New Era Bankruptcy Case Moves Toward Resolution

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A solid majority of organizations-both those that gained and those that lost money as a result of last year's collapse of the Foundation for New Era Philanthropy-have registered their support for a unique settlement agreement designed to resolve the controversy without costly litigation.

The agreement was developed by the Evangelical Council for Financial Accountability (ECFA) on behalf of the ad hoc group United Response to New Era. If all goes according to plan, organizations that lost money could receive as much as 65 percent of it back by year's end.

The plan requires the support of organizations representing at least 80 percent of the money lost to New Era. It also calls for the endorsement of donors representing at least 80 percent of the amount given to New Era with the misguided expectation that their gifts would be doubled by wealthy, and apparently nonexistent, anonymous donors.

AGREEMENT PROPOSED:

According to ECFA President Paul D. Nelson, the percentage of support now stands at close to 90 percent, both for organizations and donors. At a two-day hearing last month in Philadelphia, the plan-with the full endorsement of bankruptcy trustee Arlin Adams-was presented before Bankruptcy Court Judge Bruce Fox.

Nelson described the hearing as "an impressive display of a unified effort by strikingly diverse interests." He said, "One attorney after another stood to voice support for the plan. They called it 'fair,' 'creative,' and 'landmark.' "

If the plan is approved, organizations that profited from New Era would have two months to return a total of $39 million for redistribution among those that lost money. Nelson says he is optimistic, but adds that a ruling in favor of the plan is not a "slam dunk." The greatest threat, ...

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