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The key to a successful Chapter 11 bankruptcy for The Crystal Cathedral:
October 31st, 2010 | Author: pro4534
The Crystal Cathedral, the Southern California mega-church, landmark, and broadcaster of the “Hour of Power” program has filed for Chapter 11 bankruptcy. The bankruptcy was filed to protect the church from creditors as it struggles with debt of over $43 million. The bankruptcy filing provides more evidence of the challenges facing churches across the country as the slow economy continues to hurt even the most well-established and famous of the lot.
In addition to its national Hour of Power broadcast led by the Rev. Robert H. Schuller, the church is renowned for its signature glass-covered place of worship and its “Glory of Christmas” and “Glory of Easter” programs. Schuller, in fact, is credited by many as the man who brought televangelism into the mainstream.
Completed in 1980, The Crystal Cathedral’s grounds saw additional buildings added over the years including a Richard Meier-designed Welcoming Center in 2003. In January, reacting to $55 million budget deficit, the laid off 50 employees to cut $4.9 million from its $20 million annual operating budget, and parted with its Rancho Capistrano property, a 170-acre retreat and wedding center. Its two signature programs, “The Glory of Easter” and “The Glory of Christmas” were canceled to slash the budget further.
Much like the situation for many California homeowners, The Crystal Cathedral took on mortgages during the boom times and then ran deficits as revenues decreased expanding too quickly. Despite the cutbacks, revenues dried up to a point where the church was forced to file Chapter 11. Prior to the filing, the church had attempted to negotiate a repayment plan with a long list of vendors, but a handful broke away from the group to file their own lawsuits in an attempt to force the church to pay them first. This effectively broke the negotiations and forced the church to seek protection under Chapter 11.
The Chapter 11 bankruptcy will allow the church to continue operations while it works out a payment plan through the bankruptcy court. Jim Penner, the executive producer of the “Hour of Power” said “We want to pay our vendors back”, while others at the church confirmed that operations would continue as normal. The Chapter 11 reorganization process will result in a payment plan which will ultimately have to be approved by creditors and the bankruptcy court.
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