Church foreclosed on

Published 10:22 pm Tuesday, November 10, 2015

“No Trespassing” signs in front of Tabernacle Christian Church this week signaled the foreclosure of the church by its largest creditor.

“No Trespassing” signs in front of Tabernacle Christian Church this week signaled the foreclosure of the church by its largest creditor.

“No Trespassing” signs and a security guard that appeared in front of Tabernacle Christian Church on East Washington Street this week are evidence of foreclosure.

Joseph Liberatore, an attorney for the church, said Tuesday that he admired the members who have tried hard for years to keep the church out of foreclosure.

“I don’t know how they could have tried any harder,” Liberatore said. “Their members have been faithful. Their giving has been sacrificial, even during tough times.”

Email newsletter signup

The church filed Chapter 11 bankruptcy on April 30 to stop an auction that was set to take place that afternoon, according to the documents. Foundation Capital Resources Inc., the church’s largest creditor, sought to sell the property.

On Sept. 17, the bankruptcy court granted Foundation Capital Resources permission to foreclose on the property on or after Oct. 26. Because the church filed for bankruptcy only to stop the sale, it requested and received dismissal of the bankruptcy proceeding.

The church believed its chances of obtaining a loan were better if it was not a bankruptcy debtor, according to the court documents.

Liberatore said the property was auctioned Friday.

“We ran out of time,” he said. “They had the foreclosure sale on Friday, as they were allowed to do. The process of taking over possession caught us by surprise. We certainly didn’t expect it to happen the way that it did or as fast as it did.”

He said another church allowed Tabernacle to hold an afternoon service on Sunday.

“Our hopes and prayers are for some kind of arrangement with Foundation Capital so they can at least recommence Sunday services at the location, or that they’ll be able to secure an alternate location where they can have morning services,” Liberatore said.

The church had previously filed bankruptcy in 2008. At that time, it owed more than $7 million to Foundation Capital, which included property at 1309 and 1401 E. Washington St., the old sanctuary.

“In fairness, this is the second bankruptcy that was filed,” Liberatore said. “There’s been a long period of time that we’ve been given an opportunity to try to find the financing. It’s just been a very difficult market for any church to get refinancing for their loans.”

Liberatore said the church “did an amazing job” of keeping up with its payments until it started having to make payments on the principal as well as the interest.

“Once it went to where they were paying almost $21,000 a month, the church couldn’t quite keep up,” Liberatore said. “I have great admiration for those members. They were amazing in how they continued to give and be faithful.”

Liberatore said Financial Capital agreed not to pursue the church for the remaining balance if it cooperated in the foreclosure process.

In addition to the mortgage, according to its most recent bankruptcy filing, the church owes $49,000 to the Internal Revenue Service, $37,000 to Northern Star Credit Union and $11,000 to the city of Suffolk, as well as eight other creditors to whom it owes more than $14,000 total.

Bishop Carlton R. Upton Sr. answered the phone at his home Tuesday and immediately said, “I’m not talking to you about my church situation.” After being asked about the bankruptcy, he hung up without further comment.

Pastor Ben Fitzgerald III of Zion Christian Church, whose name is on the bankruptcy paperwork, said he has not been affiliated with Tabernacle since August. He also said the neighboring Tabernacle Gardens Assisted Living Facility is not affiliated with the church in any way and so should not be affected.

Editor’s note: This article has been updated to reflect Fitzgerald’s comments, which were received after deadline Tuesday.