In the midst of a bitter bankruptcy proceeding in which the finances of Charles Street AME Church are under federal scrutiny, Rev. Gregory S. Groover Sr., the church’s embattled pastor, announced his resignation as president of the appointed Boston School Committee.
The sudden announcement was made just a few days after Groover won a Pyrrhic victory in bankruptcy court when Judge Frank J. Bailey granted the church until Feb. 28 to file a financial reorganization plan. The church filed an initial plan last March and has since filed six different amended versions.
None of those plans are acceptable to One United Bank, the nation’s largest African American-owned bank and Charles Street Church’s single largest creditor. One significant issue is whether the court should allow the church to repay nearly $5 million in debt to the bank over 30 years as requested by the church.
OneUnited attorneys have argued that the Church’s finances are a mess, filled with major discrepancies within the church’s own financial documents, and their latest motion requesting an extension further demonstrates what OneUnited has called “gross, severe financial mismanagement” at Charles Street Church.
In opposing the motion for an extension, OneUnited attorneys argued last week that Charles Street “has not made good faith progress…nor has it demonstrated reasonable prospects as may regard a viable plan.”
On those points, Charles Street attorneys disagreed, arguing in their motion for an extension that the church has made “significant progress” by holding “several negotiations with creditors” and “reaching agreement with two of the three major creditors…”
Church lawyers also said discrepancies in the church’s financial documents were in part due to “a mislabeling of one column” and that the church has “worked diligently to correct” its statements.
Given the litigiousness of the bankruptcy case — to date, nearly 15,000 pages of sworn testimony, depositions, financial statements, motions and other documents have been filed during the case — it’s hard to believe that Groover had the wherewithal to balance his pastoral duties at the church with the demands of working as chairman of the Boston School Committee.
Appointed to the board five years ago by Mayor Thomas Menino, Groover said in published reports that the bankruptcy hearings were “not the driving reason” for him stepping down as school committee chairman.
Groover told the Boston Globe that in addition to spending more time at the church, he wanted to “dive deeper” into his Grove Hall neighborhood and help to turn around schools there. Groover said he would remain an active school committee member.
“I’m not going anywhere,” Groover told the Globe. “I’m still around.”
The relationship between OneUnited and Charles St. started on Oct. 3, 2006 when Groover agreed to borrow $3.6 million to build a 22,000-square-foot community center on church-owned land near Grove Hall.
Called the Roxbury Renaissance Center, the building would feature a grand ballroom, multi-purpose meeting space, conference rooms, prayer and meditation space and sound proof musical practice rooms. To pay for the construction, Groover said that he would raise money by renting space for wedding receptions and community meetings.
The OneUnited construction loan became due on June 1, 2008, and despite a total of five extensions, the church was unable to satisfy its debt by Sept. 1, 2009. A year later, on Aug. 17, 2010, OneUnited then sued in Suffolk Superior Court for breach of contract.
Also named in the suit was Charles Street AME’s co-signer, the First Episcopal District of the African Methodist Episcopal Church based in Philadelphia. At the time, the First District, based in Philadelphia, claimed it had $65 million in cash and nearly $500 million in assets.
Charles Street had also borrowed another $1.1 million, separate from the $3.6 million construction loan. That loan is also in default.
To forestall the pending foreclosure of its property by OneUnited Bank, Charles Street filed for bankruptcy in March in a move to keep the church o perating as it has for nearly the last two centuries.
Although Groover publicly denied any delinquency, the church was late on 43 of its 56 payments and missed its final two payments, according to court records. That “pattern of delinquency,” OneUnited stated at the time, triggered 17 notices of intent to foreclose and forced Charles Street to pay about $17,000 in late fees.
In addition to OneUnited, Charles Street owes about $630,000 to Thomas Construction Company, the Dorchester firm hired to build its proposed Roxbury Renaissance Center; another $450,000 is owed to Tremont Credit Union for a loan to repair the church’s roof.
Under oath during bankruptcy proceedings, Groover admitted that “mistakes were made.”
To replace Groover on the school committee, the board selected on Monday Michael O’Neill, a life insurance executive who has served on the panel for four years, as its new chairman.
O’Neill, 52, a Charlestown resident and the committee’s vice chairman for the past year, was selected on a unanimous vote of the seven-member board.
Alfreda Harris, who has served on the committee for the last 20 years, was elected as the new vice chairwoman.
In what was described as “gross, severe financial mismanagement,” the historic Charles Street AME Church filed for bankruptcy last week, pleading to a federal judge to restructure about $4 million in debt to OneUnited bank as well as other creditors.
Though Rev. Gregory Groover Sr. repeatedly said in several public appearances that the church didn’t miss a payment, a different story emerged in bankruptcy court: the church was late on 43 of its 56 payments and missed its final two payments. More »
A federal bankruptcy judge ruled in favor of OneUnited Bank this week and will allow bank attorneys to question a Bain Capital official about his role in arranging a questionable $1.5 million donation to the historic Charles Street AME church.
According to bank attorneys, the donation was part of a scheme to short-change the bank and eliminate the obligations of the First District African Methodist Episcopal Church as a co-signer on Charles Street’s original $3.6 million construction loan. More »
In yet another embarrassing disclosure in federal bankruptcy court, Rev. Gregory S. Groover Sr., pastor of the historic Charles Street AME Church, submitted revised 2011 financial statements that show previous submissions for the same fiscal year were wrong by more than $600,000. More »