Vision2Systems: Chapter 11 Triggers Church Litigation and U.S. Trustee Conversion Push

When Vision2Systems LLC filed for chapter 11 protection in the Northern District of Texas on February 19, 2025, the Dallas-based fintech company also filed an adversary proceeding against its own customers—more than twenty churches that used the company to process their congregants' tithes and donations. Within three weeks, the debtor obtained a preliminary injunction against these religious organizations, preventing them from pursuing certain claims while the bankruptcy unfolded. The case includes Saddleback Valley Community Church—the California megachurch founded by Rick Warren with approximately 30,000 weekly attendees—as a major creditor and adversary defendant. The U.S. Trustee filed motions to appoint a chapter 11 trustee and to convert the case to chapter 7 liquidation. The dispute concerns what happens to FBO (For Benefit Of) funds—donation money collected from congregants and held by the payment processor on behalf of churches—when that processor files bankruptcy.

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
Case Number	25-40583-MXM-11
Judge	Hon. Mark X. Mullin
Plan Type	Second Amended Chapter 11 Plan
Confirmation Status	Pending (hearing held December 1, 2025)
Adversary Proceeding	25-04030 (filed same day as petition)
Debtor's Counsel	Spencer Fane LLP
UCC Counsel	Munsch Hardt Kopf & Harr, P.C.
Claims Agent	Stretto, Inc.

Company Background and Business Model

The Church Giving Technology Market

The religious giving landscape has shifted over the past fifteen years. In 2011, only 14% of churches offered online giving. By 2025, that figure had reached 74%. Churches that accept tithing online have seen an average 32% increase in overall donations, making digital payment processing an important component for religious organizations nationwide.

According to Ministry Brands' 2025 State of Church Giving report, digital giving now constitutes 42% of total church donations, with recurring gifts accounting for 42% of all digital donations and 57% of digital transactions. Donations via Apple Pay, Venmo, and other digital wallets doubled in 2024, and for the first time in years, 51% of surveyed churches reported an increase in overall giving. The global church management software market is projected to grow by $418.5 million from 2025-2029 at a compound annual growth rate of 8.9%.

Faith-based nonprofits received approximately $146.5 billion in 2024, representing roughly 25% of all charitable giving in the United States. Religious organizations remain the largest category of charitable recipients. Competitors in this space include Tithe.ly, Pushpay, and Donorbox, each offering platforms for online, mobile, and text-based donations with processing fees typically around 2.9% plus 30 cents per transaction.

Vision2Systems Platform and Operations

Vision2Systems operated in this market as a software company creating connections between churches, nonprofits, and humanitarian organizations. According to its Crunchbase profile, the company offered its Vision2 Fundraising CRM as a SaaS product providing features including individual profile management, acknowledgements, gift entry, payment processing, revenue accounting, marketing analytics, and batch entry capabilities. The platform was designed to be easy-to-use and affordable, targeting smaller and mid-sized congregations seeking digital giving solutions.

The company operated from Dallas, Texas, serving churches across multiple states. Its core function was to serve as an intermediary between donors and religious organizations—processing ACH transactions when congregants made donations, holding those funds temporarily, and then remitting them to the churches. This payment flow depended on what the industry calls FBO (For Benefit Of) accounts.

FBO Account Structure and Its Implications

An FBO account is a type of financial account that allows a company to manage funds on behalf of another entity without assuming legal ownership. These pooled accounts have become popular in the fintech industry to mitigate potential money transmission risk. By using a properly constructed FBO account with a regulated bank, a business can avoid money transmitter licensing requirements in many states while still facilitating payment flows.

As Stripe explains, when payments are made through a platform utilizing FBO accounts, the money is gathered into a pooled account to keep it separate from the payment processor's own operating funds. The money is then paid out to the seller—in Vision2Systems' case, the churches—after necessary checks are performed. Pass-through FDIC coverage theoretically ensures each beneficiary's funds may be insured separately even in a pooled account.

The legal question in the case is whether FBO funds constitute property of the bankruptcy estate or whether they remain property of the beneficiaries. If churches' donation money is deemed estate property, it becomes available to satisfy creditor claims generally. If it remains beneficiary property, churches may have priority claims or the ability to recover funds outside the bankruptcy distribution scheme. This distinction is a central issue in the Vision2Systems case.

Pre-Petition Litigation and the Path to Bankruptcy

The Resurrection Metropolitan Community Church Lawsuit

Issues in Vision2Systems' operations became public in 2024 when churches began experiencing payment delays and non-remittances. The Resurrection Metropolitan Community Church of Houston, Texas entered into a contractual relationship with Vision2Systems in 2019 to collect, process, and transfer tithe donations from congregants.

Between June and August of 2024, Vision2Systems held and refused to transmit over $20,000 of the Houston church's donations in what the church characterized as a breach of contract. Bailey Cowan Heckaman PLLC, a Houston law firm representing the Resurrection Metropolitan Community Church, filed suit alleging the company violated multiple sections of the Texas Deceptive Trade Practices Act. The DTPA represents the leading consumer protection legislation in Texas, and notably, churches qualify as "consumers" under the statute as entities seeking to acquire services.

The DTPA provides significant remedies for successful plaintiffs. If a plaintiff proves the defendant knowingly engaged in deceptive practices, treble damages—up to three times actual damages—may be recovered. Importantly, intent to deceive is irrelevant to basic DTPA liability; the focus is on whether the conduct constitutes a prohibited practice under the statute's enumerated categories.

Expanding Pattern of Claims

The Resurrection Metropolitan Community Church's experience was not isolated. Multiple churches across the country had contracted with Vision2Systems for donation processing and found themselves unable to receive their congregants' contributions. Among the affected creditors was Saddleback Valley Community Church, one of the largest churches in the United States. Other churches including Northridge Church, Christ Presbyterian Church, The Crossing Church, Church of God Ministries, and Southall Church appear in case filings as creditors or adversary defendants.

Churches depend on consistent cash flow from weekly giving to fund operations, staff salaries, facilities, and ministry programs. When a payment processor withholds funds for weeks or months, churches can face operational strain, particularly smaller congregations operating on thin margins without substantial reserves.

The Chapter 11 Filing and Adversary Proceeding

Same-Day Adversary Proceeding Against Church Customers

On February 19, 2025, Vision2Systems filed its chapter 11 petition in the Northern District of Texas. The debtor simultaneously filed Adversary Proceeding No. 25-04030, captioned "Vision2Systems LLC v. Those Parties Listed in Appendices A and B." The defendants named in the appendices were the debtor's own customers—the churches that had contracted with Vision2Systems for payment processing and were now seeking recovery of withheld funds.

The adversary complaint sought preliminary injunctive relief to prevent the churches from pursuing certain claims and actions outside of the bankruptcy case. The debtor argued that allowing churches to continue state court litigation or pursue chargebacks and other remedies would interfere with the bankruptcy proceeding and dissipate estate resources.

The adversary complaint sought to extend stay-like protections to potentially non-debtor parties and to enjoin actions that might not technically violate the automatic stay.

Rapid Injunctive Relief Against Churches

On February 20, 2025—one day after filing—Vision2Systems filed an emergency motion for a preliminary injunction in the adversary proceeding. By February 24, 2025, five days after the petition date, the court granted a temporary restraining order against the church defendants.

A hearing on the preliminary injunction followed on March 5, 2025, and on March 11, 2025, the court entered an order granting the preliminary injunction. Within three weeks of filing bankruptcy, Vision2Systems had obtained court orders preventing its church customers from pursuing certain remedies.

The legal authority for such injunctions draws on Section 105(a) of the Bankruptcy Code, which gives bankruptcy courts powers to issue orders necessary to carry out the provisions of the Bankruptcy Code. Courts recognize that preliminary injunctive relief may extend to non-debtor parties where there is identity between the debtor and third-party defendant or where pending litigation would cause the debtor irreparable harm.

Following the Supreme Court's Purdue Pharma decision in June 2024, which held that nondebtors may not receive permanent injunctive relief in the form of nonconsensual releases, bankruptcy courts have continued to recognize their authority to grant preliminary injunctions to nondebtors. Such preliminary relief must satisfy the traditional four-factor test: likelihood of success on the merits, irreparable harm absent the injunction, balance of harms favoring the movant, and public interest.

First Day Motions and Relief

Beyond the adversary proceeding, Vision2Systems filed a standard suite of first day motions seeking operational relief. These included:

The court granted procedures relief on February 21, 2025, and entered the lease rejection order on March 21, 2025. A protective order followed on May 8, 2025, limiting discovery in certain respects. These first day orders addressed case administration issues while the adversary proceeding and broader case administration proceeded.

U.S. Trustee Challenges

Motion to Appoint Chapter 11 Trustee

On April 11, 2025, the U.S. Trustee filed a motion to appoint a chapter 11 trustee. Under 11 U.S.C. § 1104, the court shall order appointment of a trustee "for cause," which includes fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management. The court may also appoint a trustee if doing so is in the interests of creditors, any equity security holders, and other interests of the estate.

Trustee appointment removes control of the estate from the debtor's principals and places it in the hands of an independent fiduciary.

Vision2Systems objected to the trustee motion on September 15, 2025, and the motion remained pending through the December 2025 confirmation hearing.

Motion to Convert to Chapter 7

The same day the U.S. Trustee filed the trustee motion, it also filed a motion to convert the case from chapter 11 reorganization to chapter 7 liquidation. Under Section 1112(b), a party in interest may seek conversion or dismissal "for cause," with statutory examples including substantial or continuing loss to the estate, absence of reasonable likelihood of rehabilitation, gross mismanagement of the estate, and failure to maintain insurance.

The motions operate as alternatives: if the court declines to appoint a trustee, it could instead convert the case to chapter 7, which would also displace existing management (through appointment of a chapter 7 trustee) while liquidating assets rather than reorganizing the business.

The debtor objected to conversion on September 15, 2025, the same date as its trustee motion objection. Both motions were scheduled to be heard at the December 1, 2025 confirmation hearing.

Rule 2004 Examinations and Discovery

Multiple Creditors Seeking Information

The adversarial nature of the case extended to discovery. Rule 2004 of the Federal Rules of Bankruptcy Procedure provides a broad discovery tool allowing any party in interest to examine an entity concerning the acts, conduct, property, liabilities, and financial condition of the debtor. Rule 2004 examinations are often referred to as "fishing expeditions" because their scope is deliberately broad—encompassing any matter affecting administration of the debtor's estate.

Multiple parties sought Rule 2004 examinations of Vision2Systems:

The motions sought information about where donation funds went, what arrangements the debtor made with various parties, and what transactions occurred in the months leading up to bankruptcy.

Official Committee of Unsecured Creditors

UCC Formation and Professional Retention

The U.S. Trustee appointed an Official Committee of Unsecured Creditors to represent the interests of general unsecured creditors—in this case, primarily the churches owed money by Vision2Systems. The UCC engaged Munsch Hardt Kopf & Harr, P.C. as its counsel, with the retention order entered on April 24, 2025.

Munsch Hardt is a full-service commercial law firm with more than 160 attorneys across offices in Dallas, Austin, and Houston. The firm's bankruptcy and restructuring practice has been consistently ranked by Chambers USA since 2005.

The UCC participated throughout the case, filing its own Rule 2004 examination motion, reviewing the debtor's plan proposals, and engaging in negotiations over FBO fund distribution.

Plan Process and Confirmation

Plan Evolution Through Three Iterations

The debtor filed its original chapter 11 plan and disclosure statement on August 11, 2025. The plan proposed to distribute FBO funds held for the benefit of church customers along with releases and injunctions against further claims.

Objections to the disclosure statement followed:

In response to these objections, the debtor filed a First Amended Plan on October 2, 2025. The court approved the disclosure statement on October 6, 2025, allowing solicitation of votes on the plan. A Second Amended Plan was filed on November 17, 2025—the same day multiple confirmation objections were submitted.

Plan Objections and the December 1 Hearing

On November 17, 2025, the U.S. Trustee filed a confirmation objection, as did Saddleback Valley Community Church. Northridge Church submitted two separate filings. Dallas County Appraisal District, a tax creditor, filed its objection on November 18, 2025.

The objections included filings from the U.S. Trustee, Saddleback, Northridge, and Dallas County Appraisal District.

On November 11-12, 2025, filings indicate a stipulation between the debtor and Saddleback. The nature and terms of this stipulation are not fully disclosed in the public docket.

The confirmation hearing took place on December 1, 2025. As of the research cutoff, confirmation remained pending. The U.S. Trustee's motions to appoint a trustee and to convert to chapter 7 remained unresolved through this hearing.

Saddleback Church: A High-Profile Creditor

Megachurch Background

Among the church creditors in the Vision2Systems case, Saddleback Valley Community Church is one of the largest churches in California and the United States. Founded by Rick Warren and his wife Kay Warren in 1980, Saddleback is an evangelical, non-denominational Christian megachurch based in Lake Forest, California, with multiple satellite campuses.

Weekly church attendance reached approximately 30,000 people in 2024. In 1995, Zondervan published Warren's bestselling book "The Purpose Driven Church." In April 2005, Time magazine named Warren one of the "100 Most Influential People in the World".

Warren stepped down from Saddleback Church in 2022 due to health issues, with Andy Wood succeeding him as senior pastor. In 2023, the church was removed from Southern Baptist Convention membership over the ordination of female pastors.

Saddleback's Role in the Bankruptcy

Saddleback is a major creditor and adversary defendant. The church filed one of the first Rule 2004 examination motions on March 12, 2025, seeking discovery about the debtor's operations and the disposition of funds. Saddleback objected to both the disclosure statement and plan confirmation, and entered into a stipulation with the debtor in November 2025.

Other church creditors named in filings include Northridge Church, Christ Presbyterian Church, The Crossing Church, Church of God Ministries, and Southall Church.

Legal and Industry Context

Fintech Payment Processors and Bankruptcy Risk

The Vision2Systems case involves questions that arise when fintech companies serving as payment intermediaries encounter financial distress. FBO accounts create legal ambiguity: while intended to segregate customer funds from operating capital, the pooled nature of these accounts and the absence of clear bankruptcy law on fintech beneficiary claims can leave customers exposed.

When a payment processor files bankruptcy, several questions emerge. Are funds held in FBO accounts property of the estate under Section 541, or do they remain property of the beneficiaries? Can beneficiaries assert constructive trust claims to recover their funds outside of the general distribution scheme? Does the debtor's control over fund disbursement transform what should be beneficiary property into estate property?

These questions are litigated in cases involving FBO funds. The Vision2Systems bankruptcy involves disputes over FBO fund ownership.

Churches' Vulnerability to Financial Fraud

Religious organizations face particular exposure to financial misconduct. Research tracking ecclesiastical crime estimates $62 billion in annual losses to fraud and embezzlement affecting religious organizations. Christians and other faith communities are especially susceptible to affinity fraud—schemes that exploit trust within close-knit groups. Nonprofit organizations generally face challenges combatting financial fraud because their focus on mission often supersedes investment in administrative safeguards and internal controls.

The FBI advises donors to give using checks or credit cards rather than cash, gift cards, or wire transfers, and to verify charities before contributing.

Vision2Systems received congregant donations, held them temporarily, and was responsible for transmitting them to churches. When that transmission failed, churches lost access to funds that had already left their donors' accounts.

Texas DTPA as Creditor Tool

The Texas Deceptive Trade Practices Act provided affected churches with a potential litigation avenue before bankruptcy. The DTPA broadly defines "consumer" to include any individual, partnership, corporation, or governmental entity that seeks to acquire goods or services—a definition that encompasses churches contracting for payment processing services.

The statute requires written notice to the merchant at least 60 days before filing a DTPA lawsuit, providing an opportunity for pre-suit resolution. If a consumer proves knowing deception, the DTPA authorizes treble damages. Unlike many causes of action, intent to deceive is irrelevant to basic DTPA liability—the focus is on whether prohibited practices occurred, not whether the defendant intended harm.

Pre-petition DTPA claims become unsecured claims in bankruptcy, potentially diluting their value. The availability of treble damages explains why churches pursued DTPA theories against Vision2Systems before the bankruptcy filing.

Key Case Points

Same-day adversary proceeding. Vision2Systems filed an adversary proceeding against church customers on the petition date and obtained a preliminary injunction within three weeks.

U.S. Trustee motions. The U.S. Trustee filed motions to appoint a chapter 11 trustee and to convert the case to chapter 7 liquidation.

FBO fund ownership dispute. The plan addresses distribution of FBO funds held for the benefit of church customers, and the case centers on whether those funds are estate property or beneficiary property.

Rule 2004 examinations. Saddleback, the UCC, and Northridge sought Rule 2004 examinations of the debtor.

Plan confirmation contested. The U.S. Trustee, Saddleback, Northridge, and Dallas County Appraisal District filed objections to confirmation of the Second Amended Plan.

Frequently Asked Questions

What is Vision2Systems?

Vision2Systems is a Dallas-based fintech company that provided online payment processing services for churches, enabling congregations to collect tithes and donations digitally through its Vision2 Fundraising CRM platform. The company held church funds in FBO (For Benefit Of) accounts and was responsible for remitting donations to client churches.

Why did Vision2Systems file bankruptcy?

Vision2Systems filed chapter 11 in February 2025 after disputes with church customers over withheld donation funds. The Resurrection Metropolitan Community Church of Houston filed suit alleging the company retained over $20,000 in tithe donations between June and August 2024, and other churches experienced similar issues with fund remittance.

What is the adversary proceeding against churches?

On the same day as its bankruptcy filing, Vision2Systems filed Adversary Proceeding No. 25-04030 against more than twenty church customers named in appendices to the complaint. The debtor sought and obtained a preliminary injunction preventing churches from pursuing certain claims outside of the bankruptcy process.

Why did the U.S. Trustee file trustee and conversion motions?

The U.S. Trustee filed both a motion to appoint a chapter 11 trustee and a motion to convert the case to chapter 7 liquidation on April 11, 2025. Both motions remained pending through the December 2025 confirmation hearing.

What are FBO funds and why are they disputed?

FBO (For Benefit Of) funds are monies that payment processors hold in pooled bank accounts on behalf of their customers—in this case, church donation funds collected from congregants. The ownership question determines whether churches have priority claims or must share with general unsecured creditors.

Is Saddleback Church a creditor in this case?

Yes, Saddleback Valley Community Church—the California megachurch founded by Rick Warren with approximately 30,000 weekly attendees—is a major creditor and was named as a defendant in the debtor's adversary proceeding. Saddleback filed a Rule 2004 examination motion, objected to the disclosure statement and plan, and entered into a stipulation with the debtor in November 2025.

What is the current status of the case?

As of December 2025, the case remains active with confirmation pending following a December 1, 2025 hearing on the debtor's Second Amended Plan. The U.S. Trustee's motions to appoint a chapter 11 trustee and to convert to chapter 7 also remain unresolved. Multiple church creditors and the Dallas County Appraisal District objected to confirmation.

Who represents the debtor and creditors?

Spencer Fane LLP serves as debtor's counsel. The Official Committee of Unsecured Creditors is represented by Munsch Hardt Kopf & Harr, P.C. Stretto, Inc. serves as the claims and noticing agent. Various church creditors have engaged their own counsel for Rule 2004 examinations and confirmation objections.

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For ongoing coverage of chapter 11 bankruptcies and restructuring developments, explore the ElevenFlo bankruptcy blog.