The two-decade $21 million bankruptcy case of a Yates County religious operation for troubled teens is over almost.
Thursday, retiring U.S. Bankruptcy Judge John Ninfo, handling his last docketed case, ordered that Freedom Village complete the bankruptcy plan with final payments to unsecured creditors. The ministry also owes about $170,000 in unpaid fees to the U.S. Trustee, which helps manage bankruptcy plans.
"It's been a long road," Ninfo said.
"Lots of things weren't done right. But in the end, creditors will get the distribution that was set out for them with the (bankruptcy) plan."
Headed by the evangelical Pastor Fletcher Brothers, Freedom Village pulled in millions of dollars in contributions and loans from supporters in the 1980s while the ministry swelled in size and mission.
However, as thousands of pages of bankruptcy filings detail, Freedom Village also plowed through far more money than it raised. Brothers was accused of living an extravagant lifestyle with bodyguards and use of a private plane that greatly contrasted with the ascetic accommodations for his staff.
Supporters who signed up for the loan program, which claimed at least a 14 percent return was likely, found themselves unable to recoup their money, and Freedom Village declared bankruptcy in 1990.
Freedom Village attorney David MacKnight contended in bankruptcy court Thursday that past Freedom Village financial managers, and not Brothers, had been at fault.
Their negligence, he alleged, led to a failure in recent years to make progress with the bankruptcy payments.
"Pastor Brothers relied too heavily on the financial management in which he had great confidence," MacKnight said.
Money was typically reinvested in programs for the teens at Freedom Village, MacKnight said.
"It's generally used for the church's charitable and religious enterprises," he said.
Through the years, some creditors have died. Others, still supportive of Freedom Village, decided the money owed them through the bankruptcy plan could instead be returned to the ministry.
Attorney C. Bruce Lawrence, who represents the agent handling disbursal of the bankruptcy funds, said there is about $800,000 now to be used for payments.
On Thursday, Ninfo gave Freedom Village until June 29 to complete payments.
Otherwise, the case would be dismissed, which could open Freedom Village to judgments that were outstanding two decades ago.
Creditors will receive between 15 and 20 cents for each dollar they lost.
Lawyers and courtroom observers applauded Ninfo as he left the bench Thursday, completing his final courtroom case.