PTL Files Bankruptcy Petition : Protection Sought From 1,400 Creditors Owed $70 million

The scandal-racked PTL ministry filed for reorganization today under Chapter 11 of the federal bankruptcy code to seek protection from 1,400 creditors who are owed $70 million.

Officials of the evangelical empire pledged at a news conference that the PTL ministry would continue and would emerge from reorganization in a fairly short time.

PTL lawyer Norman Roy Grutman said the filing was necessitated by “chaotic mismanagement of the preceding administration” under PTL founder Jim Bakker, who resigned in disgrace in March over allegations of adultery and homosexuality.

Jay Miller, co-counsel for the evangelical empire, said from his New York office that the action had been authorized Thursday by the PTL board, chaired by the Rev. Jerry Falwell, who took over after Bakker resigned.

Seeking Court Order

The action will allow the television ministry to seek a federal court order freeing it from the threat of creditors’ lawsuits until it can develop a plan to put its finances in order.

During a PTL board meeting Wednesday at Falwell’s Old-Time Gospel Hour headquarters in Lynchburg, Va., Falwell had disclosed the $70-million debt and said $23 million of that was delinquent.

“We obviously have some problems,” he said.

In mid-May, Falwell went on the “PTL Club” television program and pleaded for $7 million by the end of the month. Falwell said the “May Emergency” had turned into a “May Miracle” when the $7 million was raised. He called it evidence that PTL was maintaining the support of its 518,000 members.

A much-ballyhooed auction during the Labor Day weekend, though, netted only $200,000 instead of the $500,000 that PTL officials had predicted.

As recently as two weeks ago, Falwell was painting a more optimistic view of the ministry’s prospects.

In a speech in Grapevine, Tex., on May 29, he had predicted that PTL would be back on its feet by the end of the summer. He told a conservative political action group that $6 million had been raised in the previous 11 days and that the ministry was beginning to pay off its debts.

PTL, which stands for People That Love or Praise the Lord, faces legal as well as financial problems. The Justice Department, the Internal Revenue Service and the Postal Service all have launched criminal investigations of PTL, Falwell has said.

Word of the bankruptcy plans came just a day after Bakker and his wife, Tammy Faye, got a hero’s welcome during a surprise visit to Heritage Village USA, the Christian theme park they built.

Asked the reason for the visit, Bakker said: “To say goodby to it all. If Jerry Falwell lets us, we’ll come back. But otherwise we are going to start a new ministry.”