November 16, 2004

INDIANAPOLIS - The Christian Church (Disciples of Christ) has filed a motion to enter into the bankruptcy proceedings of the National Benevolent Association (NBA).

The church's Administrative Committee unanimously agreed on Monday, Nov. 15, to seek a role as a party of interest in the bankruptcy proceedings. The Administrative Committee is responsible for regular review and evaluation of the budgetary procedures, missional goals and board memberships of the church's 11 general administrative units, which includes NBA.

The church's motion must now be approved by the US Bankruptcy Court for the Western District of Texas in San Antonio, Texas.

NBA, the social and health services division of the church, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in February. The St. Louis based not-for profit has operated at more than 90 locations in 20 states, and served approximately 20,000 people through residential programs, day care centers, counseling services and other programs.

An auction of NBA's 11 senior living facilities is set to take place in New York City on Thursday of this week. The sale of the facilities may bring in as much as $210 million to help repay creditors.

"We felt that this was an appropriate time to be named as a party of interest in the bankruptcy litigation," stated Wm. Chris Hobgood, the General Minister and President of the Christian Church (Disciples of Christ). "The church has had a covenant with NBA since its beginning in 1887, during which time NBA has fulfilled its mission. But we now feel that with so many aspects of NBA's ministry changing, it is important that we sit at the table to help discuss NBA's future."

In addition to the pending sale of its 11 senior living facilities, NBA has sold or leased three of its six children's ministries.

Hobgood noted that the decision to enter the case comes after months of internal discussion.

"Our action is timely," said Hobgood. "Because of our long-standing covenant with NBA and the trust that has been maintained, we chose to wait as long as possible before taking action with the hope that NBA's management and board would be successful in emerging from their bankruptcy with their mission and ministry still clearly in place. But it now appears that NBA's services to children, seniors and families may be significantly reduced, a change that is of great concern to many people."

Church officials note that numerous attempts have been made to engage NBA in meaningful dialogue about the implications of the bankruptcy filing. Both groups attempted to enhance lines of communication following the church's biennial General Assembly in October 2003. A task force was put into place, and issues were discussed several times by conference call, although no face-to-face meetings were held. A mediator for the two parties was named in April of this year, but the two sides remained unable to find appropriate times to schedule mutually acceptable meetings.

"Although it's unclear what NBA's role will be in the future, it is clear that God calls us to be faithful servants who help those least able to help themselves," said Hobgood. "We believe entering into the litigation process is a way to honor the trust placed in the Christian Church (Disciples of Christ) by the countless donors, friends, and employees who throughout the years have given so generously of their time and resources to this vital ministry."

Hobgood stressed that, while the church has no legal control over the business practices of the NBA, that he intends to be proactive about representing the interests of the church's membership in the future legal proceedings. Funding for the church's legal costs have been paid for with donations received for this specific purpose.

"Our actions should not be interpreted as a refutation of any part of NBA," said Hobgood. "We care deeply for the people who work for at NBA as well as those who live in NBA facilities. We will continue to keep everyone concerned in our prayers."

NBA is one of 11 general units of the church. The units carry out various aspects of church ministry, ranging from the promotion of higher education to administration of the church's pension fund. Each unit operates with considerable autonomy, under the leadership of its own president and under the governance of its own board of directors. Units maintain a covenantal relationship with the general church. For more information on the Christian Church (Disciples of Christ) and the general units visit: http://www.disciples.org/.

A question and answer about the church's role with the NBA bankruptcy proceedings is follows:

National Benevolent Association Bankruptcy:
Questions and Answers from Chris Hobgood,
the General Minister and President

1. Q: What is the relationship of the National Benevolent Association to the Christian Church (Disciples of Christ)? Aren't they one and the same?

A: In corporate terms, NBA could be considered an "independent affiliate" of the Christian Church (Disciples of Christ). In our denomination, historically, the different components of our faith - congregations, regions, institutions of higher education and general ministries maintain organizational and financial independence from each other. NBA is one of those units.

2. Q: Were there Christian Church (Disciples of Christ) representatives on the NBA Board when difficulties began with NBA's financial status?

A: Yes, all members of that Board are Disciples. The Office of General Minister and President serves, ex-officio, on the NBA board as well. Previously, this role was filled by the Associate General Minister and Vice President. Since Bill Edwards' move, the General Minister and President has represented the church on the NBA Board.

3. Q: Is NBA accountable to the Christian Church (Disciples of Christ) in any way?

A: Each unit, such as NBA, is accountable to its own board of directors and trustees. Each ministry shares financial information. The denomination does not have decision-making authority over the individual units or regions. However, the General Board's Administrative Committee is responsible for the regular review and evaluation of the budgetary and promotional procedures of the 11 general units.

4. Q: Why did the denomination wait so long to enter the bankruptcy proceedings?

A: The Christian Church (Disciples of Christ) has had a long-term covenantal relationship with NBA since its beginning in 1887. During that time, NBA consistently carried out its mission of helping children, seniors and families in need.

But as NBA's reorganization plans have progressed, many aspects of their ministry appear to be changing. The denomination feels it is in the best interest of those being served by NBA, as well as our members and donors, to have a seat at the table to discuss the future of NBA.

5. Q: Could or should the denomination have stepped in earlier to avoid the situation?

A: Our role in this situation has been a process that began with being primarily focused on intentional, covenantal, support of the board and staff of the NBA. We are now in a role that is more focused on honoring and protecting the ultimate ministry of the NBA and the trust of donors who have made a variety of gifts to their ministries.

Church officials made numerous attempts to engage NBA in meaningful dialogue about the implications of the bankruptcy filing on several occasions. After the church's biennial General Assembly in October 2003, a task force was put into place and issues were discussed on several conference calls. No face-to-face meetings were held. A mediator was named in April of 2004 but we were unable to find appropriate times and resources to schedule mutually acceptable meetings.

6. Q: Is the Christian Church (Disciples of Christ) financially at risk due to the NBA bankruptcy?

A: No. NBA is legally separate from all other units of the church and their debts are secured only by the assets of NBA.

7. Q: How will the NBA bankruptcy affect the financial condition of the Christian Church (Disciples of Christ)?

A: There should not be much of an impact. It should be noted that NBA derived almost 97 percent of its budget from service fees, investments, and other sources apart from the church.

8. Q: How will the Christian Church (Disciples of Christ) continue its mission to serve those who have the greatest need?

A: We're looking at a number of things. If NBA is unable to carry out its mission of serving the physical, emotional, mental and spiritual needs of people in need, the church may need to develop ways to continue those services. At this point, we don't know what form of ministry that might take.

9. Q: What do you tell people, especially those who may live in NBA facilities, the families, or others who may be concerned about the future of NBA?

A: We are all feeling the deep grief as a result of the current situation at NBA. We know that there are people whose circumstances will change because of the sale or transfer of NBA properties. Our prayers are with them, as they confront these changes, and our wishes are for a smooth transition to other services.

But even though NBA is experiencing difficult times, the Christian Church (Disciples of Christ) will continue its ministry of "serving the least of these," regardless of the outcome of the legal and financial issues that now confront NBA.

Christian Church (Disciples of Christ)