Tight Security Marks Start of PTL Bankruptcy Hearing

A bankruptcy court hearing for the PTL ministry opened in a theater Wednesday and drew 150 creditors and spectators, who were frisked by U.S. marshals and required to walk through a metal detector.

A PTL administrator, chief operating officer Harry Hargrave, said at the hearing that the organization may soon turn a profit and denied that chairman Jerry Falwell’s Old Time Gospel Hour organization benefited from access to PTL’s mailing list.

Hargrave put off the most controversial issue facing the ailing evangelical empire in U.S. Bankruptcy Court: how to deal with “lifetime partners” who have contributed at least $1,000 each to the ministry.

PTL, which stands for Praise the Lord or People That Love, filed for protection from creditors on June 12, saying it owed $72 million to 1,400 people or businesses.

The six-hour hearing gave creditors their first opportunity to question ministry officials. The normally routine court procedure was moved to the theater to handle the crowd.

At the beginning of the proceeding, a woman in the crowd interrupted the deputy court clerk explaining the procedures to ask, “You don’t open meetings like this with a prayer?”

Neither Falwell nor PTL founder Jim Bakker attended the hearing. Bakker turned the ministry over to Falwell in March after a sex scandal and has been blocked from returning.

Robert Robinson, an attorney representing the committee of creditors, said the meeting Wednesday was “a beginning” for settling the accounts and confusion connected with the case. “On July 31, the court will establish a specific time frame for the (reorganization) plan,” he said.

During the meeting, an attorney for Bakker implied that PTL chairman Falwell and his Old Time Gospel Hour organization in Virginia have benefited from Falwell’s takeover of PTL.

“Your claims are bogus,” Hargrave told W. Ryan Hovis, an attorney for Bakker.

Hargrave said he did not think the ministries were in competition but acknowledged that the names of some donors or potential donors were on the mailing lists of both ministries.

Hargrave denied that Falwell’s ministry had profited from access to PTL’s mailing list of 518,000 contributors and said the Gospel Hour organization had spent $240,000 to help PTL pay for a mailing to its members. The mailing made no mention of Falwell’s ministry, and PTL later reimbursed the Gospel Hour organization for the expenses, Hargrave said.

Hargrave assured creditors that the debt-saddled ministry is “near break-even” and should start turning a profit within a few months.

“We will be able to pay our debts. We are very confident of that,” Hargrave said.

Some of the 120,000 to 160,000 lifetime partners say they are either creditors or owners of two hotels and a water park at PTL’s Heritage USA theme park in Fort Mill because their donations paid for most of the construction in a time-share agreement.

Lifetime partners were offered free lodging for four days and three nights a year at the hotels, along with other benefits, for each $1,000 donation to building funds.

Hargrave repeated the ministry’s position that the lifetime partners have no legal right to the property, but added, “Morally we don’t think its right” to leave the contributors, whom he called the lifeline of the ministry, with nothing.