Nearly nine months after it sought Chapter 11 bankruptcy protection to avoid a foreclosure sale, Greater Salem Church has filed a reorganization plan that would see it forfeit two of its secondary properties.

While keeping its home church on Salem Church Road, Greater Salem would lose its “lake church” in Cornelius, as well as nearly 50 acres off Rozzelle’s Ferry Road. Those two properties would be handed over to the Evangelical Christian Credit Union in exchange for more than $3.8 million in debt forgiveness.

Greater Salem filed for bankruptcy protection in November 2010 after defaulting on a $5 million loan from the California-based credit union. Members previously told Qcitymetro.com that Greater Salem had used some of the loan proceeds to purchase the Cornelius church, which is currently being leased to a Montessori school.

If the reorganization plan is approved, Greater Salem would move one step closer to ending a painful era that saw its former co-pastors, Anthony and Harriet Jinwright, sent to federal prison for tax evasion. An IRS agent testified at the Jinwrights’ sentencing hearing that the couple failed to report more than $2.3 million in income between 1991 and 2008.

Witnesses testified at the couple’s trial that the Jinwrights lived lavishly from various forms of church income, even as Greater Salem slipped toward financial ruin.

Both Jinwrights have filed notices of appeal.

Court records show that Greater Salem claimed gross receipts of more than $1.6 million in 2008 and 2009, but that amount dipped to $557,450 in 2010, the year the Jinwrights were put on trial.

At the time of its bankruptcy petition, Greater Salem listed assets totaling $5.1 million and liabilities just shy of $5 million. Among the creditors listed as holding "unsecured nonpriority claims” was the Internal Revenue Service, which was owned $33,775. Under the reorganization plan, the IRS would be paid in full over five years. The tax agency would charge 6 percent interest on the outstanding balance.

Other debts not discharged in bankruptcy court would be paid in full over five years without interest.

Greater Salem would still carry a $1.3 million mortgage on its home church, which was once owned debt free. Tax records show the property valued at $1.5 million.

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