Ugly Battle Between Bank and Synagogue Plays Out In Bankruptcy Court

Yesterday's Palm Beach (FL) Post reports on a rather ugly battle between a Chabad synagogue in Boynton Beach, Florida and Stonegate Bank that made the synagogue a $3.8 million loan in 2007 that was supposed to have been used to expand Chabad's campus. Chabad sued the bank in 2009 alleging that it failed to follow through with additional promised financing. In October, Stonegate Bank responded by filing suit to foreclose on the synagogue's assets (including its Torah scrolls and its members' pledges) to obtain repayment of the loan. In June 2010 the synagogue filed for Chapter 11 bankruptcy protection, which normally suspends lawsuits. However now the Bank has asked the bankruptcy court to allow it to proceed with the foreclosure action, arguing that the synagogue's bankruptcy petition was filed in bad faith.  The bank's motion to allow it to proceed was filed on Rosh Hashanah. A hearing on the motion is scheduled for Sept. 24, which is the Jewish holiday of Sukkot.  The synagogue's lawyer says the Rosh Hashanah filing was particularly disrespectful, and threatens to have a chilling effect on pledges that members usually make during this week's Yom Kippur holiday because those pledges are at risk of being diverted from Chabad to the Bank.