A Tennessee megachurch has filed for bankruptcy and disclosed millions in debts, following scandal concerning Pastor Tavner Smith’s alleged sexual misconduct, federal court filings show.
Venue Church in Chattanooga filed for Chapter 11 bankruptcy Tuesday in U.S. Bankruptcy Court for the Eastern District of Tennessee. Its bankruptcy petition shows the church has more than $3 million in mortgage, auto loan, and credit card debt.
The church has less than $5 million in assets, even counting its $4.5 million church building, according to the filing.
Tom Bible, the attorney representing Venue Church in the bankruptcy, didn’t immediately respond when The Roys Report (TRR) asked why the church had decided to file for bankruptcy.
But the filing shows a massive drop in revenue over the last two years. And the bankruptcy filing puts a temporary stop to foreclosure proceedings on the Venue Church building, reported earlier by TRR.
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Bible reportedly told the Chattanooga Free Press that the church intends to pay off its debts in full, even if that means selling the building.
That’s a different message than Smith communicated less than three weeks ago. He had pledged that the church would stay put, TRR previously reported.
The filing also identifies, for the first time, the former church governing board members who had reportedly quit in 2021.
Venue Church was reportedly a former member of the Association of Related Churches (ARC), one of North America’s biggest church-planting organizations. As TRR has previously reported, ARC is known for restoring and re-platforming morally fallen pastors. Current and past ARC member churches, including Venue Church, have faced multiple scandals involving money or sex.
ARC’s style of church governance generally puts other megachurch pastors, which it calls “overseers,” in charge of holding a lead pastor accountable.
Ron Carpenter of Redemption Church in San Jose, California, was chairman of the Venue Church board. Steven Furtick of Elevation Church in Charlotte, North Carolina, and Benny Perez of ChurchLV in Las Vegas, Nevada, were the other two board members.
Carpenter has links to ARC, but no formal association.
Carpenter founded Redemption Church in Greenville, South Carolina. In 2018, John Gray—who as recently as April 2022 served on ARC’s Lead Team—took over Redemption Church and renamed it Relentless Church. Now Gray, who’s repeatedly been accused of sexual misconduct, is embroiled in a legal dispute with Carpenter over the property.
Another former Venue board member is Ron Phillips, lead pastor of Abba’s House in the Chattanooga area. The filing lists him as a board member from September 2021 through January 2022. The Chattanooga Free Press has reported Phillips resigned in early February.
A few months after Phillips resigned, Venue Church sold an LED display wall to Abba’s House on June 20 for $40,000, according to the bankruptcy filing. That same day, the filing shows, Venue Church paid Tavner Smith a total of $15,000—$10,000 for a loan repayment and $5,000 as a pass-through from Abba’s House.
While the transactions took place on the same day, there’s no explicit link between them. Venue Church’s bankruptcy attorney didn’t immediately respond when TRR asked for clarification.
What goes up must come down?
Smith launched Venue Church 10 years ago. In just three years it had swelled to 2,000 attendees across six Sunday worship services, becoming the seventh fastest growing church in the country.
Venue Church bought its current building in late 2019. In 2020 during the COVID-19 pandemic, the church received more than $3.1 million in revenue, including a $141,691 loan that was forgiven through the federal Paycheck Protection Program.
But in late 2021, Smith was accused of kissing a woman who wasn’t his wife. Eight church staffers quit over the allegations, TRR previously reported. Then Smith went on a short sabbatical early this year before returning to preaching a month later.
Attendance has reportedly fallen steeply since the scandal broke. Revenue shrank to just over $2 million last year, the bankruptcy filing shows. And Venue has brought in less than $600,000 this year as of August 23.
Debts include auto loans, credit cards, vendor bills and back taxes
Venue Church now has less than $500 in the bank, according to its bankruptcy filing. Its other non-real estate assets include more than $180,000 in furniture, office and cleaning equipment, musical instruments, and audio/visual and lighting gear. The church also owns a Ford F-150 and a Chevrolet Suburban, both with about 110,000 miles on them.
Besides its mortgage, the church’s debts include about $53,000 owed on the two vehicles, plus another $12,000 of debt it carried over from a vehicle it used to own but was underwater on, the filing shows.
Venue also owes nearly $8,000 to the city of Chattanooga and more than $2,200 to Hamilton County, according to the filing. Government records show that is for back taxes and stormwater fees.
Credit card debt amounts to nearly $90,000, the bankruptcy filing shows. Debts to various business vendors and Tavner Smith’s ex-wife make up the rest of the church’s indebtedness.
Smith’s ex-wife Danielle Smith, who had also worked for Venue Church, sued the church in July alleging breach of contract, Hamilton County Circuit Court documents show.
She claims in a court filing that Venue Church owes her monthly payments under an exit agreement, but missed the last three months of payments. She also claims the church was supposed to transfer her vehicle’s title to her name only and failed to do so.
How much Venue Church owes Danielle Smith isn’t stated either in the church’s bankruptcy filing or in Danielle Smith’s court complaint. Tavner Smith denied the breach of contract claims in a pro se response on the church’s behalf.
This story has been updated to correctly state the date of filing and the location of Redemption Church, which is in South Carolina, not North Carolina.
Sarah Einselen is an award-winning writer and editor based in Texas.