Imani Missionary Baptist Church and its life center got a little breathing room Tuesday from Circuit Judge Ernesto Scorsone in its battle with Central Bank, which holds Imani’s troubled mortgage.
How long Imani can hold out against foreclosure pressure from Central Bank, which says the church and its life center owe more than $10 million, remains up in the air.
Scorsone denied a motion from Central Bank to enforce a contract that would have forgiven Imani’s debt and leased it the Georgetown Road property in return for getting the deed for that property.
In meetings with the church last spring, the bank thought it had come to an agreement with Imani on its delinquent debt. Central Bank’s plan was to get the deed and lease the property back to Imani for $35,000 a month while trying to sell it.
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But Central Bank never received properly executed paperwork from Imani. The paperwork it received was missing a signature, and another signature hadn’t been signed in the presence of a notary.
At Tuesday’s hearing, the Rev. Willis Polk of Imani said that at the spring meetings, he was being rushed by Central Bank without an idea of what his options were to resolve the debt. Polk said he also wanted to protect the $7 million that had been invested in the church outside the mortgage.
Central Bank officials offered a different interpretation of what Polk said was nervousness and confusion during those meetings.
Ellen Sharp, Central Bank’s vice president of special assets, and Steve Mallory, assistant vice president for commercial lending, said Polk had been cordial during meetings regarding Central’s plan for Imani to turn over its deed.
Regardless of the level of good feeling at the time, the bank and Imani apparently parted ways when Polk asked that Central officials call Ken Lewis, a church finance consultant who helps churches in financial straits sell their debt at a discount.
Central was not interested in that method, Sharp said. But Polk hired Lewis and began to pursue options for the church to hold on to its property.
“If this was a deal that had gone bad, I would have turned the papers in,” Polk testified. “But I discovered this was a bad deal.”
Attorney Scott Hunt, representing the Imani church, said that Polk “was analyzing options. He was proceeding along with what he believed to be the only path.”
Imani moved into the vast space on Georgetown Road in 2008, but 30,000 square feet that Imani was going to lease to commercial clients is unfinished, as is the church sanctuary.
Tyler Powell, Central Bank’s attorney, argued that the bank had a signed document from Imani. But Scorsone said the document was not legally recordable and that the bank had told Polk that it was not properly executed.
“If the congregation didn’t sign off on the deal, do we really have a deal?” Scorsone asked.
The bank acted in good faith in bringing the motion, Scorsone said, but “the documents did not represent the intent of the church and the life center.”
Nonetheless, he urged Central Bank and Imani to come to an agreement to forestall future lengthy, costly legal battles, since Imani cannot support the mortgage debt.
Scott White, one of the attorneys for the Imani Life Center, said he would extend an invitation to Central Bank for a meeting. In the meanwhile, White said, he still plans to file a lender liability lawsuit.