home >> newsletter index >> MCA Newsletter  Summer 2009

Members for Church Accountability

From its inception Members for Church Accountability (MCA) has focused on the financial misadventures of SDA Church administrators. The plea has been integrity and transparency at all levels of SDA Church administration. As a result MCA sponsored a symposium in October 2001 entitled Who Watches? Who Cares? The next month MCA embarked on the process of publishing a book by the same title, a process involving an enormous amount of investigative research that spanned 6 years.

The symposium nor the book addressed yet another case of a financial misadventure by the General Conference that was evolving in the early years of the new millennium, specifically, the LifePoint, Inc. stock investment. LifePoint initially was incorporated in 1992 in the state of Delaware under the name of U. S. Drug Testing, Inc., a company that analyzed saliva for alcohol and a variety of drugs. A restated Certificate of Incorporation was filed in 2002 renaming the corporation LifePoint, Inc.

The Common Stock was listed for trading on the American Stock Exchange (“Amex”) Company Guide. The following is an excerpt from a DEF 14A SEC filing by LifePoint, Inc. on 8/18/2003.

The following table sets forth, as of July 10, 2003, certain information with respect to
(1) any person or entity which beneficially owned more than 5% of the Common Stock,
(2) each director of the Company, the Chief Executive Officer and (3) all directors and executive officers as a group.

Name and Address of
Beneficial Owner
Number of Shares of
Common Stock
Percentage of Shares
Common Stock
General Conference
Corporation of SDA
12501 Old Columbia Pike
Silver Spring, MD 20804
St. Cloud Investments Ltd.
2525 Michigan Ave., #A5
Santa Monica, CA 90404
Linda H. Masterson
1205 South Dupont St.
Ontario, CA 91761
Peter S. Gold
1205 South Dupont St.
Ontario, CA 91761
Paul Sandler
1205 South Dupont St.
Ontario, CA 91761
Charles J. Casamento
1205 South Dupont St.
Ontario, CA 91761
Stan Yakatan
1205 South Dupont St.
Ontario, CA 91761
Roger Stoll
1205 South Dupont St.
Ontario, CA 91761
All directors and
Executive Officers
as a group (8)

The percentages computed in this table are based upon 38,027,320 shares of Common Stock which were outstanding on July 10, 2003.

Many lay church members would challenge the wisdom of investing in a fledgling company, but what should be shocking to every lay church member is to extend to such a company a $10 million working capital line of credit! The following is the paragraph addressing this line of credit from the statement to the Security and Exchange Commission dated August 18, 2003.

“In November 2002, we obtained $2.5 million of a secured debt financing under $10 million working capital line of credit with our largest investor, the General Conference Corporation of Seventh-Day Adventists. In January 2003, this investor notified us that it was exercising its right to not extend the remaining $7.5 million under the credit facility. We believe that this investor took such action due to a change in its internal investment parameters and management and that this investor took similar actions with at least one additional small cap investment. The $2.5 million already drawn under the credit facility has remained in place in accordance with its terms. Under the credit facility, interest accrues at a rate of 16% per year, 6% of which is payable quarterly and 10% of which compounds quarterly and is payable at maturity, and all amounts outstanding are past due.”

LifePoint filed for bankruptcy on April 28, 2005.

It certainly would be appropriate for lay members to be informed on a number of issues:

1.  Under what church policy was the General Conference operating when it invested in a small private company?

2.  What was the purchase price of the 9,473,189 shares?

3.  Were the 9,473,189 shares sold prior to bankruptcy? If so, at what price?

4.  What church policy authorized the General Conference to operate like a bank and extend to LifePoint, Inc. a $10,000,000 line of credit?

5.  Did LifePoint, Inc. repay any portion of the $2,500,000 withdrawal on the $10,000,000 line of credit prior to bankruptcy?

It is unwise for lay church members to be complacent concerning SDA administrative financial misadventures and we urge all members to pressure church leadership at every administrative level to practice the transparency that they lay claim to.

Members for Church Accountability