c. 1998 Religion News Service

GRAND RAPIDS, Mich. _ One year after IRM Corp. collapsed and stranded $25,000 of their savings, Leonard and Wilma Silvis occasionally fall into what’s become a familiar argument.

“We’ll never see it back,” says Leonard.

Wilma isn’t as pessimistic. She’d like to think the Christian Reformed Church and some of its wealthy members who also invested in the California real estate firm will help them get some of their money back.

“But I’m not holding my breath,” she says, sitting across from her husband in the living room of their waterfront condominium in Allendale, Mich.

That’s the way it is these days for hundreds of West Michigan residents who invested millions of their hard-earned retirement dollars with IRM, a company founded and run by prominent members of the Grand Rapids-based Christian Reformed Church.

For many of the elderly investors, one year of lost income and the uncertainty surrounding their investment has taken its toll. Some have cut back on expenses, others have picked up part-time jobs and at least one sold a house to make up for their failed plunge into IRM.

Oct. 27th marked the first anniversary of IRM’s announcement that after nearly 25 years of sending monthly checks to investors, it was suspending all principal and interest payments and loan payoffs for 30 to 45 days because of “certain cash flow deficiencies.”

At the outset of the bad news, church leaders, company officials and investors vowed to do their best to avoid protracted and expensive litigation in hopes of getting money back to investors as soon as possible.

Today, IRM is operating under the eye of a federal bankruptcy judge after the CRC leaders, individual investors and IRM’s principals ended up bickering over control of the company and its assets.

Jay Mol, Hudsonville, Mich., chairman of a court-appointed creditors committee, says it probably will be nine months to two years before investors see any of their money back. How much they’ll get back is unclear but most observers agree there won’t be full restitution.

IRM collapsed with more than $400 million in debt tied to 59 apartment complexes and office buildings worth about $270 million. Though the company had never missed a payment in its 25-year history, its lack of financial reporting left investors in the dark about the risks they were assuming.

IRM attracted more than $200 million in loans and partnership investments from individuals, most of them members of the CRC, having been sold on IRM by Jay Morren, IRM’s charismatic salesman and a pillar of the CRC church.

Some investors say Morren used his church connections and the fact that church agencies were heavy investors to sell them on the safety of investing with IRM. Morren says he was unaware of IRM’s shaky financial condition and invested his own money and his family’s money in IRM right to the end.

But no matter why they invested, many of those who put their faith in IRM are now having to adjust.

Leonard and Wilma Silvis say they are able to get by without their $25,000 because they live a simple lifestyle without debt. But they still worry about the future. Leonard, 74, has been diagnosed with Parkinson’s Disease, and Wilma, 64, has a neurological disease which limits her dexterity.

Leonard, a retired building contractor, says he picked up some extra income by helping supervise some home construction projects. Wilma works as a supermarket demonstrator when she can.

Herb Vanek, a 69-year-old retired graphic artist from Berkeley, Calif., was forced to sell his house about six weeks ago when he could no longer afford the mortgage payments.

Vanek invested $260,000 with IRM in 1986 and had planned to use the money to buy the house. He took out a mortgage instead in April 1997 after IRM officials convinced him his money was safer with them.”Foolishly, I put most of my eggs in one basket,”said Vanek, who now lives in an apartment building he owns. “As far as I’m concerned, it’s lost and I’m just going to go on with my life.”

About 1,500 investors have similar stories to tell. While most weren’t financially ruined, many have had to make major lifestyle adjustments.

Some investors are suffering deeply, says Mol, who with other wealthy IRM investors has created a foundation to help them.

So far, Mol says, they have helped fewer than 50 investors, most of whom were referred to the group. Last week, the group adopted a formal charter for “The Hardship Assistance Fund.” (P.O. Box 524, Jenison, Mich., 49529-0524.)

In July, the CRC’s Synod, its top governing body, urged deacons in its individual congregations to be aware of the financial disaster that may have befallen some of their members.

While the sides feuded, pressure continued to build on IRM until the threat of foreclosure forced the company to file for Chapter 11 bankruptcy protection in August.

Now the company is being run by a new court-appointed chief executive whose mission will be to get the highest price for the company’s assets.

Mol is chairman of the creditors’ committee representing IRM investors. The church agencies are also represented on the committee.

Mol says he’s growing weary of the battles but won’t abandon them. “I’m spurred on by the people who are in hardship and the people whose lifestyle will be affected,” he says.

DEA END HARGER