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Judge OKs PTL Restructuring, Tax Exemption

December 23, 1987|Associated Press

COLUMBIA, S.C. — A reorganization plan approved by a federal bankruptcy judge Tuesday will allow PTL to remain tax-exempt and provide for its "resurrection," the television ministry's trustee said.

The plan was modified Tuesday to give contributors more power and to give the Internal Revenue Service authority to fine-tune PTL's reorganization so it remains tax-exempt. Ministry officials said PTL's survival is dependent on donations and its nonprofit status.

The reorganized PTL will be a model of accountability for religious broadcasting companies across the country, said David Clark, the court-appointed trustee who will become PTL's board chairman when the plan takes effect May 2.

"This is the beginning of a whole new resurrection of PTL," he said.

Donations Key to Plan

Judge Rufus Reynolds of U.S. Bankruptcy Court said the plan's success hinges on the continued contributions of PTL donors. His approval is a benchmark for the ministry's effort to recover from the revelations of sex scandals and financial mismanagement that followed the resignation of founder Jim Bakker, who left March 19 after admitting a tryst with former church secretary Jessica Hahn.

Aside from an IRS claim for $62 million to $82 million, the ministry owes about $70 million and has assets of about $200 million, records show.

The reorganization plan divides PTL's activities into nonprofit and for-profit areas. PTL itself will be a nonprofit organization and will continue to run the television ministry. A for-profit subsidiary will run PTL's Heritage USA Christian vacation retreat, except for its church, in Fort Mill and the ministry's broadcast facilities.

Nine-Member Board

The plan will give contributors three seats on a nine-member governing board. The other six members will be Clark, two members appointed by the chairman and three creditors.

The board will be in charge until PTL's debts are paid, estimated to be five years or less. Then, the ministry and its assets will be turned over to PTL's "lifetime partners," or contributors of at least $1,000.

Clark said Tuesday that Bakker "has no role in PTL's future." Asked whether PTL will survive without the fund-raising ability of Bakker and his wife, he said: "This ministry would not survive with Jim and Tammy Bakker."

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