The Diocese of Virginia, embroiled in the largest property dispute in the history of the Episcopal Church, is taking out a $2 million line of credit to finance lawsuits against 11 churches that left the denomination a year ago.
The announcement, made in the pages of this month’s Virginia Episcopalian, is the latest in a series of legal battles that is draining the Episcopal Church of millions of dollars. The denomination has filed lawsuits in at least 12 states against churches leaving over disputes on biblical authority and the 2003 election of New Hampshire Bishop V. Gene Robinson, who lives with a homosexual lover.
The diocese says it will sell off “non-strategic” diocesan properties to raise the money needed to win back $30 million to $40 million worth of real estate and assets.
The diocese has spent $1 million to date on the lawsuits, but instead of paying back the sum, is simply paying the interest ”” $80,000 ”” on the loan. The diocese borrowed from restricted endowment funds for the money, spokesman Patrick Getlein said.
“Church pledges to the diocesan budget will not be used to fund litigation,” he said in an e-mail. “There have been some churches, regions and individuals who have made unsolicited contributions to the cost of litigation, which is very much appreciated.”
More than any single factor, this demand for legal money will destroy TEC, for these costs cannot be recouped, and simply paying the interest is merely a postponement, at great cost, of the inevitable need to sell off church property to pay legal bills and to borrow ever more and more. TEC has a tiger by the ears; it can neither hold on long nor dare let go. Financial death is death indeed; talk and discernment and listening will not alter the dilemma. For TEC there is now no solution save dissolution. LM
I have long maintained that all these lawsuits are going to accomplish is to transfer the wealth of TECUSA to trial lawyers.
We need to realize that the worst negotiated settlement is better than the best litigated one.
YBIC,
Phil Snyder
Larry, good imagery of the tiger by the ears. However, the message of inclusion and reconciliation will turn that tiger into a pussy cat, right?
I think that should use this money to feed the poor and help to achieve the goals of the MDO instead to use it to fight other Christians in court. I think it will destroy the biggest TEC diocese what will some thing good, they will destroy themselves.
the most interesting statement in this article is that the diocese is borrowing from “restricted endowment funds” to fund the litigation.
According to the latest diocesan financial statement (which can be accessed through this link), the Diocese has $9,491,882 in real estate holdings, which are intended for future mission development. This figure is based upon 2005 valuations, which presumably are inflated from present value due to the general decline in property values in the area. If the Diocese needs to raise the equivalent of $2 million, it may have to liquidate up to a quarter or even more of its unimproved real estate holdings. (Please correct me if there are other diocesan real estate holdings not accounted for in the financial statement.)
I believe the phrase that pays is, “Eating your seed corn.”
The liberal Anglican Scotist sees the folly of the lawsuits:
[blockquote]When there’s a shouting match in front of the store, people will be disinclined to come in. They won’t have the time or energy to figure it all out and to see what is going on–they’ll move away from the margins to somewhere else: not in all cases, but in enough cases that we should be worried.[/blockquote]
and
[blockquote]The fact there is still–after four years–a shouting match that is getting worse and worse serves the Separatist cause. It is in their interest to see TEC continue to be distracted from Mission and to continue to contract while being preoccupied with a never-ending “crisis” increasingly manufactured by the separatists themselves.[/blockquote]
That the “crisis” is an artificial construct of the orthodox is just plain silly. The “in your face, I will do as I d@mn well please” attitude of the revisionists created this mess. D.C. Toedt has an interesting essay on his reappraising blog, “The Questioning Christian” where he also questions the litigation.
However, the continued crisis will eventually overcome the soporific “All is well” mantra of the national church. The heroic battles that are being played out in Virginia and elsewhere are the only thing that will bring the defiant TEC to the bargaining table. Appeals to Christian charity are pointless with KJS and DBB. “Unconditional surrender” and “Just leave, I suggest the Roman Catholic Church” would only result in more aggressive persecution of orthodoxy.
Actually, I think the diocese really has a tiger by the tail. That tiger can turn and BITE you; not so easy for him to do if you have him by the ears. If I were Bishop Lee, I’d be careful……he could get bitten!
I wrote to a friend post GC03 that the cost of lawsuits might have more of an effect on pecusa than conservatives have had in the last 40 years (this is sad on the level of the lack of influence by the orthodox). Maybe the coffers in several dioceses will be bled dry and the beast will then die a natural death without the life support of endowments.
Beg parding #9. Have you ever had a tiger by the ears? But the tail will do as well. The point is of course not the tiger’s anatomy, but the painful fact that no good decision is possible while a decision is unavoidable. In short, one cannot hold the tiger’s ears forever, and this makes the end inescapable. I suppose there is the issue of who gets tired first, and TEC is in fact betting it can hold on long enough for the tiger to wear down. An interesting risk. (Incidentally, the Chinese say “Holding a wolf by the ears.” )My guess is that the longer TEC holds on, the angrier the tiger is going to get… and the hungrier. I suppose it is more accurate to say that TEC is holding on with one hand and patting with the other. Try this technique on your house cat and let me know what happens. Larry
The realization that church millions are going to lenders and lawyers should have powerfully negative collection plate consequences among the many who, up to now, chose to ignore the post VGR consecration controversies. Even the willfully blind and complacent have breaking points!
Actually, the Diocese of Virginia drew against “restricted endowment funds” to the tune of $1 million to fund the lawsuits while repaying only $80,000 back as interest. At least for now Bishop Lee has tossed an I.O.U. into the “restricted endowment fund” portfolio. This is the same model as that used by a succession of Congresses and Administrations to use the Social Security Trust Fund as a slush fund to cover budget deficits.
Don’t lose track of the fact that prior to the expedition into the courts the Diocese of Virginia was adding ~$80,000 to the kitty as the $1 million earned 8% interest (using their numbers). Now the Diocese of Virginia is taking $80,000 out of the operating budget to cover the lost interest.
One wonders if suing the faithful is such a sound legal strategy why the Diocese of Virginia couldn’t find a law firm willing to take the case on a contingency basis for a percentage of any judgment awarded once the dust settles. I’ll bet the reason is there are no law firms willing to bet on such a chancy adventure.
For the rest of the ‘line of credit’ the real life parallel being undertaken by the Diocese of Virginia is akin to observing a person in dire financial straits spending far too many precious and scarce dollars each week on Lottery tickets at the local 7-11 in the vain hope that his ship will eventually come in and make everything right.
Is them ther’ federal money or real, Confederate dolla’s? One Lee was a hero, but taking por dead widows’ endowmen’s, now that is jus’ plain mean and snake-y like!
#14 You’re right about that: only one Lee was a hero!
Is it legitimate to borrow from restricted endowment funds. Presumably they cannot just spend them on litigation because the terms forbid it — so why can they borrow it?