Church stops bank 'dead in its tracks'

Roxburys historic Charles Street African Methodist Episcopal Church has filed for Chapter 11 bankruptcy protection at the 11th hour to halt a foreclosure auction that its bank had planned to hold tomorrow.

The short story is that there will be no foreclosure at all. We stopped the bank dead in its tracks, the Rev. Gregory Groover told the Herald last night after the church filed for bankruptcy in federal court.

The move came less than 40 hours before Boston-based OneUnited Bank, which couldnt immediately be reached for comment, had planned to seize the church through a foreclosure auction.

OneUnited, which bills itself as the nations largest black-owned bank, launched foreclosure proceedings after the 194-year-old congregation failed to make a $1.1 million balloon mortgage payment in December.

Charles Street said it never missed a monthly payment on the 5-year-old loan, but couldnt refinance when the balloon payment came due because of an ongoing legal dispute with OneUnited.

The bank sued the church in 2010 over a roughly $3.6 million construction loan that Charles Street had taken out to build an adjacent community center.

OneUnited stopped disbursing funds for the project in 2009, which the church said prevented it from finishing construction and raising funds to repay the loan.

Church lawyer Ross Martin said Charles Street plans, as part of its bankruptcy reorganization, to restart the project using a $1.5 million grant from the African Methodist Episcopal movement.

He added that the church will ask a bankruptcy judge to let Charles Street repay its OneUnited debts over 30 years at 5.25 percent interest.

Groover said that means the congregation wont violate the Bibles Thou Shalt Not Steal commandment.

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Church stops bank 'dead in its tracks'