Windermere “sold”—1000 acres
Judge grants MBC’s request for temporary restraining order
By Don Hinkle
JEFFERSON CITY – Windermere lawyers admitted in court on Dec. 19 that 1,000 of the 1,302 acres of the conference center in Camden County have been sold to National City Bank in a refinancing plan. Meanwhile, the trial judge granted the Missouri Baptist Convention’s (MBC) request for a temporary restraining order (TRO) against further real estate transactions, and may eventually nullify the 1,000-acre deed to the bank.
Cole County Circuit Court Judge Tom Brown said he wanted to preserve the “status quo” by enjoining any further sales or mortgages involving Windermere property while MBC attorneys investigate the documents found on the public record. The “TRO” also prohibited any bond sales by Windermere. Judge Brown expressed surprise that the Windermere board had taken such actions while board’s authority is in dispute in his court. He suggested that, if he found that the board lacked authority, these transactions might ultimately be canceled.
“The judge’s TRO is a giant step toward protecting agency assets, and canceling any debts that have been incurred by the unauthorized board,” said MBC attorney Michael Whitehead after the hearing. “The banks and bond brokers are on notice that their transactions are subject to cancellation if the court finds that the breakaway board lacked authority to sell or encumber these ministry assets. The TRO means that is more likely to happen.”
On December 15, MBC attorneys informed the court that it appeared from public records that Windermere’s board had deeded away more than 900 acres of land. Windermere attorney Jim Shoemake told the court it was more like 200 acres, and it might be subject to re-purchase right in Windermere.
On Dec. 19, Shoemake told the court that Windermere’s board had, in fact, conveyed 1,000 acres to the National City Bank in St. Louis, in order to reduce the principal debt. Shoemake said the reduced debt was paid off by a new loan for $14 million from two California banks on a one-year note.
Whitehead showed Judge Brown a “special warranty deed” to National City Bank, based in Cleveland, Ohio, and, a deed of trust for “future advances,” securing an initial loan of $14 million and future advances of up to $30 million. The judge said it appeared to be a line of credit, but Shoemake denied that terminology. Parties to the mortgage included Reliance Trust Company of Atlanta, Ga., and California Plan of Church Finance, Inc., an affiliate of the California Southern Baptist Convention.
Brown set a follow-up date for Jan. 4, to check the status of depositions needed to determine whether the TRO should be converted into a preliminary or permanent injunction. The judge said, for now, he will not enjoin the cutting of timber, which Windermere attorneys said had been done in consultation with state conservationists, solely for the purpose of thinning some of the property’s timberland.
Brown’s ruling was one of the most significant thus far against any of the five breakaway agencies where moderate trustees, opposed to the theologically conservative direction of the MBC, violated Missouri corporate law by amending their charters in 2000 and 2001 to become self-perpetuating, without MBC approval. The five agencies, which includes Windermere with its vast timberland and miles of pristine shoreline along the Lake of the Ozarks in central Missouri, have assets totaling more than $240 million. The other agencies include the Missouri Baptist Foundation, which on Dec. 7 reported assets of $150 million; Word & Way, The Baptist Home and Missouri Baptist College.
Last month Mallory denied that Windermere was selling any of its real estate, but reversed himself within a few days, saying the sale of some of the property to private developers was part of a long-range master plan more than five years old. It calls for selective development and construction of residential and single family housing, condominiums and retirement housing options.
According to a Word & Way story posed on its Web site Dec. 1, Mallory was asked by a trustee Nov. 17 “if selling some of Windermere’s property was an active consideration.” Mallory said no, that property would not be sold, because that would “disrupt development plans” under the master plan, which was 5-10 years old. “This (expansion) is not a Johnny-come-lately decision,” he said. Mallory then reversed himself in a phone conversation the next day with the Word & Way. The news articles did not identify the trustee who asked the question on Nov. 17, nor explain how the trustee could be unaware of the master plan to sell lots, if in fact it had existed for at least five years or more.
At least four relatively new houses have been constructed recently on a hill overlooking the backside of Windermere’s campus. Workers for Tony Lee Logging of Seymour, Mo., told The Pathway Dec. 15 that they had been cutting trees at the site for about three weeks. Other trees have been cut near the Windermere entrance off of State Road AA.
“We intend to re-depose Dr. Mallory and Frank Shock,” MBC attorney Whitehead said. “We also need to depose corporate representatives from the banks involved. The judge will decide at the next hearing whether to impose a ‘preliminary’ injunction on Windermere. Before that hearing we need to determine what has been sold, to whom for what amount, and what was done with the proceeds.”
Brown’s most recent rulings come amid a flurry of activity in recent weeks at Windermere. The first development came Nov. 17 when trustees suddenly relieved Shock from oversight of daily operations at the facility. Shock had been the executive director since 1989, and began the controversial Wilderness Creek youth camp project that saw Windermere’s indebtedness explode to more than $21 million in recent years.
Word & Way reported that Windermere trustees had refinanced the facility’s red ink and allegedly reduced the indebtedness from $21 million to $14 million. Word & Way did not report that the refinance involved the sale of 1,000 acres of land. The refinancing plan also includes a bond sale, though few details have been disclosed. The bonds were to be sold by California Plan of Church Finance, Inc.
“Transactions like these happen all the time in hostile takeover cases,” Shoemake told the court. “It’s common for boards to engage in these transactions, even during litigation over issues of authority. It happens all the time.”
“Not in my cases,” replied Brown. “This never happens in my cases.”
Restraining orders usually require the requesting party to post a bond, to cover any damages that the defendant might suffer if the bond is dissolved as being improper someday. Brown required the MBC to post a $1,000 bond, which was nominal. Shoemake protested the low bond amount, and complained that the TRO might cause lenders and their legal counsel to feel insecure. “Legal counsel and bond counsel have approved all this. Just the entry of the TRO might make them feel nervous.”
“Well,” concluded the judge, “maybe they should feel nervous.”