in the business world for it to set all the alarm bells ringing, and often when you look back it is obvious that if there is a lot of smoke coming out of something, then there is a blazing inferno raging. What have KJS, her staff and Mr Beers and his firm been up to? Perhaps someone should look into it.
October 26, 5:41 pm | [comment link]
15. Larry Morse wrote:
Maybe I am being slow witted, but I don’t understand what she is talking about. This is both a financial problem and an ecclesiology problem? Will someone help me out? Larry
October 26, 6:29 pm | [comment link]
16. In Texas wrote:
I wonder if it may have something to do with the CPA report for last year which says on page 28:
NOTE M – CONTINGENCIES
The Society is subject to various claims and legal proceedings that have arisen in the ordinary course of its business activities. The Society is not aware of any pending litigation which will have a material adverse effect on its consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS AND OMB CIRCULAR A-133
SUPPLEMENTARY INFORMATION TOGETHER WITH
REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
THE DOMESTIC AND FOREIGN MISSIONARY SOCIETY OF
THE PROTESTANT EPISCOPAL CHURCH
IN THE UNITED STATES OF AMERICA AND AFFILIATES
December 31, 2009 and 2008
October 26, 6:52 pm | [comment link]
17. cseitz wrote:
Pageant—your book club analogy is right on target, and so is I suspect much of your speculation. In addition there seems to be some tension between a Council that includes lay and clerical representation, and which is nosing around/managing in ways that the PB believes is not its remit; and the office of Bishop. That seems counter-intuitive at one level, given the ways the Deputies seem to lead the charge for things radical—what is the objection, then? Is it that the ‘empower the laity’ agenda is worrisome if there are bills about to be presented on the order you intimate/major looming financial problems? The giddiness of ‘give me a turn’ and ‘we will change the world’ suddenly sounds nonsensical? With you, I do wish we had some sane person on the inside who could tell us what all the codes and bank shots mean.
October 26, 6:53 pm | [comment link]
18. Pageantmaster ن [Repent Justin Welby] wrote:
Oh, and when the Chief Exective or Senior Partner starts telling the board of directors or junior partners that they do not need to worry their heads about all that financial stuff that he deals with, I would advise them to seek advice and to have an independent audit. In any properly run business, a board, partners meeting or executive council is charged with KNOWING what is going on, asking questions and holding the administration to account. Cutting them out of the equation is a sign that something is very wrong. They are elected for the purpose of oversight of the executive, and are accountable for what they knew, OR OUGHT TO HAVE KNOWN had they done their job.
October 26, 6:56 pm | [comment link]
19. Pageantmaster ن [Repent Justin Welby] wrote:
Who approves borrowing of $60m including new borrowing of around $14m outside the existing budget without full and transparent information about what its breakdown is for and full information about all the circumstances under which it arises? Do you think a bank would lend on such flimsy information? Plus if past payments have been missed, that is also a sign that things may be going very wrong.
October 26, 7:01 pm | [comment link]
20. Creedal Episcopalian wrote:
Things going wrong at TEC? Who would have guessed?
October 26, 7:15 pm | [comment link]
Is Schadenfreude one of the seven deadly sins?
21. Isaac wrote:
I think we’re conflating three different issues in a way that is not particularly helpful (to which I largely blame ENS…). First, there’s the PB’s response to Mrs. Sherrod’s concern about the role of laity in the governance of the church. Then, seperately, is the financial issues, which I tried to read and understand, but which only made my nose bleed. Lastly is the apparent micromanagement from someone(s) on EC. The three aren’t necessarily related to each other.
October 26, 7:29 pm | [comment link]
22. A Senior Priest wrote:
There is a Major Scandal brewing somewhere underneath these figures. I’m sure it’s not stealing or some such thing, but rather mismanagement on a historic scale. Mrs Schori was elected (both to the office of bishop and then what is called Presiding Bishop, though Autokrator is what she’s managed to turn the job into). We all know it was only because of her two X chromosomes. She never managed a budget bigger than a middling corporate-sized parish church (ie the Diocese of Nevada) before her apotheosis to her present eminence, and that only for about five years. Before that she had a jumped-up title but was really a curate for about six years. Affirmative action promotion right up the line. Affirmative action like this should only be practiced when one can afford its inherent inefficiencies, which TEC no longer can.
October 26, 7:40 pm | [comment link]
23. John F. Floberg wrote:
Or, maybe it is a matter of considering how much it costs to hold meetings for the Episcopal Church in an economic environment where much of the funding of the General Convention Budget comes from people giving to congregations and congregations giving to dioceses and the diocese giving to the Episcopal Church Budget. There are 9 Provinces in the Episcopal Church. Any time there is a meeting of any committee, commission or board it likely needs a Bishop, Clergy and Lay Person from each Province. Add to that number any member of the General Convention Officers/Staff and members of the Presiding Bishop’s Staff. Typically there are more than 30 people at such a meeting. If that same group meets 2 or 3 times a year for three years the travel, lodging and other expenses to cover that meeting really add up. Multiply that times the number of Committees that are appointed by the Presiding Bishop (who appoints Bishops) and the President of the House of Deputies appointing their members. That, my friends, is the cost of governance in the Episcopal Church. There is no conspiracy being covered up here. It is a Church that grew and is now shrinking in numbers. It is a Church that grew in its financial holdings and is now shrinking in numbers. Business as usual needs to be addressed with the tension of money and its ability to provide for both broad involvement of people and the cost of doing mission.
October 26, 7:54 pm | [comment link]
24. Pageantmaster ن [Repent Justin Welby] wrote:
#16 In Texas
Thank you for your link to audited financial statements for 2009 and 2008 of DFMS. I had a quick look through them.
One thing which stood out for me in the notes to the Consolidated Financial Statements as of interest is on Page 20 of the notes [figures are in ‘000’s]
2. Line of Credit
In December 2004, DFMS obtained a $50 million line of credit facility) from the Bank of New York, secured by DFMS’s investment in unrestricted marketable securities, at amounts described below, to be used primarily for working capital and other business purposes, including providing funding to renovate DFMS’s corporate office. The line of credit may be drawn and repaid at any time during the revolver period. The interest rate assigned to amounts borrowed under the facility is chosen by DFMS based on the Prime Rate or the Eurodollar Rate of various maturities then in effect. For the years
ended December 31, 2009 and 2008, the interest rates assigned to each borrowing tranche ranged from 1.44% to 2.63% and 2.00% to 2.38%, respectively.
In December 2007, the 2004 facility was extended to December 2010 with the same terms. If not extended or renegotiated at that time, all borrowings convert to a four year term loan with principal and interest payments due quarterly, assuming a 10 year amortization period. At the end of the four year maturity period, December 2014, the balance due, including all accrued interest, is payable in full.
The facility is collateralized by unrestricted investments held by DFMS. The collateral that must be maintained versus loan principal outstanding varies according to the type of collateral on deposit as
a. Cash, cash equivalents and Government securities - 1.11 times the borrowed amount;
b. Fixed income other than U.S. Government securities - 1.33 times the borrowed amount; or
c. Equity securities valued at more than $10 per share - 1.33 times the borrowed amount.
The Society has pledged a combination of investments which exceed the collateral requirements detailed above. From time to time, DFMS has repaid nominal amounts of principal on the amounts
At December 31, 2009 and 2008, $46,788 and $37,500 was outstanding under this line of credit, respectively, and is reflected on the accompanying consolidated statements of financial position as
notes payable. Interest expense amounted to $1,629 and $1,250 for the years ended December 31, 2009 and 2008, respectively.
The facility includes standard affirmative and negative covenants usual and customary for facilities of this type, including remaining an ongoing business, quarterly financial reporting, limitations on
additional indebtedness, and no assignment of collateral.
So the current position is that a line of credit [maximum which can be borrowed] was taken out from Bank of New York in 2004 for $50m to fund renovations and provide working capital. This facility was extended in 2007 to December 2010 i.e. in 2months time. Of this borrowing ability, in 2008, $37.5m had been borrowed to fund renovations to 815, and in 2009 this borrowing was upped to $46.788m very close to the maximum borrowing limit of $50m. An increase in borrowing of $9.288m is quite a bit for extra spending on ‘working capital’ in just one year.
In December 2010 at the end of the term of this Line of Credit, if not renewed, the line of credit becomes a fixed term four year loan with interest payments and principal payments due quarterly. Unless the loan is renewed or replaced, all of the capital borrowed and all accrued interest become due at the end of 2014. Between $47m to $50m plus accrued interest would be quite a lot for the Episcopal Church to find in four years time.
Hence the urgency. It looks as if, having almost exhausted the $50m line they are seeking to increase it to $60m in quite a difficult market for borrowers. Hence it looks as if to have any chance of renewing this loan, they are going to have to provide considerably more security, hence presumably the talk of mortgaging 815 and providing security over assets comprising unrestricted endowment funds. All of this looks as if there has been considerable spending going on, and with more anticipated outside of the normal income streams set out in the TEC budget. 815 is surviving, not on the revenue generated by the Episcopal Church and its investments, but on rapidly increasing and quite large borrowing.
One can see the urgency and something of why there has been this incoherent and panicky series of press reports from the EC meeting. In addition it looks as if those properly asking probing questions have been fobbed off, being told it is not their job and that they should be talking about something else, like rebuilding Haiti’s Cathedral or walking alone into the sunset, or some such rubbish.
So what is the source of the need for these increasing expenditures funded by galloping borrowing? Well there are three obvious candidates: Paying Mr Beers and his law firm; redundancy costs; and plans for the Episcopal Church Records Office in Austin, Texas.
But it seems to me there is a fourth candidate. Some time ago we heard that Virginia was taking out a line of credit [increased I seem to remember from $1m up to $2m at that time], and the implication was that it was a line of credit with the Episcopal Church. So is this increased ‘working capital’ borrowing to provide funds to dioceses, trying to fund the massive litigation they are undertaking? If that has been rolled out, not just to Virginia but to large numbers of other dioceses [quite apart from the funds to start up proxy dioceses] then this would explain a lot. I wonder how many lenders would be willing to lend money to fund litigation [a no-no for banks in my experience]?
Anyway it all looks pretty dire.
October 26, 8:32 pm | [comment link]
25. Pageantmaster ن [Repent Justin Welby] wrote:
I wonder if Bank of New York know that they are funding the Episcopal Church’s litigation?
By the way, looking through the financial statements, I could see no indication that the auditors had been provided with any information [at least at May 2010] that there was any problem with payments from dioceses. The provisions for such things are quite small for 2009 and in any event there is no indication of trouble in collections, much less anything which would lead to a $2.1m shortfall.
Grant Thornton DFMS’s auditors are a reputable firm of auditors who I know and respect, but as they say in qualification, their opinion is only given on the basis of information provided to them by the client DFMS and its officers and they give no warranties in respect of that.
October 26, 8:54 pm | [comment link]
26. A Senior Priest wrote:
Ah! Pageantmaster! You have hit on a new line of investigation by orthodox dioceses being sued by TEC. Presumably, one could point out in court that the money being used to sue them comes from money they borrowed to do it.
October 26, 9:01 pm | [comment link]
27. cseitz wrote:
Thank you, Pageantmaster, for bringing your accomplished eye into all this. Let’s all keep asking for pressure to be brought to bear.
October 26, 9:04 pm | [comment link]
28. Pageantmaster ن [Repent Justin Welby] wrote:
#16 In Texas - looking at the particular point you highlight from the audited statements:
The Society is subject to various claims and legal proceedings that have arisen in the ordinary course of its business activities. The Society is not aware of any pending litigation which will have a material adverse effect on its consolidated financial statements.
Well businesses do get involved in litigation in the course of their business. However:
October 26, 9:17 pm | [comment link]
1. Running 50-60 Court Cases across the United States directly or by funded proxy cannot be described by any stretch of the imagination as being ‘in the ordinary course of business’;
2. Stating that “The Society is not aware of any pending litigation which will have a material adverse effect on its consolidated financial statements”;
appears to be deliberately misleading and if this is what Grant Thornton were told then I would say this was a very serious matter indeed. It does not look like DFMS have been full and frank with their auditors or indeed anyone else with whom they have filed these ‘audited’ accounts or who they have induced to rely on them, including any lenders, who would require at least the last three years accounts. I hope they are more honest with any lender they approach for their refinancing.
29. Ralph wrote:
...their opinion is only given on the basis of information provided to them by the client DFMS and its officers and they give no warranties in respect of that.
One wonders whether there has been a call for a forensic audit.
October 26, 9:44 pm | [comment link]
30. A Senior Priest wrote:
As I thought… this might possibly be a BIG SCANDAL. Headlines?
October 26, 9:53 pm | [comment link]
31. Choir Stall wrote:
“What I am simply saying is that deputies in their election are called by particular dioceses”. Yes, forbid it that Schori and others would actually look at the parts that make up the whole. That they would take consideration of the members rather than the abstract “big picture” invented and inhabited by rabid and loud voices that have co-opted this Church. God forbid that she should look inside the doors of ever-shrinking interest.
October 26, 10:05 pm | [comment link]
32. Publius wrote:
The ENS article reveals several more tidbits.
First, the article acknowledges that the opposition on the Executive Council comes from more than one member. Note that the article says that the PB, addressing Katie Sherrod, dismissed lay delegates in the House of Deputies as not representing the whole church. The article records that the PB’s comments stimulated “murmurings [N.B. plural] of no” from other members of the Council. I’ll wager that more than one member of the Council also challenged the PB, along with Ms. Sherrod, about the underlying dispute (see below) but the ENS article never says that.
Second, the ENS article then pivots into the implausible assertion that the dispute was about some conceptual disagreement about TEC’s governance. Nonsense. Some practical problem triggered this exchange, not a philosophical disagreement about ecclesiology. The ENS article then reports the PB’s strained distinction between a lay deputy’s inability to act for the whole church, and a lay deputy who may honestly think he is acting for the whole church, but whose vision is, in effect, limited by the concerns of the diocese that elected him. That distinction is incoherant. Clearly, the PB thinks that only she [She?] can see TEC’s big picture. I can believe that the PB’s arrogance is one of the sources of friction on the Council.
Third, the ENS article never clearly states what substantive issue stimulated Katie Sherrod’s criticism of the PB in the first place. Although I agree with the commenters above who say that finances must have been that issue, the ENS article bends over backwards to avoid describing what issue triggered the argument. That avoidance tells us that the PB and her circle do not want the dispute clearly presented to TEC’s membership. Why? I wonder if opposition to the Title IV revisions are also stimulating dissent on the Council.
Fourth, the ENS article reveals that the sort of Orwellian double-speak and procedural muddle that are actually substantive hardball, which the revisionists in TEC and the Communion have been using against the orthodox for years, are now being used by the PB against her own Executive Council. I’ll bet that Ms. Sherrod found no procedural opening at the meeting to get a challenge to the PB on the floor for a vote. That is also no way to lead your leaders even in a secular group, let alone a church.
October 27, 12:12 am | [comment link]
33. Larry Morse wrote:
Well, I have a better grasp of the problems now than I had, but many of the specifics are still as foggy as an October morning on an out tide. Some things are faaily clear, however, namely, that Schori has finally stirred real dissent among her cohort, and that she has been blindsided in this. Such dissent will be complex and its sources obscure, but the case will give her a new level of desperation. She clearly has begun to feel that she is losing control, and she senses that, as all tyrants do, any loss of control is progressive and degenerative. She must know now that if a rising tide floats all her boats, it will - must - go out, and the mud flats await all those who do not move into deeper waters. She has been in the shallows all this time and has not known it because of the tide. Now she knows.
October 27, 8:18 am | [comment link]
So the report above must be taken its entirety to see how deeply in trouble Schori is.
34. pendennis88 wrote:
This is a difficult environment to be refinancing in, especially for a nonprofit with dubious cash flows. I can imagine that is creating some pressure. In my father’s day, and well into mine, the Treasurer would just talk to the Wall Street folks in the Church Club and they would make it happen. But those connections are no longer there; they ran them off. The kind of folks who have that sort of power by and large do not attend episcopal churches in New York anymore, though they may be on the roles. And their kids seem to be either nothing, Catholic or going to Redeemer Pres. At least that is how it looks from the R&T.
October 27, 9:31 am | [comment link]
35. pendennis88 wrote:
#28 - I think from an accounting disclosure point of view, it is accurate to say that losing the lawsuits would not have a material adverse effect in that TEC would not have to pay material damages to the winning party. Costs of litigation are not taken into account in expressing that view, and assuming the costs themselves are recorded for the years in question, that would be sufficient.
And the property in Austin TX has probably not been a bad investment, at least.
October 27, 9:37 am | [comment link]
36. Eastern Anglican wrote:
I think we need to be careful of taking too much joy in this. While I don’t mind watching this cabal chew each other up, I worry about the end game. Is the PB in trouble? It certainly looks that way. Is there a power struggle occuring? I think so.
Since one side has to win, the question is which should be backed? My suspicion is that one President of the HOD is lurking in the wings to pick up the pieces, and make us truly a General Convention church. IMHO that is like Sauron picking up where Morgoth left off.
October 27, 10:16 am | [comment link]
37. In Texas wrote:
#35 – Not being a CPA, I don’t know the relevant regulations, so if you or someone else could enlighten me, that would be great. If I understand correctly, the statement in the report deals with normal litigation, like contract disputes, injury lawsuits, etc., that could result in large judgments? One of the problems with the accounting is that using only the limited publically available information, it is hard to determine the cost of litigation being supported by 815 (see the Anglican Curmudgeon discussions on this) – many of these are 815 directly supporting the shadow/remnant diocese, while that diocese uses whatever income they have to fund the litigation. Other support I believe are loans, and other litigation is direct from 815. The assumption is that when the remnant diocese gets the property and endowments back, they can sell/use the funds to repay 815. What if that repayment is slow or insufficient? What then for the millions 815 has spent, and how does that get accounted for?
October 27, 11:02 am | [comment link]
38. Creedal Episcopalian wrote:
What if they lose?
October 27, 11:17 am | [comment link]
39. In Texas wrote:
Creedal Episcopalian, thanks for the clarification, that was to be my point at the end. If the diocese does not win, and they can’t pay back ....
October 27, 11:42 am | [comment link]
40. Sherri2 wrote:
#36, I’m with you.
October 27, 11:48 am | [comment link]
41. robroy wrote:
#36, I’m not with you. Until the Schori-ites have completely emptied the coffers, there is little to no hope for reform. Sad but true.
October 27, 11:50 am | [comment link]
42. Larry Morse wrote:
But Robroy, there can be no reform. It is far too late for that. Rather we will see, not scandal, but a steady erosion of support for Schori, and I will venture to predict that we will see her resign as the forces she has set in movement rebound on her, a rebound against which she has no protection. Larry
October 27, 2:23 pm | [comment link]
43. centexn wrote:
Let’s not give anyone any ideas about transferring 815 to Austin, Tx.
October 27, 4:24 pm | [comment link]
44. Pageantmaster ن [Repent Justin Welby] wrote:
Certainly it is a principle over here that a borrower is under an obligation to provide a lender with such information as a prudent lender would take into account in deciding whether to grant a loan or not, and this includes large liabilities such as litigation costs beyond the normal ones any business has. There would normally be a provision and warranty in any facility agreement or loan agreement to this effect.
Although TEC may [although not necessarily so] not be subject to claims for damages or liabilites for costs, it has a substantial responsibility for its own costs, and these in no way can be considered to be ‘in the ordinary course of business’ or of anything other than a very large magnitude, given the huge amount of litigation it is undertaking ranging from the lower courts through several layers of appeals.
Further, some US indications are that the auditors would have required a letter from the client’s attorney regarding any current/pending litigation.
What is not clear is how, on the basis of the current income 815 is receiving, it could even afford the interest payments on such massive borrowing which at $60m is almost twice its current income of $39m or so without massively cutting even its reduced expenditure, let alone making any inroads into the payment of the principal of the loan.
What gives? It looks like there is massive spending, unsupported by increased income, financed by massive borrowing. Can it be that they are relying on their own efforts and those of dioceses ponying up the proceeds of any sales of property and assets seized from departed congregations through litigation?
Well if so, what indeed happens if the Presiding Bishop’s litigation strategy is unsuccessful, or the dioceses do not disgorge their recoveries or repay loans to 815? It looks like the Episcopal Church will be completely stuffed.
What lender would finance on that basis, assuming they were fully informed, which the Episcopal Church would be obliged to do under its duties of disclosure and warranties as a borrower?
I have always thought that the Presiding Bishop was a chancer, but this is one hell of a gamble for the Episcopal Church, that she is leading it into.
October 27, 8:31 pm | [comment link]
45. Creedal Episcopalian wrote:
Can it be that they are
relying on their own efforts and those of dioceses ponying up the
proceeds of any sales of property and assets seized from departed
congregations through litigation?
In a word, yes. They are on a tightrope without a net.
What this means is that they are wholly committed to victory in the lawsuits, and literally cannot afford to negotiate. Win or lose the Episcopal Church has already been gutted.
A loss means liquidation to pay this debt. The good news is they get to keep their pensions.
October 28, 9:28 am | [comment link]
46. pendennis88 wrote:
#44: In the US, the onus is on the lender to request whatever it wants disclosed. The borrower is only required to respond truthfully (which is a somewhat malleable concept as the lawyers apply it) in its response, but does not have to volunteer anything. It would not be surprising for appropriate due diligence not to be done for a lending to an old New York institution like 815. Perhaps you have heard of lenders in the US not making loans on the best criteria? Though I would suspect there are not as many opportunities there as there were 3 years ago, nothing would surprise me.
What does surprise me a bit is that any bank in the US would lend on an episcopal church property at the present time, as all titles are cloudy, thanks to TEC. But you know, bankers don’t read that much.
October 28, 10:04 am | [comment link]