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Bankrupt Crystal Cathedral to rely on faith; new suitor emerges

August 1, 2011 |  3:25 pm

The Crystal Cathedral

The bankrupt Crystal Cathedral will step aside while its creditors committee works on a plan for the church to exit bankruptcy, lawyers said in a hearing Monday.

Crystal Cathedral will try to exit bankruptcy, has a new suitor On Sunday, the church announced that it would back away from considering proposals to purchase the Garden Grove campus in favor of attempting to raise more than $50 million to repay creditors through donations.

Marc Winthrop, the cathedral’s bankruptcy attorney, reaffirmed that the church is relying on a "faith-generated belief" that funds will be generated, while recognizing that the creditors committee will move forward with a plan to exit bankruptcy.

If the church is able to raise funds before a creditors plan is approved by bankruptcy judge Robert Kwan, it will file an exit plan, Winthrop said.

Winthrop said the church has a duty to make "our best efforts to make sure" all creditors are paid.

The creditors committee could file a proposal in the next week, and a hearing  regarding the plan is scheduled for Sept. 14.

Nanette Sanders, the lawyer for the creditors, said the committee is currently "fine-tuning" a plan but did not name a potential buyer.

She added that she had been approached before the hearing by a new potential buyer, Robert Lee Tran Truong of Garden Grove.

After the hearing, Truong told The Times he wants to purchase the church and its grounds for $99 million to use as a ministry and for his organization, the nonprofit God’s Way Institute, a church and a school.

Truong also suggested he might use the campus for commercial purposes, mentioning a mall as one possibility.

Fred Southard, the church’s former chief financial officer, attended Monday's hearing. He retired in January after his $132,000 tax-exempt housing allowance was questioned by the U.S. trustee in court.

He had his doubts about the church being able to raise $50 million.

"I don’t know how you contact enough people to pull this off," he said.

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-- Nicole Santa Cruz

Photo: The Crystal Cathedral. Credit: Arkasha Stevenson / Los Angeles Times

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