Crystal Cathedral Bankruptcy: Chapman University, Catholic Diocese Bump Up Offers as Sale Decision Is Postponed

Two Christian institutions battling to purchase the 50-acre Garden Grove, Calif., property belonging to the indebted Crystal Cathedral Ministry have both sweetened their deals, which caused the final decision in the case to be rescheduled to Thursday, according to a hearing Monday in a Santa Ana bankruptcy court.

Chapman University, one of two major bidders trying to buy the property of bankruptcy-entangled Crystal Cathedral Ministry, added a twist to its bid, offering the church a $1-a-month lease, local media reported. The university reportedly originally proposed a $150,000 lease to the church's founder the Rev. Robert H. Schuller, so that the congregation can continue to assemble at its landmark building featuring a glass covered building. The university, an Orange County-based private school affiliated with a Protestant organization called the Disciples of Christ, was also offering a buyback option once the church gets back on its feet in 5 years, but the new lease would cancel that possibility, the Orange County Register reported.

Chapman University President James Doti reportedly said during the hearing that the school is willing to offer the core buildings, including the cathedral, the Tower of Hope, Memorial Gardens and Arboretum for $1-a-month lease. But the university has not raised its bid for the piece of real estate, which remains at $51.5 million.

The school is not the highest bidder. That title goes to the Roman Catholic Diocese of Orange, which has been trying hard to close the deal, raising its bid for the second time over the weekend. Its original offer was first bumped up by $1.8 million, to $55.4 million, last week, and currently it stands at $57.5 million, local media report.

Chapman University also reportedly announced that, if necessary, it is ready to set up a $2 million reserve to pay insider claims. The school's president expressed sympathy for church members who are so attached to the Garden Grove property, some of whom attended the court hearing.

"It has become more obvious than ever that the Crystal Cathedral is a central and special part of the county," Doti reportedly said Monday. "The congregants of this church have shown that they have the will. We are offering them the way."

Chapman University is reportedly offering the congregation a 15-year lease plan, so the ministry at Crystal Cathedral could continue its work there. Meanwhile, the Catholic diocese has offered the congregation 3 years to move out, including an option of moving into the diocese's current campus, where the St. Callistus Catholic Church stands, according to The Los Angeles Times.

Crystal Cathedral Ministry claims more than 10,000 members. It also broadcasts a popular televised service, "The Hour of Power."

Crystal Cathedral administrators filed for Chapter 11 bankruptcy protection after reportedly experiencing financial difficulties since 2002, in what is a controversial and much publicized case of a megachurch possibly going out of business.

Originally, the list of top potential buyers was constituted of the diocese, Hobby Lobby and Chapman University. On Oct. 26, the Schullers announced that they have "reluctantly" agreed to sell the property to the university. But on Oct. 31, it emerged that the Roman Catholic Diocese of Orange had filed a petition in a California courthouse to stop the sale of the campus to Chapman University. The diocese also placed another, higher bid of $55.4 million on the estate on Nov. 10.

Some commenters have been suggesting that a protestant congregation will not want to sell its property to a Catholic one.

On Sept. 30, creditors in the megachurch's bankruptcy case filed a lawsuit against church administrators, including the Schullers, in which they are accused of borrowing money from Crystal Cathedral's endowment funds, therefore receiving good salaries even as the church was experiencing financial malaise. The suit claims that the Rev. Schuller and his relatives borrowed as much as $10 million from the endowment funds between 2002 and 2009.

On Oct. 4, Schuller denied the allegations, calling them "serious and untrue."

Some Christian leaders have been suggesting that the cloudiness surrounding the bankruptcy process is giving Christianity a bad image.

The Rev. Schuller and his wife, Arvella, founded the Crystal Cathedral congregation (known previously as the Garden Grove Community Church) in 1955.

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