Visiting Assistant Professor of Law Pamela Foohey has managed an unlikely two-fer: she was subjected to an in-depth interview with me that was recorded as a podcast and now she's featured in a brief interview in the online version of Christianity Today here.
The differences between church bankruptcies and small business bankruptcies she's noted are interesting. In brief, churches often file a Chapter 11 bankruptcy while there's "still time." In other words, they often have equity in their property and bankruptcy can be used to get on track with payments or as a forum for an orderly sale of church assets. Small businesses, on the other hand, are usually mortgaged to the hilt by the time they file under Chapter 11. Typically there's nothing left around which to reorganize and no equity left after a sale of assets. Thus, most small business bankruptcies amount to nothing more than a way for secured creditors to liquidate their collateral. There's not much good in bankruptcy for the small business anymore.
But churches need more than equity in their property to emerge from a Chapter 11 bankruptcy successfully. They need committed leaders and a faithful congregation. American churches are often a community's only living example of de Tocqueville's "small platoons" where people are bound together by something other than the prospect of economic gain. Slogging through a church's bankruptcy is no fun and cannot be attributed to a hope to get one's money back in the future. Instead, it is generally an example of a sense of reciprocal covenantal obligation, something that's far too rare today.
The differences between church bankruptcies and small business bankruptcies she's noted are interesting. In brief, churches often file a Chapter 11 bankruptcy while there's "still time." In other words, they often have equity in their property and bankruptcy can be used to get on track with payments or as a forum for an orderly sale of church assets. Small businesses, on the other hand, are usually mortgaged to the hilt by the time they file under Chapter 11. Typically there's nothing left around which to reorganize and no equity left after a sale of assets. Thus, most small business bankruptcies amount to nothing more than a way for secured creditors to liquidate their collateral. There's not much good in bankruptcy for the small business anymore.
But churches need more than equity in their property to emerge from a Chapter 11 bankruptcy successfully. They need committed leaders and a faithful congregation. American churches are often a community's only living example of de Tocqueville's "small platoons" where people are bound together by something other than the prospect of economic gain. Slogging through a church's bankruptcy is no fun and cannot be attributed to a hope to get one's money back in the future. Instead, it is generally an example of a sense of reciprocal covenantal obligation, something that's far too rare today.
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