Bankruptcy Docs Reveal Extravagent Expenses at Crystal Cathedral

Oct. 21, 2010— -- The California megachurch founded by television evangelist Robert H. Schuller used to spend the fall preparing for its lavish "Glory of Christmas" spectacular.

But the Crystal Cathedral, which filed for Chapter 11 bankruptcy this week, will likely spend the coming weeks trying to restructure its staggering debt.

"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. Services and programs at the landmark church will continue, including the "Hour of Power" TV program, she said.

Still, the beleaguered glass cathedral canceled its "Glory of Easter" for the first time this year and could be forced to cancel its popular Christmas spectacular next month. The pageants, which charged up to $45 admission, drew thousands of people.

"It was a very big production," said Juliet Noriega, the wardrobe manager for the pageants, who claims she is owed more than $11,000. "The three wise men rode in on camels. The roman centurions made their entrances on horses. Because the cathedral was such a large venue everything they did there was quite large. There were 200 people on stage and thousands of costume pieces."

Other long-time vendors for the "Glory of Christmas" pageant still waiting to get paid are Kristina Oliver, who supplied camels, horses and sheep; dry cleaner Bruce Johnson, who cleaned the actors' costumes; props manager Sharon Crabtree, and Carin Galletta, whose public relations firm handled the publicity.

"There would be mainly three big camels that the kings would ride and five horses, a donkey, and goats and sheep," said Oliver, who is owed more than $50,000, according to court papers. "It would be two months that I would be down there on the grounds."

In a statement on Monday, Schuller Coleman said the bankruptcy filing was necessary because a small number of creditors chose to file lawsuits and obtained court-ordered writs to attach the church's bank accounts and assets in an attempt to get paid immediately.

No Manna From Heaven

The cathedral owes about $7.5 million to unsecured creditors and it has a $36 million mortgage on its sprawling 40-acre grounds in Garden Grove. According to court papers, the church has assets of between $50 million and $100 million.

"For these reasons, the ministry now finds it necessary to seek the protection of a Chapter 11," she told reporters.

The church's money troubles have forced it to lay off 140 people in the past year, halve its "Hour of Power" air time and even dismiss its orchestra and professional choir singers, church officials have said. The church choir is now made entirely up of volunteers. In May, the church sold land donated by a San Juan Capistrano couple for $22.5 million.

The cathedral decided to file for Chapter 11 only after some of its creditors sued for payment, according to church officials. Hundreds of creditors could be owed between $50 million and $100 million, according to documents filed in U.S. Bankruptcy Court. Its largest creditors include several television stations.

The iconic church was founded by the Rev. Robert H. Schuller in a rented drive-in movie theater in 1955 and came to prominence through the "Hour of Power" television show, which reaches millions of viewers.

In January, faced with a $55 million budget deficit and a 27 percent drop in revenue over the last two years, the church began slashing costs.

At a news conference Monday, Schuller recalled her father's popular proverb, "Tough times never last, but tough people do." She stressed that the church's "message of hope will continue."

Schuller did not return phone calls seeking comment.