Bankruptcy Court Official Meets With PTL Creditors

Times Staff Writer

The U.S. Bankruptcy Court official who will appoint a trustee to run PTL following the Rev. Jerry Falwell’s surprise resignation as chairman met Friday with representatives and creditors of the scandal-plagued evangelical empire.

John Waites of Columbia, the U.S. trustee in Bankruptcy Court, met with the parties at an undisclosed location in Charlotte, N.C., one day after Falwell and the rest of the PTL leadership resigned in a dispute with a federal bankruptcy judge over reorganization plans for the ministry.

Tim Stack, a spokesman for Waites, said he did not know whether Waites discussed the appointment of a new trustee at the Charlotte meeting. But in such cases as PTL’s bankruptcy, Stack said, federal law calls for an “appropriate individual” to be named after consulting interested parties.


Falwell Steps Down

Falwell who took over from PTL founder Jim Bakker in March, when Bakker quit amid a sex scandal, said at a news conference Thursday that he was stepping down because the bankruptcy judge had invited PTL creditors to submit a reorganization plan of their own, to be considered along with Falwell’s. Falwell contends that the PTL’s creditors want Bakker to return.

Falwell disclosed Friday that he had asked convicted Watergate figure Charles W. Colson to assume control of the PTL when he quit, but that Colson, a “born-again” Christian who now runs a Virginia-based prison ministry, had declined.

Falwell said Colson was his “personal choice” to head PTL.

“He would have been an excellent chairman, but Chuck’s health and other factors dissuaded him, and I certainly understood that,” Falwell said.

Colson’s Tumor Removed

Colson, 56, who once said he would “run over my own grandmother” to ensure former President Richard M. Nixon’s reelection, served seven months of a three-year sentence for his role in the Watergate affair. Last January, a small malignant tumor was removed from his stomach, and he later said he planned to spend more time with his wife and family.

As a U.S. trustee, Waites is empowered to appoint a trustee to oversee the financially embattled PTL. Anyone he names, however, must be approved by U.S. Bankruptcy Judge Rufus Reynolds, who has guided the ministry’s reorganization since June. Reynolds also must approve the resignation of Falwell and the board.

Waites was expected to meet with Reynolds on Friday, but Waites’ spokesman, Stack, said late Friday that “as far as I know, Mr. Waites has not gotten a hearing” with the judge, whose court is in Greensboro, N.C.


PTL filed for reorganization and protection from creditors in U.S. Bankruptcy Court in June, saying it owed 1,400 creditors a total of $72 million. That figure later was changed to $60 million.

At PTL Since March

Falwell took over PTL in March at Bakker’s request after Bakker resigned from the ministry amid reports that he had had a sexual encounter with church secretary Jessica Hahn and paid her money to keep quiet about the encounter.

Upon announcing his resignation from PTL on Thursday, Falwell said he hoped never to set foot on the property again. But he was to return Friday evening to talk to 750 major donors who had been invited earlier for a weekend fund-raising event.

Would Explain Resignation

Falwell originally hoped to raise $2 million to $3 million from the donors. Instead, he said, he will honor his obligation as host only to explain the circumstances surrounding his departure from PTL.

Falwell has his own ministry based in Lynchburg, Va.