Edmonton

Lutheran Church-Canada Alberta-B.C district still protected from bankruptcy

The Alberta B.C district of Lutheran Church-Canada will continue to be protected from bankruptcy and legal proceedings after the church requested an extension under the Companies’ Creditors Arrangement Act.
Investors met at St. Matthew Lutheran Church in Stony Plain on January 15, one of many meetings held in Alberta and B.C. in January. (CBC)

The Alberta B.C district of the Lutheran Church-Canada will continue to be protected from bankruptcy and legal proceedings after the church requested an extension under the Companies’ Creditors Arrangement Act.

The request was granted by the Court of Queen’s Bench of Alberta in Calgary on Friday.

The move will continue to protect the district from bankruptcy and from being sued until March 27, 2015, while giving the church time to draft a plan on how to restructure its investment funds. The church had wanted a 90-day extension, but was given a  30-day extension instead.

In early January, about 2,000 investors with one of the church’s investment funds were told their accounts had been suspended and the church would not be able to fully pay back the $95 million owed to them.

At the time, the district’s president, Don Schiemann, said he took responsibility for the financial crisis because it happened on his watch.

Since then, the financial mess facing the church has deepened and spread to another investment fund, District Investments Ltd. Accounts with that fund have also been frozen, affecting more than 900 investors who cannot withdraw money from their RRSPs, RRIFs and TFSAs. The deposits as of Nov.30, 2014, were $37 million.

A court-appointed monitor has been overseeing the finances of the Alberta-B.C district since the end of January.

In a statement posted on its website the church said it is working to get the “right people to the table” by hiring a chief restructuring officer, a new restructuring committee and a creditor committee.

Part of the church’s restructuring may mean it will be forced to sell off assets.

The current financial crisis facing the church has raised questions from the national office of the Lutheran Church-Canada over whether churches should be in the business of financing.

In January, the church’s national president, Rev. Robert Bugbee, called it a serious situation that warranted a review of how other Lutheran church districts administer their investment funds.

The church has set up an emergency fund for investors who rely on money from the investment funds to meet basic living expenses.

The investment fund began in 1921 as an internal savings and loan program, because banks at that time were not lending money to churches.


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