Glorieta leaseholders seek damages

Kirk and Susie Tompkins of Little Rock, Ark., allege LifeWay lacks authority to dispose of the conference center without the approval of messengers at two consecutive annual meetings of the Southern Baptist Convention.

By Bob Allen

An Arkansas couple who own a house on leased land at Glorieta Conference Center have sued LifeWay Christian Resources and numerous other parties for $12.4 million, accusing the Southern Baptist publishing house of fraud.

Kirk and Suzie Tompkins of Little Rock, Ark., claim the Southern Baptist Convention entity based in Nashville, Tenn., lacked legal authority to divest the Glorieta Conference Center near Santa Fe, N.M., to a new nonprofit corporation called Glorieta 2.0 for a $1 price tag.

They seek $400,000 in damages for loss of their retreat residence and $12 million to be divided among the 65 or so homeowners who built or purchased private residences on Glorieta property beginning in the 1950s, secured by what they believed to be a recurring lease.

Those leases became void when the new owners offered options of a one-time buyout for a maximum payment of $100,000, a new 12-year lease that ends with the building going to Glorieta 2.0 for no compensation or donating the building outright to the new owners.

glorietaFurther, they allege that as recently as 2011 LifeWay approached individuals about purchasing previously owned cottages, “attempting financial gain with impunity using a lease known to be voidable.”

The complaint cites a 2009 Baptist Press article quoting an official denying rumors that Glorieta was closing as saying: “We’ve been here for more than 50 years, and we believe the changes we are making will position Glorieta for the next 50 years.”

Supporting documents describe other leaseholders who claim they were caught by surprise this year when LifeWay unloaded the 2,400-acre retreat center opened in 1952, and which had reported losses 24 of the last 25 years.

John Yarbrough, a retired Southern Baptist minister and one-time home missionary, said more than 10 years ago he responded to an appeal by LifeWay to invest in a “new” Glorieta by purchasing a $150,000 home in need of repair. If Glorieta were ever sold, he claims he was told, “I would receive a fair market value for my retirement investment.”

Yarbrough said he felt “suckered” in 2011, when LifeWay CFO Jerry Rhyne responded to a question about whether any LifeWay employees own homes at Glorieta by saying, “I would never have signed that lease.”

One couple, ages 76 and 72, said they had intended for the home they purchased eight years ago for $155,000 in cash to pass to their children after their deaths.

Another admitted to failure to subject the lease to close scrutiny by an attorney when they invested their life savings to buy their home in 2007, because they joined “other, wiser Christians … in believing that Glorieta would continue its 60-year history of recurring lease agreements.”

Both of them are now out of work, as their jobs were dissolved in a Glorieta downsizing and their duties turned over to summer interns and volunteers.

The Tompkinses filed a second amended complaint Sept. 18 asking a U.S. district judge in New Mexico to block transfer of the property, claiming the Southern Baptist Convention constitution and bylaws require a vote at two consecutive annual meetings for the liquidation of a convention entity. They claim LifeWay officials fraudulently claimed authority to dispose of property that wasn’t theirs to sell.

Augie Boto, executive vice president and general counsel for the SBC Executive Committee and an attorney of record in the lawsuit, said the Glorieta property belongs to LifeWay, and that the two-year vote would apply only if LifeWay wanted to liquidate all or most of its assets.

Marty King, director of corporate communications for LifeWay, said it would be inappropriate to comment on pending litigation “except to say that we expect a favorable outcome and to reiterate that LifeWay had proper deeds to all of Glorieta, and Southern Baptist Convention approval was not required for the transaction.”

The Tompkinses claim their retreat home is worth at least three times the buyout offer. They say leaseholders are expected to “roll over” and “accept pennies on the dollar” for their homes in order to “allow a non-SBC entity [to] take possession of property having a realty value in excess of $40 million to convert and do with as they please without SBC approval.”

They claim the real reason that SBC officials don’t want the matter to come up at the annual meeting is because they fear “a minority/majority report presented at convention … calling for an investigation of LifeWay’s fiduciary failures, illegal activities and misappropriations” related to Glorieta.

Yarbrough compared LifeWay’s treatment of Glorieta leaseholders to Enron, a Houston energy company that went bankrupt in 2001 after an accounting scandal that caused shareholders to lose $11 billion.

Ken Camp of the Baptist Standard contributed to this report.