Crystal Cathedral megachurch files for bankruptcy

GARDEN GROVE, Calif. (AP) -- Crystal Cathedral, the megachurch birthplace of the televangelist show "Hour of Power," has filed for bankruptcy in Southern California after struggling to emerge from debt that exceeds $43 million.

In addition to a $36 million mortgage, the Orange County-based church owes $7.5 million to several hundred vendors for services ranging from advertising to the use of live animals in Easter and Christmas services.

The church had been negotiating a repayment plan with vendors, but several filed lawsuits seeking quicker payment, which prompted a coalition formed by creditors to fall apart, church officials said.

"Tough times never last, every storm comes to an end. Right now, people need to hear that message more than ever," Sheila Schuller Coleman, the Cathedral's senior pastor and daughter of the founder, told reporters Monday outside the worship hall.

"Everybody is hurting today. We are no exception," she said.

The church, founded in the mid-1950s by the Rev. Robert H. Schuller Sr., has already ordered major layoffs, cut the number of stations airing the "Hour of Power" and sold property to stay afloat. In addition, the 10,000-member church canceled this year's "Glory of Easter" pageant, which attracts thousands of visitors and is a regional holiday staple.

Vendors owed money by the church formed a committee in April and agreed to a moratorium to negotiate a repayment plan with the Crystal Cathedral.

Kristina Oliver, whose Hemet-based company provided live animals for the church's "Glory of Christmas" manger scene, said she doubts she will recover in full the $57,000 she is owed.

"The church never made any kind of advancement that they wanted to pay their debt, that they were willing to try to make it happen and every time we tried they told us, 'You can't tell us how to run our business,"' Oliver said.

"I'm upset because I have a 30-year relationship with them and you need to be up front, put all your cards on the table."

Crystal Cathedral was founded at a drive-in theater and attracted congregants with its sermons on the power of positive thinking. It features a soaring glass spire and is an architectural wonder and tourist destination.

The "Hour of Power" telecast, filmed in the cathedral's main sanctuary, at one point attracted 1.3 million viewers in 156 countries.

Church leaders said the telecast and Sunday services will continue while in bankruptcy.

Crystal Cathedral and other megachurches have suffered from the recession and reduced charitable giving.

The church saw revenue drop roughly 30 percent in 2009 and simply couldn't slash expenses quickly enough to avoid accruing the debt, said Jim Penner, a church pastor and executive producer of the "Hour of Power."

Penner said it became difficult to hold the vendors' committee together after several vendors filed lawsuits and obtained writs of attachment to try to collect their cash.

Now, the church is avoiding credit entirely and spends only the roughly $2 million it receives each month in donations and revenue, Penner said. The church still hopes to pay all of the vendors back in full, he said.

"What we're doing now is we're trying to walk what we preach, we're paying cash for things as we go," he said.

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