OneUnited says Charles Street AME parent controls church’s assets

OneUnited Bank this week filed motions in the bankruptcy case of the Charles Street African Methodist Episcopal Church in which it alleges that the AME parent organization controls the church’s assets and has financial responsibility for its nearly $5 million in delinquent loans.

The bank also alleged that Charles Street AME was late on 46 out of 59 payments on a $1.1 million loan secured by the historic Roxbury church building. It also alleged that the church engaged in a pattern of “serious delinquency’’ that generated 17 foreclosure notices from OneUnited and cost it $18,595 in late charges.

The legal filings were the latest chapter in a simmering battle between the prominent black Boston church and one of the nation’s largest black-owned banks. Charles Street filed for Chapter 11 bankruptcy protection in March after months of failing to get the bank to renegotiate two loans that had come due.


Ross Martin, the church’s lawyer at Ropes & Gray, said Charles Street would file its response to the motions by Friday. He said the notion that the church didn’t own its own property was false. “The real estate records are crystal clear,’’ he said.

The bank argued that the First Episcopal District church, with net assets over $500 million, controls its member churches’ cash, and should bear ultimate responsibility for Charles Street’s loans on the church and on a community center it was rebuilding.

A lawyer for the district declined to comment.

Martin also said the church regularly paid its monthly loan bills and caught up when it was late. He said, “OneUnited willingly accepted late charges to pad their profit. Despite this record they complain of, they never took any action. It is bizarre that they complain now.’’

The bank objected to the church’s reorganization plan filed with the court, on a number of matters. In one instance, OneUnited opposed the church’s asking for a $1.5 million donation from the parent church to go directly to paying to finish construction on the community center. The bank also opposed the “flatly unreasonable’’ proposal to repay all the money over 30 years at an “unacceptably low interest rate’’ of 5.25 percent.


Martin said the church would object to the bank’s motion to offer its own plan for the bankruptcy before the standard 120 days from the original filing.


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