Crystal Cathedral Ministries Seeks Bankruptcy, Blames Recession

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By Steven Church
(c) 2010 Bloomberg News
Tuesday, October 19, 2010; 12:05 AM

The church, known for its television show "The Hour of Power," listed assets and debts of $50 million to $100 million each in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Santa Ana, California. The church, based in Garden Grove, claims a congregation of 10,000 members.

"Budgets could not be cut fast enough to keep up with the unprecedented rapid decline in revenue due to the recession," Senior Pastor Sheila Schuller Coleman said in a statement.

U.S. churches are struggling financially because high unemployment has cut weekly offerings, said Wayne Bradshaw, president and chief operating officer of Broadway Federal Bank. The Los Angeles-based lender does about 25 percent of its lending business with churches.

Broadway, which has about $510 million in assets, has made about $100 million in loans to churches, Bradshaw said. The church-related loans have a higher rate of late payments than Broadway's other loans, Bradshaw said.

"We're seeing more late payments," Bradshaw said in a phone interview. "There certainly has been increasing delinquencies."

Crystal Cathedral spokesman John Charles said in an interview the church's revenue has fallen about 40 percent this year. From 2008 to 2009 revenue fell from about $30 million to about $22 million, he said.

To counter the declines, the church sold a 170-acre retreat, cut staff and canceled its "Glory of Easter" program. One of the vendors that provided the animals for that service is among the church's creditors, along with some television stations and a supplier of high-definition television equipment, Charles said.

The church decided to file bankruptcy after some of its creditors sued for payment, according to the statement. The board of directors on Aug. 27 authorized a bankruptcy filing by Chief Financial Officer Fred W. Southard, according to court papers.

Robert Schuller cited the title of his 1984 book --"Tough Times Never Last, But Tough People DO!" -- as he forecast in the statement that the church will overcome its financial difficulties. Church operations, including the television show, will continue while Crystal Cathedral tries to reorganize and reduce its debts, the church said.

Schuller retired from daily oversight of the church earlier this year. He was succeeded by his daughter, Schuller Coleman.

The Crystal Cathedral is a glass-enclosed building designed to double as a television studio to broadcast the Sunday worship services. The 145-foot wide chancel area can hold 1,000 singers, and the church organ contains 16,000 pipes.

The entranceway contains two 90-foot-tall doors and the alter is dominated by a 17-foot-tall wooden cross decorated with gold leaf.

The case is 10-24771, U.S. Bankruptcy Court, Central District of California (Santa Ana).


© 2010 bloomberg.com

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