Calif. Megachurch Enters Bankruptcy amid Lawsuits

By Audrey Barrick, Christian Post Reporter Tuesday, October 19, 2010

After years of leadership transitions and struggles with declining donations, renowned megachurch Crystal Cathedral has filed for bankruptcy.

In an announcement Monday, the Southern California church said it found it necessary to seek the protection of a Chapter 11 because of pending lawsuits by creditors.

The church had been facing at least three lawsuits for the more than $2 million in debts it owed vendors for services rendered for its 2009 "Glory of Christmas" production. Though creditors had agreed to work things out by providing a grace period, ultimately negotiations did not move fast enough to satisfy all parties.

Church officials said they will work with the Creditors Committee to finalize a payment plan "that is fair to all vendors and consistent with our belief as a Ministry and emerge from Chapter 11 as quickly as possible."

While the church addresses past due expenses and revenue decline, Dr. Sheila Schuller Coleman, senior pastor of Crystal Cathedral, said ministry operations will continue as is. This includes Sunday services, the weekly "Hour of Power" television program, weekly church activities and the Crystal Cathedral Academy & High School.

"Just as we have taught for years, this is an opportunity to model God's sustaining strength through anything," Coleman said. "Many of the persons who support our Ministry are facing similar challenges and when they hear our message of hope, they know we are speaking from a point of true understanding."

Coleman expressed that she was not daunted by the financial woes.

"Challenging situations are nothing new to our 55-year Ministry," she said. "Many people said we'd fail when we started our church in a drive-in theater. But look how successful that was! Many said we'd fail in 1970 when we made the commitment to televise our first worship service in Los Angeles and then New York...but look how far we've come!

"We've always believed in a big God ... a God Who is greater than any problem or challenge we could ever face. Our announcement today to file for the protection of Chapter 11 is just one more chapter in the book that He is continuing to write – and we know that God's plans are good – we have no doubt His chapter will be good!"

Rumors that the Crystal Cathedral, based in Garden Grove, was headed toward bankruptcy began last year as the church put up for sale a four-story office on its campus along with a 170-acre piece of land. It also laid off some staff and canceled for the first time in 27 years its "Glory of Easter" production this year. And in August, the family of the ministry's founder, Robert H. Schuller, announced that they would take a voluntary 50 percent pay cut for two months.

But church officials reported that they are bouncing back as the most recent financial reports "indicate the best cash flow the ministry has experienced in 10 years."

The Crystal Cathedral claims to have over 10,000 members and is internationally known for its televised program. The leadership of Crystal Cathedral was handed to Schuller's son, Robert A. Schuller, in 2006. The younger Schuller resigned a couple years later following disagreements over the direction of the church's popular "Hour of Power" television program. In 2009, the Crystal Cathedral announced that the eldest Schuller child, Coleman, would co-lead the church with her father. She now serves as the senior pastor.