CHURCH SETTLES WITH CREDITOR.(CAPITAL REGION)

Byline: ILAINA JONAS - Staff writer

Mount Moriah Ministries has emerged from Chapter 11 reorganization in bankruptcy court and will soon resume construction of its new Glenmont church, its attorney confirmed Thursday.

The church reached agreement earlier this week with its main creditor, John P. Flach, said attorney Lanny E. Walter.

"We have truly experienced the faithfulness of the Lord during the past two years," said the Rev. Stephen Giles, pastor of the church. The parish filed for protection from its creditors in 1991.

The filing froze construction of the massive 22,000-square-foot church on Route 9W, turning it into little more than a scaffolding-draped landmark for directions. The congregation now plans to finish the building from which it will operate Noah's Ark Day Care Center, a Christian academy for grades kindergarten through high school, a youth outreach center and a ministry to the homeless, Giles said.

The building itself was at the heart of a dispute that eventually lead to the bankruptcy court action and the division of the congregation that was once Mount Moriah Assembly of God in Alcove. Although two-thirds of the congregation supported the move from to Coeymans to Bethlehem, the remaining members were vehemently against the plan.

Among those who opposed the move was Flach, whose father founded the church. In addition to his filial affiliation to the congregation, he is also principal in Flach Development and Realty Inc. and Flach Industries Inc., which was awarded the contract to build the very church he opposed. When Flach did not win enough support to stop the church from moving, construction stopped in 1990, and he demanded payment for his work. The church protested, saying the $304,000 worth of work was supposed to be a gift. But Flach countered by filing liens against the work totaling $272,740.

That forced the church to file for a Chapter 11 reorganization in bankruptcy court to protect it from its creditors.

"The heart of the problem was Mr. Flach converted what were donations to the church into what he claimed were liens," Walter said. "We have resolved the differences."

Under terms of the resolution, Mount Moriah Ministries will repay $400,000 to Flach over the course of 13 years. In addition, the Bethlehem congregation will sell its part of the Alcove church to the church's congregation. Meanwhile, Flach will pay back the Bethlehem congregation's loan of $200,000 to Key Bank of Eastern NY.