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Schuller fires back over lawsuit filed by Crystal Cathedral creditors

October 4, 2011 | 10:26 pm

Crystal Cathedral creditors file lawsuit against church insiders

Crystal Cathedral founder Robert H. Schuller on Tuesday disputed allegations in a lawsuit filed by the church's creditors' committee, and said that the ministry's executive board has always acted in "good faith" regarding the best interests of the church.

"This lawsuit makes serious and untrue allegations regarding myself and my family," Schuller said in a statement. "It is unfortunate that I will have to defend this lawsuit only to prove what is true."

The lawsuit is seeking to pay church insiders -- including Schuller, his wife, Arvella, daughters Carol and Jeanne and their husbands, son Robert Anthony and his wife -- last upon the sale of the Garden Grove campus. It also includes former Chief Financial Officer Fred Southard, who resigned in January.

Court documents allege that, before filing for Chapter 11 almost one year ago, church officials borrowed about $10 million from an endowment fund from 2002 to 2009. It also outlines various agreements between family members and the church, which include a contract regarding Robert H. Schuller entitling him to a $300,000 annual discretionary fund plus health insurance and travel staff for the rest of his life.

Document: Read the full lawsuit

Contracts between other family members are also referenced in the suit, including an agreement to provide a Mercedes-Benz for Robert Anthony's new church and to provide Paul Dunn, Schuller's son-in-law and producer for the church's annual pageants, round-trip tickets from his home in Hawaii to California, as well as a $20,000 license fee for each play. The lawsuit also alleges that Dunn was paid even though the pageants were cancelled in 2009 and 2010.

Nanette Sanders, the attorney for the creditors' committee, said in an e-mail that she has not seen Schuller's statement, but said the complaint was filed based upon information obtained from Crystal Cathedral Ministries during the course of the bankruptcy case, or received from third parties.

In the statement, Schuller said a vast number of creditors have sold their claims to "various spectators who are attempting to make a return if the ministry's campus is sold." In late July, church officials announced they would withdraw their plan to sell, and instead raise the money needed -- more than $50 million -- to pay off debts.

In August, the committee filed a potential bankruptcy exit plan for the church, which includes selling the Garden Grove campus. So far, the Roman Catholic Diocese of Orange and Chapman University are top contenders, with bids of $53.6 million and $50 million, respectively. The plan is for a buyer to be chosen by Halloween.

Schuller said that actions by the church's board of directors were undertaken in "good faith" and with the best interests of the church in mind. He said the ministry board also has been held accountable to an audit committee, which no family members have ever been a part of.

"I look forward to bringing the truth to light so that the ministry to which I have devoted my life over the last six decades can finally emerge from the legal negativity and continue on with its positive message for decades to come," he said in the statement.

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-- Nicole Santa Cruz in Orange County

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

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