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Crystal Cathedral: Schuller family’s claims could leave church broke

November 2, 2012 |  8:36 am

Robert Schuller Crystal Cathedral
The Rev. Robert H. Schuller, the 86-year-old founder of the Crystal Cathedral, appeared in bankruptcy court in downtown Los Angeles on Thursday, hoping to get a final few millions from a ministry that once broadcast his sermons around the world.

The trial is expected to last 10 days to settle monetary claims –- estimated to be in the millions –- made during the ministry's 2010 bankruptcy.

If the Schuller family is paid the claims, it could seriously jeopardize the future of Crystal Cathedral Ministries, Chief Executive John Charles said.

"If they pay everything they are asked, then there will be no money for the cathedral," he said Thursday.

Schuller was accompanied by his wife, Arvella, daughter Carol Milner and son-in-law Timothy Milner, who also have asked for compensation. They are set to testify Friday.

The four allege that Crystal Cathedral Ministries owes them for copyright infringement, intellectual property violations and unpaid contracts.

The family's claims have delayed about $12.5 million in payments to other creditors. Because the case has dragged on so long, many of the church vendors have sold their claims to companies that buy debt.

The ministry, founded in 1955 with a mere $500, grew to international prominence. At one point, the audience for its television show was estimated at 20 million.

A central element of the case is a transition agreement between Schuller and his wife and the church, which guaranteed them compensation in their later years.

Attorneys for the ministry allege that the family treated the church as their own personal treasure chest, rather than a nonprofit corporation.

"As the money flowed in, Dr. and Mrs. Schuller doled out to themselves, their children and their spouses lavish compensation and perquisites that were either completely gratuitous or wholly disproportionate to the services that they were purportedly providing to the debtor," ministry attorneys said in a court filing.

When church income began to decline in the early 2000s, the family "failed to change their ways" and continued to raid the "charitable purse," a filing said.

From 1993 to 2010, four family members received compensation totaling more than $12.7 million. When the ministry filed for bankruptcy in 2010 with more than $50 million in debt, 20 relatives were being paid a total of more than $1.9 million a year, filings indicate.

In November 2011, the church was sold to the Roman Catholic Diocese of Orange in a bankruptcy deal. The ministry is scheduled to move to a nearby Garden Grove church next summer.


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-- Nicole Santa Cruz in downtown Los Angeles

Photo: Rev. Robert H. Schuller, pictured at Crystal Cathedral in 2010, appeared in downtown Los Angeles on Monday for the first day of what is expected to be a 10-day bankruptcy proceeding.