MEMPHIS, Tenn. — A new lawsuit against the troubled Global Ministries Foundation may indicate a larger warning about major financial trouble for the non-profit.
There hasn’t been recent week that’s gone by where GMF hasn’t made headlines.
It’s listed several of its properties for sale across the southeast including three in Memphis.
We recently uncovered audits with questionable book keeping there’s the battle with HUD, local code enforcement violations and now a bank said GMF dropped the ball on required payments and possibly pocketed money it shouldn’t have.
According to the suit, the non-profit accused of allowing tenants to live in filth, hasn’t held up its end of the bargain with the bank that serves as the trustee for its bonds.
The loan agreement between GMF and the bank requires the non-profit to deposit all of its project revenue, and the Bank of New York Mellon said that hasn’t happened.
In fact, the bank said, despite being paid by HUD, GMF hasn’t made any payments since the feds pulled money from Warren and Tulane.
The lawsuit also revealed GMF deposited an insurance check into its own account after a fire at Warren last summer, despite being required to notify the bank first and put that money into its account.
It’s also unclear whether those units were ever repaired after the fire.
We showed Memphis Mayor Jim Strickland a copy of the lawsuit.
“My first, gut reaction is that may be good, because Global Ministries has obviously been a very bad landlord to the tenants and the Memphis community as a whole,” he said.
But even if Warren, Tulane and Goodwill sell, GMF still owns several other properties in Memphis, and with the non-profit clearly being in a financial bind, that could signal even more trouble.
“That’s on our radar screen. We are monitoring those other pieces of property on a local level. We’ve talked to the feds to request that if they are going to pull the federal money, they give us more advance notice than they did on Warren and Tulane.”
At this time, no hearing dates have been set on that case.
The bank is asking the court for an injunction, and, in addition to getting the money its owed, the bank wants another real estate company to step in as a “receiver” to handle business at Warren and Tulane.
GMF CEO Richard Hamlet emailed WREG saying, “We disagree with many of the allegations in the complaint, and will respond accordingly when we file our answer.”
He also said GMF will continue to work with HUD and the bank to help find a new owner.
