Crystal Cathedral Bankruptcy
The U.S. trustee and creditors in bankruptcy proceedings questioned spending at the Garden Grove-based megachurch Crystal Cathedral, after church officials filed for Chapter 11 bankruptcy protection in October 2010.
The documents, filed in U.S. Bankruptcy Court in Santa Ana, give a first look into the long-questioned financial practices of the church, which employs more than a dozen family members and in-laws of founder Robert H. Schuller. Church officials have cited the bad economy and a 24% drop in donations in 2009 for its financial problems. More than 550 creditors are owed between $50 million and $100 million, according to the initial filing.
The early objections from the federal trustee and creditors committee include questionable housing allowances for church insiders and what appear to be redundant jobs and responsibilities.
— Abby Sewell and Nicole Santa Cruz
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The Crystal Cathedral’s creditors committee filed a statement that outlines a potential exit plan for the bankrupt church. The cathedral board can choose the buyer in one option and in another, the creditors will choose a buyer for the church.
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A Norco-based church has filed papers in federal bankruptcy court saying it will pay $50 million in cash for the financially troubled Crystal Cathedral in Garden Grove on the condition that family members of cathedral founder Robert H. Schuller and staff members resign from the organization’s board of directors.
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Crystal Cathedral filed a 160-page statement, which details its financial affairs in the year leading up to its bankruptcy filing. The document includes payroll information, land sales and payments to family members and insiders.
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The document gives a snapshot of the church’s assets and debts, including a listing of all property it owns.
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Garden Grove-based mega-church Crystal Cathedral filed a voluntary petition for Chapter 11 bankruptcy protection on Oct. 18. The church estimated its debts at $50 to $100 million.
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The committee representing Crystal Cathedral’s creditors objected to the church’s request to pay William Gaultiere, part-time Pastor of Spiritual Formation Ministries and son-in-law of Chief Financial Officer Fred Southard, an annual total of $61,955.92, including a $59,202 tax-exempt housing allowance. The committee suggested the role could be filled by volunteers.
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The creditors and U.S. trustee both objected to the church’s proposal to pay programming director Gretchen Penner (the daughter of founding pastor Rbert H. Schuller) $69,525 and her mother-in-law and programming manager Neva Penner Klaassen $55,100. The objections described the women’s duties as duplicative.
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Crystal Cathedral’s requests for insider compensation for programming director Gretchen Penner and programming manager Neva Penner Klaassen—included as exhibits with the U.S. trustee’s objections—lays out her compensation package, background and job description.
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The creditors and U.S. trustee both objected to the church’s proposal to pay programming director Gretchen Penner (the daughter of founding pastor Rbert H. Schuller) $69,525 and her mother-in-law and programming manager Neva Penner Klaassen $55,100. The objections described the women’s duties as duplicative.
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The U.S. trustee and creditors in bankruptcy proceedings have questioned spending at the Garden Grove-based megachurch Crystal Cathedral, which filed for Chapter 11 bankruptcy protection in October.
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Crystal Cathedral’s requests for insider compensation for programming director Gretchen Penner and programming manager Neva Penner Klaassen—included as exhibits with the U.S. trustee’s objections—lays out her compensation package, background and job description.
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The creditors and U.S. trustee both objected to the church’s proposal to pay programming director Gretchen Penner (the daughter of founding pastor Rbert H. Schuller) $69,525 and her mother-in-law and programming manager Neva Penner Klaassen $55,100. The objections described the women’s duties as duplicative.
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Crystal Cathedral’s creditors objected to the proposed compensation package for Chief Financial Officer Fred Southard, which includes a $140,000 tax-exempt housing allowance. The creditors called Southard a “figurehead.”
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The U.S. trustee also objected to CFO Fred Southard’s compensation and particularly to the generous housing allowance. The trustee’s objection includes a copy of the original request for insider compensation filed by the church on Southard’s behalf.
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