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Church family loses court ruling

The Schullers get just under $700,000 at bankruptcy hearing. Founder's daughter calls it a 'travesty.'

November 27, 2012|Nicole Santa Cruz
  • Robert Schuller, left, and his wife, Arvella, leave bankruptcy court in downtown Los Angeles. Schuller — the founder of Crystal Cathedral and the face of the globally watched “Hour of Power” TV program — and his family will be paid just a fraction of the millions they sought from the preacher’s bankrupt ministry.
Robert Schuller, left, and his wife, Arvella, leave bankruptcy court in… (Francine Orr, Los Angeles…)

the founder of Crystal Cathedral and the face of the globally watched "Hour of Power" television program --and his family will be paid just a fraction of the millions they sought from the preacher's bankrupt ministry.

Schuller's daughter, Carol Milner, described Monday's ruling on intellectual property, copyright infringement and contract violations as a "travesty" that leaves the family no choice but to "start liquidating everything."

For The Record
Los Angeles Times Wednesday, November 28, 2012 Home Edition Main News Part A Page 4 News Desk 2 inches; 83 words Type of Material: Correction
Schuller bankruptcy ruling: In the Nov. 27 LATExtra section, a production error caused several names to be misspelled in an article about a bankruptcy-court ruling regarding Crystal Cathedral founder Robert H. Schuller and his family. The first name of attorney Nanette Sanders was altered to Nannette. The last name of contractor Wes Lasken was altered to Lassen. Arvella Schuller's first name was altered to Arbela. And Judge Robert N. Kwan's last name was altered to Kwa. In addition, glass-paned was misspelled as glass-panned.

"It's an avoidance of responsibility for an organization to not take care of those who have gone before them. It's tragic," she said. "But sometimes tragedies speak louder than other stories."

Schuller alone had sought $5 million, and additional claims from the family -- some that did not state specific amounts -- would have pushed the family's demand far higher. The court gave the family slightly less than $700,000.

The ruling marks a final chapter in the financial unraveling of a ministry that once made Schuller a powerhouse in American Christianity.

The bankruptcy was "long and painful for everyone involved, and our congregation is ready to move on," said John Charles, the chief executive of Crystal Cathedral.

The ministry, which is now estranged from Schuller and has struggled to fill collection plates, will vacate the glass-panned cathedral in Garden Grove next summer and hold services in a Catholic church.

Monday's ruling out of Los Angeles bankruptcy court also clears the way for Crystal Cathedral's remaining creditors -- some of them small-time vendors who helped stage the church's opulent Christmas and Easter services -- to collect on more than $12 million they claim they are owed by the Garden Grove-based ministry.

Because of the Schuller family claims, creditors were delayed payments. Now the creditors could be paid off before the end of the year, said Nannette Sanders, an attorney who worked on the case.

"It's the result we had hoped for," Sanders said.

Other creditors chose not to wait for the closure of the 2010 bankruptcy, and some -- such as the Riverside County business that provided the camels, donkeys and sheep for the church's Christmas pageant -- have sold their claims to firms that purchase debt.

Wes Lassen, a contractor from Running Springs who is owed about $2,100 for services he performed three years ago, said the money will help him "substantially."

"It might actually keep me in business another year," he said.

The ruling cut short a10-day trial focused on unpaid contracts and copyright infringement claims filed by Schuller, his wife, Arbela, his daughter and his son-in-law.

Judge Robert N. Kwa wrote that Schuller will receive about $600,000 because he failed to prove that intellectual property and copyright violations took place. Less than $100,000 will be divided by other family members.

As attorneys read the lengthy ruling in court Monday, Schuller and his wife held hands and waited silently.

In the 55-page ruling, Kwa referenced Schuller's testimony earlier this month in which the pastor, 86, said that the Crystal Cathedral never infringed on his intellectual property rights. Schuller appeared to not remember when he founded the "Hour of Power" and also said he was still on the board of directors for the Crystal Cathedral.

The ministry, once known for its showy services and uplifting sermons, filed for bankruptcy protection in 2010, citing $50 million in debt.

The claims led to Schuller and his wife's resignation from the ministry's board of directors. Within days, his daughter, then the senior pastor, left the church to start her own ministry, effectively severing all ties that the founding family had to the church.

"We love the Schullers and wish them well," Charles said.

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nicole.santacruz@latimes.com

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