Judge lets Crystal Cathedral bankruptcy plan proceed

The judge in the Crystal Cathedral bankruptcy case agreed Wednesday to move forward with an exit plan that calls for the sale of the church’s Garden Grove property.

The Los Angeles Times reports that

In the next month, about 400 creditors will vote on an exit strategy; the Roman Catholic Diocese of Orange and Chapman University, both of which increased their initial bids, remain the leading candidates to buy the property. The creditors committee, composed of various vendors, is open to considering other offers, attorney Nanette Sanders told the court.

“Everyone is looking to have a sale occur as soon as possible,” she said of the creditors.

The Diocese of Orange has proposed a $53.6-million cash offer; Chapman has offered $50 million but would allow the church to lease back and repurchase core buildings and land.

Even so, the Crystal Cathedral ministry, which launched a fundraising campaign July 31, has been hoping for $50 million in donations. Founded by the Rev. Robert H. Schuller, the church filed an initial exit plan in May that called for the sale of the campus to a real estate investment group. After a board reorganization, the church withdrew that plan.

The Orange County Register says

Also discussed during the hearing were ways to deal with claims totaling $2 million made by “insiders,” primarily family members of Robert H. Schuller. The creditors committee has stated in the plan that insiders should be paid only after the unsecured creditors, primarily vendors and contractors, have received what they are owed.

Carl Grumer, an attorney representing some of the Schuller family members, said his clients would object to that and would like to be paid the same time as other creditors.

Sanders said the insider claims will be treated as a separate issue and will not have any impact on the sale process.

Bob Canfield, a church member and one of several congregants who have organized a petition drive to save the ministry and eliminate the Schuller family from the cathedral, told the judge that there are donors willing to give money if the Schuller daughters leave the church.

Robert H. Schuller, 84, handed over the church’s administration to his oldest daughter, Sheila Schuller Coleman. The older Schuller and his wife, Arvella, still serve on the board.

“Dr. Schuller is a great man,” Canfield said. “We need to get him back in charge and get rid of his children, who are fighting among themselves.”

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This post was last updated: Sep. 15, 2011