Vision2Systems: Liquidation Plan Confirmed Over U.S. Trustee Opposition

When Vision2Systems LLC filed for chapter 11 protection in the Northern District of Texas on February 19, 2025, the Dallas-based church-giving technology company was no longer operating and had no employees. The day after the petition, it opened an adversary proceeding against its own customers—churches that had used the company to process their congregants' tithes—and within three weeks obtained a preliminary injunction shielding its two principals from veil-piercing and fraud claims. The U.S. Trustee twice tried to wrest the case away, moving to appoint a chapter 11 trustee and to convert the case to chapter 7. The court denied both and confirmed a five-class liquidation plan on January 23, 2026.

Debtor(s)	Vision2Systems LLC
Headquarters	Dallas, Texas
Industry	Fintech / Church Payment Processing
Petition Date	February 19, 2025
Court	U.S. Bankruptcy Court, Northern District of Texas (Fort Worth)
Case Number	25-40583-MXM-11
Judge	Hon. Mark X. Mullin
Plan Type	Second Amended Chapter 11 Plan of Liquidation
Confirmation Status	Confirmed (January 23, 2026; effective February 9, 2026)
Adversary Proceeding	25-04030 (filed day after petition)
Debtor's Counsel	Spencer Fane LLP
Committee Counsel	Munsch Hardt Kopf & Harr, P.C.
Claims Agent	Stretto, Inc.
Table: Case Snapshot

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Church-Giving Platform and the Margin-Account Collapse

Vision2Systems was formed in 2012 in connection with Saddleback Valley Community Church and offered the "Vision2" platform for online giving, people management, and stewardship, according to the first day declaration of Paul Baldwin. The platform processed credit-card, ACH, and check transactions and then pushed donor funds out to church customers. By the petition date the company served roughly 325 churches, had ceased operating, and employed no one.

The company's Crunchbase profile describes the Vision2 Fundraising CRM as a SaaS product offering profile management, gift entry, payment processing, revenue accounting, and marketing analytics, aimed at smaller and mid-sized congregations. Vision2Systems competed in a market that has shifted heavily toward digital donations: according to Ministry Brands' 2025 State of Church Giving report, digital giving now makes up 42% of total church donations, and Vanco reports that the share of churches offering online giving rose from 14% in 2011 to 74% by 2025. The global church management software market reached $272 million in 2024, according to Straits Research, with payment processing vendors competing for congregations accelerating their shift from paper checks to digital platforms.

Vision2Systems sat between donors and churches by holding contributions in pooled FBO ("For Benefit Of") accounts—a structure that lets a company manage funds on behalf of others without taking legal ownership, and that fintechs use to avoid money-transmitter licensing in many states. As Stripe explains, platform payments are gathered into a pooled account, kept separate from the processor's own operating funds, and then paid out to the end recipient after checks clear. Whether the donation money sitting in those accounts is property of the bankruptcy estate or property of the churches became a recurring question across the case, surfacing in the U.S. Trustee's conversion motion and in the plan's treatment of "labeled" FBO funds.

The margin account and the road to chapter 11. Baldwin's declaration traced the collapse to two failures. A processor transition in October 2023 disrupted ICL transactions for roughly two weeks, triggering customer attrition and worsening cash flow. More fundamentally, the company had for nearly a decade used a "margin account" that advanced transaction funds before they cleared, a practice that masked reversals and caused Vision2Systems to over-settle donations to hundreds of churches over that period.

Those accounting failures produced a wave of prepetition litigation. The declaration identified at least four major suits—brought by Saddleback Valley Community Church, The Crossing Church, the Resurrection Metropolitan Community Church of Houston, and Christian Fellowship Church—asserting breach of contract, breach of fiduciary duty, fraud, unjust enrichment, and veil-piercing theories that reached non-debtor principals Paul Baldwin and Carl Tierney. One of those churches, the Resurrection Metropolitan Community Church, alleged the company held and refused to transmit more than $20,000 of its donations between June and August 2024 and brought claims under the Texas Deceptive Trade Practices Act, which treats service purchasers such as churches as "consumers" and authorizes treble damages for knowing violations. The veil-piercing claims against Baldwin and Tierney reached non-debtor principals, and the debtor moved to enjoin them the day after filing.

Capital Structure and the CGC Blanket Lien

Two prepetition secured facilities sat atop the debtor's balance sheet. CGC Royalty Investments IV, LP held a Secured Promissory Note for up to $2,800,000, with an initial loan of $2,300,000, and asserted that the debtor owed it approximately $3.9 million as of the petition date; CGC's debt was secured by a blanket lien on substantially all of the debtor's tangible and intangible property, including accounts, software, source code, copyrights, and patent rights, according to its Notice of Interest in Cash Collateral. The U.S. Small Business Administration held a second loan of roughly $500,000 over office property and intellectual property, but a Subordination Agreement dated on or about February 16, 2022 made CGC's liens senior to the SBA's, as reflected in the debtor's amended schedules.

The estate had little to fund a reorganization. The monthly operating report for the period ending February 28, 2025 listed total assets of $210,859 against total liabilities of $7,902,535, with beginning cash of $45,731, no receipts, and $2 of disbursements. The estate's largest potential asset was not cash but litigation: the debtor's amended schedules valued its causes of action against former churches and others at up to $6,360,317, a figure the U.S. Trustee's conversion motion flagged against $2,208,074.74 of scheduled secured claims and $5,875,948.41 of general unsecured claims. CGC, in its cash-collateral notice, stated that it did not consent to use of its cash collateral absent agreement or court authorization. The case never involved debtor-in-possession financing; the non-operating estate funded its wind-down from existing cash and from litigation and contract proceeds rather than new postpetition borrowing, as the debtor's confirmation brief later described.

Same-Day Adversary Proceeding Against Church Customers

On February 20, 2025, the day after filing, Vision2Systems opened Adversary Proceeding No. 25-04030 and sought an emergency preliminary injunction to stop churches and other defendants from pursuing alter-ego, veil-piercing, fraudulent-transfer, and successor-liability claims against Baldwin and Tierney. The debtor argued those claims belonged to the estate or threatened to deplete it through piecemeal litigation, collateral-estoppel risk, and diversion of resources, and asked that the injunction run until plan confirmation or case dismissal.

Saddleback objected to the temporary restraining order and injunction, arguing the debtor had admitted failing to remit millions in donations and that the relief would shield non-debtor insiders from church fraud and fiduciary-duty claims. The court nonetheless entered the preliminary injunction on March 11, 2025, barring actions against the non-debtor affiliates on claims tied to debtor liabilities while the chapter 11 case proceeded.

Such relief draws on Section 105(a), which lets bankruptcy courts issue orders to carry out the Code, and may extend to non-debtors where litigation would cause the debtor irreparable harm. Following the Supreme Court's Purdue Pharma decision in June 2024—which barred nonconsensual, nondebtor releases as a permanent remedy—courts have continued to grant preliminary injunctions to nondebtors under the traditional four-factor test. Purdue also framed the later objections to the plan's release structure at confirmation.

Alongside the adversary fight, the debtor sought routine first-day relief. It moved to reject the nonresidential lease for its Dallas office, applied to employ Spencer Fane LLP as bankruptcy counsel—approved by order on May 13, 2025—and applied to retain Stretto, Inc. as claims and noticing agent. Because the estate was not operating, the case carried none of the cash-management, payroll, or vendor motions typical of an operating chapter 11.

Conversion Push, Committee, and Rule 2004 Discovery

On April 11, 2025, the U.S. Trustee moved both to convert the case to chapter 7 and to appoint a chapter 11 trustee. The motions argued the debtor had stopped operating before filing, was using chapter 11 mainly to centralize church litigation, and carried unresolved conflicts because Baldwin and Tierney were insiders and co-defendants in the underlying suits. The conversion motion cited the amended schedules' $2,208,074.74 of secured claims and $5,875,948.41 of general unsecured claims, and noted the debtor valued its own litigation claims at up to $6,360,317. Under 11 U.S.C. § 1104, a court must appoint a trustee "for cause," including fraud, dishonesty, or gross mismanagement; under Section 1112(b), a party may seek conversion for cause such as continuing loss to the estate with no reasonable likelihood of rehabilitation.

The debtor opposed both motions on September 15, 2025, contending the U.S. Trustee relied on unproven prepetition allegations rather than postpetition mismanagement, that the estate had grown through litigation and contract proceeds, and that a filed liquidation plan made conversion unnecessary. The SBA later joined the conversion request. After hearings on December 1, 2025 and January 7, 2026, the court denied the conversion and trustee motions at the same January 7 hearing that produced plan confirmation.

Committee formation and Rule 2004 discovery. The U.S. Trustee appointed an official committee of unsecured creditors on March 6, 2025 composed entirely of church creditors: Christ Presbyterian Church, Christ's Church of Oronogo, Mitchell Road Presbyterian Church, Mobberly Baptist Church, One Church Home, Saddleback Valley Community Church, and The Crossing Church. The U.S. Trustee amended the appointment on March 13, 2025, removing The Crossing Church and adding NorthRidge Church. The committee retained Munsch Hardt Kopf & Harr, P.C., a Dallas-based commercial firm whose restructuring practice has been ranked by Chambers USA since 2005.

Discovery moved in parallel. Rule 2004 permits any party in interest to examine the debtor's acts, conduct, property, and financial condition, and its deliberately broad scope is often called a "fishing expedition." Saddleback moved first, seeking a Rule 2004 examination on March 12, 2025 and asserting the debtor had failed to remit roughly $5 million to churches without explaining where the money went. The committee and NorthRidge Church filed their own Rule 2004 motions later in April. The same creditor friction surfaced in objections to the debtor's protective-order motion and to its effort to keep existing bank accounts open, reflecting early disputes over access to the debtor's accounting records and over the treatment of settlement-account funds that the churches contended were theirs.

The Liquidation Plan and Its Five Classes

Vision2Systems filed its original plan of liquidation and disclosure statement on August 11, 2025, amended them with a first amended plan on October 2, 2025, and filed a second amended plan on November 17, 2025. The structure preserved estate causes of action, directed distribution of labeled FBO funds back to the corresponding churches, and placed Baldwin in charge of the post-effective-date wind-down. The court approved the disclosure statement on October 6, 2025, clearing the plan for a creditor vote.

The confirmed Second Amended Plan sorted claims into five classes plus unclassified administrative, professional, and priority tax claims:

Class	Claim	Treatment
1	CGC Royalty Investments IV (secured)	Allowed at $200,000; satisfied by transferring all "Tithe.ly Agreement" proceeds (~$197,000 as of Oct. 1, 2025) plus the debtor's IP; remaining $3,705,437.13 reclassified as Class 3
2	SBA (secured)	Impaired; allowed secured claim fixed at zero, any balance treated as Class 3
3	General unsecured (churches)	Impaired; share $10,000 initial distribution plus $100,000 GUC settlement distribution; opt-out creditors subject to pro rata reduction
4	Insider claims (Baldwin, Tierney)	Impaired; no distribution; insiders waive claims of $256,130.52 and $42,000
5	Equity interests	Impaired; cancelled on the effective date; no distribution

The principals settlement contributed $180,000 from Baldwin and Tierney, funding the Class 3 distributions and then an administrative reserve, per the confirmation order.

The Opt-Out Release Fight and Confirmation

The plan's release-and-distribution design drew the case's central objections. The U.S. Trustee, in both a disclosure-statement objection and a confirmation objection, argued the plan used an impermissible opt-out mechanism after Purdue, that silence could not equal consent, and that conditioning access to the $100,000 settlement pool on not opting out improperly coerced creditors into releasing non-debtors. The SBA objected that the plan failed to recognize its asserted $515,959.88 claim and tried to release Baldwin and Tierney from SBA guarantees through the same mechanism. NorthRidge Church objected that opt-out creditors were unfairly stripped of the settlement and that an independent fiduciary should control the estate. Saddleback and the Dallas County Appraisal District also objected, and the debtor and Saddleback entered a stipulation extending plan deadlines in November 2025.

The debtor defended the structure in a brief in support of confirmation, arguing the opt-out release was consensual and that the liquidation it funded delivered more to creditors than a chapter 7 would. The amended ballot summary reported that both voting impaired classes accepted. Class 1 (CGC) accepted with a single ballot voting its full $3,905,437.13 claim. Class 3 accepted with 16 of 23 voting holders in favor (69.57% by number), representing $3,573,639.54 of $3,942,317 voted (90.65% by amount); seven holders voting $368,677.46 rejected. The confirmation order found the third-party release consensual because it was conspicuously disclosed and Class 3 creditors could opt out through the ballot, addressed the Dallas County, U.S. Trustee, SBA, and NorthRidge objections on the record, and confirmed over the deemed-rejecting Classes 2, 4, and 5 under the section 1129(b) cramdown findings. The order was entered January 23, 2026.

Distributions, Fees, and Post-Confirmation Status

The debtor filed notice on February 13, 2026 that the plan became effective on February 9, 2026, setting March 11, 2026 as the administrative-claim bar date and June 9, 2026 as the professional-claim bar date. The January 2026 monthly operating report had shown the estate holding $298,170.83 split between an operating account and a settlement account, and the final monthly operating report before the effective date showed ending cash of $207,730.91 and liabilities still at $7,902,535.

The first post-confirmation report, covering the February 9 to March 31, 2026 quarter, shows the wind-down underway but incomplete. The post-confirmation debtor reported $237,175 of disbursements since the effective date and held roughly $100,966 across two accounts at quarter end. It had allowed and paid $40,000 of administrative claims and paid $197,060 of the $200,000 allowed secured claim (the Tithe.ly proceeds to CGC), while $3,573 of allowed priority claims and roughly $9,066,968 of allowed general unsecured claims remained unpaid pending distribution. The report was not marked final, indicating no final decree had yet been sought.

Professional compensation closed out in the same period. Spencer Fane filed its first and final fee application seeking $199,062.00 in fees and $31,010.81 in expenses—$230,072.81 total—after a voluntary $42,601.50 reduction, for the February 2025 to January 2026 period. Munsch Hardt's first and final application sought $46,872.00 in fees and $773.45 in expenses, which the court granted on March 11, 2026.

Frequently Asked Questions

What is Vision2Systems?

Vision2Systems was a Dallas-based fintech company formed in 2012 that provided online giving and payment processing for churches through its Vision2 platform. It processed credit-card, ACH, and check donations, held the funds in pooled FBO accounts, and remitted them to client churches. By its petition date it served roughly 325 churches but had stopped operating and had no employees.

Why did Vision2Systems file for chapter 11?

Its first day declaration attributed the collapse to an October 2023 processor transition that disrupted transactions and to a decade-long "margin account" practice that advanced funds before they cleared, masking reversals and over-settling donations to hundreds of churches. Those failures produced lawsuits from Saddleback, The Crossing, Resurrection Metropolitan Community Church, and Christian Fellowship Church.

What was the adversary proceeding against churches?

The day after its petition, Vision2Systems filed Adversary Proceeding No. 25-04030 and sought a preliminary injunction to stop churches from pursuing veil-piercing, alter-ego, and fraud claims against principals Paul Baldwin and Carl Tierney. The court entered the injunction on March 11, 2025.

Why did the U.S. Trustee seek conversion and a trustee?

The U.S. Trustee argued the debtor had stopped operating before filing, was using chapter 11 mainly to centralize litigation, and had conflicts because Baldwin and Tierney were insiders and co-defendants. It moved to convert to chapter 7 and to appoint a trustee on April 11, 2025. The court denied both at the January 7, 2026 hearing.

How did the plan treat creditors?

The confirmed plan created five classes. CGC's secured claim (Class 1) was allowed at $200,000 and paid from Tithe.ly proceeds and the debtor's IP, with the $3,705,437.13 balance moved to Class 3. The SBA's secured Class 2 claim was fixed at zero. General unsecured churches (Class 3) shared a $10,000 initial distribution and a $100,000 settlement distribution. Insider claims (Class 4) and equity (Class 5) received nothing.

What was the dispute over third-party releases?

The plan conditioned access to the $100,000 settlement pool on creditors not opting out of releases protecting Baldwin and Tierney. Citing the Supreme Court's Purdue Pharma decision, the U.S. Trustee argued silence could not equal consent. The confirmation order found the release consensual because it was conspicuously disclosed and creditors could opt out by ballot.

What is the current status of the case?

The plan became effective on February 9, 2026. The first post-confirmation report for the quarter ending March 31, 2026 shows $237,175 disbursed and CGC's secured recovery paid, while roughly $9.07 million of allowed general unsecured claims remained unpaid pending distribution under Baldwin's wind-down authority, funded in part by the $180,000 settlement contributed by Baldwin and Tierney.

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