Crystal Cathedral Bankruptcy: Schuller Denies Allegations in Lawsuit Filed by Creditors

Robert H. Schuller is defending himself and his family against allegations in a lawsuit filed by Crystal Cathedral creditors overseeing the California megachurch's bankruptcy case, in which the Schullers are accused of drawing income from the ministry's endowment fund to cover their own salaries.

Court documents related to the lawsuit were made available earlier this week and Schuller, founder of the Orange Grove church, insists the claims made against he and his family are false.

"This lawsuit makes serious and untrue allegations regarding myself and my family," Schuller said Tuesday in a statement to the Los Angeles Times, which published a copy of the lawsuit on its website. "It is unfortunate that I will have to defend this lawsuit only to prove what is true."

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In a legal complaint dated Sept. 30, creditors allege that church administrators, which includes the Schullers, were borrowing money from Crystal Cathedral's endowment fund, therefore receiving good salaries even as the church was experiencing financial malaise.

Schuller and his relatives allegedly borrowed about $10 million from the Endowment Fund between 2002 and 2009.

Based on the bankruptcy case, the Schuller family would be the last to receive money after the land on which the Crystal Cathedral stands is sold. However, the founder of the megachurch servicing a congregation of over 10,000 members and broadcaster of the longest running television church service, "The Hour of Power," and his kin allegedly want to be paid at the same time as other creditors.

That is why the committee of 400 creditors filed the lawsuit, according to the Times.

In 2002, the founding family of the Crystal Cathedral started experiencing financial difficulties, and started borrowing money from the Crystal Cathedral Endowment Fund, according to the case documentation.

The church's financial situation grew even worse after the 2008 recession.

The California based megachurch was forced to file for Chapter 11 bankruptcy protection in October 2010. At the time, it was faced with lawsuits for money owed to vendors from the 2009 production of "Glory of Christmas" – an additional punch next to a decline in revenue.

"We think that the allegations of the complaint will ultimately be proven to be untrue," Carl Grumer, the Schuller family's lawyer, told the Times.

Crystal Cathedral administrators, who announced a "faith filled" decision in July to raise $50 million to try to pay off its debt and maintain ownership of the church, have reportedly fallen short in their fundraising efforts. The Schullers have reportedly failed to raise even half of the funds needed to prevent the church from being sold.

The church's bankruptcy woes have attracted several purchasing offers, with the highest bid coming from the Roman Catholic Diocese of Orange for $53.6 million.

Other interested buyers include Chapman University, Hobby Lobby, and My Father's House International Church in Norco.

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