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Crystal Cathedral: Creditors Threaten Lawsuit If Leaders Block Church Sale

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  • crystal cathedral
    (Photo: The Christian Post)
    The Crystal Cathedral is seen here in Garden Grove, California.
By Nicola Menzie, Christian Post Reporter
August 10, 2011|9:59 am

Crystal Cathedral's bankruptcy woes have increased as the creditors committee tasked with recovering $50 million in debt from the ministry is threatening to sue the ministry's founders if they impede the sale of the California megachurch.

Robert H. Schuller is the founder of Crystal Cathedral and his family members maintain prominent leadership roles in the ministry.

The creditors committee has told Crystal Cathedral administrators in court papers filed Tuesday that they have two choices: cooperate with the committee in selecting a buyer or the committee would make the decision alone.

Creditors warned that if they press ahead for a sale without church leaders' participation, the purchase option selected might not include a leaseback or buyback option.

Of the several purchase offers currently on the table, the heftiest come from two churches and a university.

The Roman Catholic Diocese of Orange has offered $53.6 million in cash, $3.6 million more than it had originally offered; Chapman University also increased its offer from $46 million to $50 million; and My Father's House International Church in Norco has also offered $50 million for the Crystal Cathedral's 40-acre property. However, Norco's offer is deemed "inferior" in court papers.

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According to court papers, which have been published online, creditors appear to be leaning toward offers from the diocese and Chapman University.

The diocese's offer also includes a leaseback plan that would allow Crystal Cathedral worshipers to use the church facility for two years. In Chapman University's offer, the university president encouraged church leaders to repurchase the church if desired.

The creditors committee warned that if Crystal Cathedral fails to cooperate with the church sale, the Schullers can expect a lawsuit.

Creditors accused the Schullers of making preferential payments to church insiders instead of focusing on settling the cathedral's $50 million debt.

The committee accuses the Schullers of taking money from the 2010 sale of the church's Rancho Capistrano property and depositing it into the church founder's pension fund. The church has also been accused of making fraudulent transfers before it filed for Chapter 11 bankruptcy in October.

Crystal Cathedral board members announced during a July 31 service that the church was not for sale anymore and that they would call on supporters and God to help raise funds to cover the ministry's $50 million-debt.

The church's fundraising efforts were to run until Thanksgiving, but court schedules indicate that creditors are looking to confirm a selling plan by Nov. 12, according to the Orange County Register.

It was unclear how much money the Schullers might have raised thus far.

John Charles, a spokesman for the Crystal Cathedral, told the Los Angeles Times last week that he had no idea how much of the $50 million had been secured.

Charles has not responded to The Christian Post's requests for a comment.

The next bankruptcy court hearing is scheduled for Sept. 14.

 

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