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Bankruptcy court allows Crystal Cathedral to consider new buyers

July 12, 2011 |  7:24 pm

A bankruptcy judge Tuesday allowed the Crystal Cathedral to consider new buyers for its 40-acre property.

The move came after the church's board decided not to go forward with a plan for an Orange County real estate developer to purchase the campus for $46 million.

At a U.S. Bankruptcy Court hearing, Judge Robert Kwan approved the church’s request to partially withdraw from a reorganization plan it filed in May in which Greenlaw Partners was named the primary bidder for the property, entitling the real estate development firm to a fee if outbid.

Bankruptcy filings made Monday indicated that the church was actively seeking other offers in addition to Greenlaw.

"There are other options out there which are viewed by the ministry and the creditors as being more favorable," attorney Marc Winthrop, who represents the Crystal Cathedral, told the court.

The next bankruptcy hearing is scheduled for Aug. 1.

The iconic Garden Grove church, founded by the Rev. Robert H. Schuller, filed for bankruptcy protection last fall, citing more than $50 million in debt.

The church’s executive board is currently considering multiple options -– including offers from the Roman Catholic Diocese of Orange and Chapman University -- and will need time for financial advisers to evaluate such proposals, lawyers said in court.

Attorney Nanette Sanders said the unsecured creditors she represents in the case fully supported the church’s decision to look at other options and hoped that a recently filed plan naming Chapman University as a potential buyer "had something to do with it."

Several objections had been filed in response to the original exit strategy, in which Greenlaw offered lease-back and buy-back options to the church while proposing to turn portions of the property into apartment buildings.

An amended reorganization plan is expected in the coming months, possibly with the church naming a new buyer. The plan, which would need to be voted on by creditors, also would address any outstanding objections, including one regarding the future of the church’s cemetery.

Attorneys for Greenlaw opposed the motion and did not comment.

-- Nicole Santa Cruz