Judge to Decide on Crystal Cathedral Sale

Garden Grove - A federal judge overseeing two competing plans to acquire the debt-ridden Crystal Cathedral in Garden Grove put off a decision until Thursday so the ministry's board members could have time to consider a new proposal put forth this afternoon.

After an unusual day of skirmishing among the attorneys involved in Crystal Cathedral's bankruptcy case, U.S. District Judge Robert Kwan ruled today that plans put forth by Chapman University and the Orange County Roman Catholic Diocese are feasible options to pay off the mega-church's $51.7 million debt.

The Diocese increased its $53.6 million offer to $55.4 million last week, but then, over the weekend, boosted it again to $57.5 million. Diocese officials wanted to make sure the offer covered all projected debt, including an approximate $300,000 annual annuity to the Crystal Cathedral's founder, the Rev. Robert H. Schuller, and his wife.

Crystal Cathedral Ministry's board members have designated Chapman University as the "preferred buyer," mostly based on the terms of its offer that would allow the debt-plagued church a chance to buy back its cathedral and maintain control over its cemetery.

However, financial expert Michael Vanderley testified today that Chapman's $51.5 million bid would not be feasible under most of the scenarios, which included extra claims from Schuller and his wife.

There was much debate throughout the day on whether there should be about $6.5 million set aside to pay off claims from "insiders" like the Schullers, and the Diocese's enhanced offer prompted Chapman University President James Doti to return from the lunch break with an "alternative" offer, giving Crystal Cathedral Ministry's board members two choices from the university.

Doti called Crystal Cathedral a "global beacon" in Orange County, and pitched the new proposal as a way to make sure the ministry could stay on the Garden Grove campus with the university for many more years.

The purchase price would remain the same at $51.5 million, but the university would set aside $2 million to address any other claims the Schullers might have that would be worked out later. The university would also lower its rent for the ministry's "core buildings" like the original church, the arboretum, to $1 a month and the congregation could use the cathedral on Sundays and other occasions with the university's permission.

However, the option to buy back the leased property within five years would be converted to a first right of refusal over the next 15 years. The congregation would also be allowed to rent the arboretum for 30 years instead of 15 years.

Chapman's other offer has provisions allowing Crystal Cathedral to rent some of the property for up to 15 years with options to buy back some of it. The new proposal would not allow for any buy-back provisions.

The Diocese's offer would allow Crystal Cathedral to continue renting, but after three years it would be relocated to one of the Diocese's parishes in Garden Grove.

Another main difference between the two bidders is Chapman would let Crystal Cathedral continue operating the Garden of Memories, while the Diocese wants to take over administration of the cemetery.

Doti said the family of Orange County multi-millionaire John Crean, who died in 2007 and was buried in the Garden of Memories, will have his remains relocated if the Diocese takes over the cemetery.

Carl Grumer, an attorney representing Crystal Cathedral's founder and his wife, said the ministry about six years ago pledged to pay the couple about $300,000 a year as a sort of annuity, with another $50,000 to cover health and other expenses.

The Schullers also have issues with the ministry's board regarding the use of his sermons, books and image to raise money. Those intellectual property claims could be headed to court, Carol Milner, one of Schuller's daughters, said after today's hearing.

Schuller and his wife wanted a cushion of at least $6.5 million built into the bankruptcy deal to cover their living expenses and intellectual property claims, Milner said. Grumer claimed Schuller's wife has a history of longevity in the family with some of the 82-year-old's relatives living into their upper-90s.

However, Kwan ruled that only $500,000 should be set aside for those claims.

Crystal Cathedral's board members will meet at 5 p.m., Wednesday, to consider Chapman's new bid. Kwan set Thursday afternoon for a hearing to decide which bidder will get the property.

Schuller could not make today's hearing because he was looking after his wife, who has two fractured vertebrae, Milner said.

There's been a split within the Schuller family with some of his children backing him and others, including Senior Pastor Sheila Schuller, backing the ministry's board.

Milner said she and her parents feel disrespected by the ministry's board and Chapman University, and she claimed her parents haven't been paid the annuity for two years. They sided with the Diocese.

"They've been very gracious," Milner said of Diocese officials.

Meanwhile, Schuller has mounting legal costs and has allowed Crystal Cathedral Ministry to continue using his sermons, books and image to raise money while being "kept in the dark" on how the material would be used and by whom, Milner said.

The Diocese's representatives "called us and said, `How can we accommodate you?"' Milner said. "I wish I could say the same thing about Chapman because I love Chapman. My son goes there."

Originally, Milner said she favored Chapman's bid.

"There has been a lot the Catholic church has done to make my parents feel honored," Milner said.

Milner's father also favors the Diocese's bid because it would ensure that the mega-church would remain a place of Christian worship instead of a university campus, Milner said.

"My father's always been so ecumenical," Milner said.