December 16, 2002

Arizona convention settles with BFA Trust
___By Elizabeth Young
___Arizona Portraits
___PHOENIX (BP)--The Arizona Southern Baptist Convention has relinquished its claim to more than $1.2 million invested in the Baptist Foundation of Arizona as part of a settlement agreement with the Baptist Foundation of Arizona Liquidating Trust and investors in a class-action suit.
___The settlement also includes payment of $750,000 by the Arizona convention's insurance carrier.
___In return, the BFA Liquidating Trust and those involved in the class action will release all claims against the state convention related to the financial collapse of the foundation.
___Terms of the settlement were approved by the Convention Council of the Arizona Southern Baptist Convention.
___"We could have fought this in court--and our attorney believes we have a strong case," said Steve Bass, Arizona Southern Baptist Convention executive director. "As investors ourselves, we were as much a victim as anyone else. We trusted the professionals--the audit firm that issued clean opinions and the foundation president who made annual reports to our convention. None of these indicated a problem."
___However, the decision to settle was made so that investors could get as much money back as possible, Bass said.
___"Ultimately," he said, "the overriding desire of the convention was to have the insurance money used to benefit investors rather than be used to pay for legal costs."
___Convention leadership was concerned, he said, that some might perceive the settlement as an admission of guilt by the state convention. As a result, part of the settlement agreement states that the Arizona convention does not admit any responsibility for the foundation's collapse or for the failure to properly disclose information about the foundation's poor financial condition to investors.
___Much of the $1.2 million relinquished by the state convention was given through the years by Arizona Southern Baptists to the Willis Ray State Mission Offering. The funds were designated to help new churches pay back loans on land and buildings.
___The state convention's settlement is one of seven settlement agreements jointly filed with the court.
___Other settlements with the BFA Liquidating Trust involve Harold and Stephanie Friend, Dwain and Beva Hoover, Jalma and Carole Hunsinger, Alan and Becky Kuhn, the accounting firm of Nelson Lambson and the accounting firm of Henry & Horne.
___In total, the latest group of settlements will give the Liquidating Trust access to about $15 million.

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