Falwell’s College Avoids Foreclosure Threat

The Baptist college founded by The Rev. Jerry Falwell avoided another foreclosure threat by paying an overdue $1.1 million to bondholders Monday.

Falwell, founder and chancellor of Liberty University, paid up but called the threat “unreasonable and reckless” because it jeopardizes a possible bank loan of $7.5 million.

Liberty had asked bondholders to accept $7.5 million as full payment for what it calculates as a debt equal to twice that amount. The bondholders say the debt is more than $20 million.

A committee representing the 2,000 bondholders rejected the offer as too low and noted that no payment had been made for more than a year.

“The feeling among the bondholders is a very high level of frustration and mistrust,” committee spokesman Claude Ferebee said.

The bonds were issued in the 1980s by Falwell’s now-defunct Old-Time Gospel Hour television program to help fund rapid expansion at the university, which has 11,000 students.

But the university has struggled to pay them after the television program’s financial underpinning - viewer donations - was devastated by scandals involving other television evangelists.