《杨清泉律师专栏》CRYSTAL CATHEDRAL FILES FOR BANKRUPTCY PROTECTION(Part I)

CRYSTAL CATHEDRAL, the mega-church founded by Rev. Schuller based in Garden Grove in Orange County filed for bankruptcy protection this week. The church is well-known for four things, its huge structure that is totally made of glass, its ‘Hour of Power’ TV program, and the 2 spectacular Las Vegas type shows on Easter and Christmas called the ‘Glory of Easter’ and the ‘Glory of Christmas.’ Both shows are live-action pageants that tell the story of Easter and Christmas with flying angels, live animals that include a parade of camels, sheep, horses and donkeys performed inside the magnificent architectural work of glass that is the church itself. Tickets for the shows are very cheap at $20 to $45 compared to equivalent Las Vegas shows that cost over $120. I had the opportunity of watching the ‘Glory of Christmas’ 20 years ago. Indeed, it was spectacular and impressive for a bargain price.

The first signs that the CRYSTAL CATHEDRAL had serious financial problems came out in January of this year when the church announced that it was cancelling the ‘Glory of Easter’ this year. Then it shuttered its facility in Capistrano used for retreats and weddings laying-off 50 employees there. Thereafter, the church sold the Capistrano property which was donated by a couple to the church, for $22 million in May. Previously, church officials announced the ‘Hour of Power’ will go dark in several local stations in the country. At that time, the church said that the program viewed by millions worldwide saw a 30% drop in income since January 2009. In 2008, the program already experienced a decline in revenue from 2007 to 2008 of almost 20%. Hence, the program has suffered a 50% decline in revenue or income between 2007 and now. Faced with a shortfall of $55 million in its budget and declining revenues, the church decided to cut costs and sell assets. Unfortunately, cost cutting and asset sales were insufficient and not fast enough to keep creditors of the church happy. The animal supplier who supplied camels, horses and sheep is owed $50,000 and the wardrobe manager is owed $11,000.

The church decided to file for Chapter 11 bankruptcy reorganization after some of its creditors sued for payment of unpaid bills and obtained writ attachments to garnish the bank accounts of the Church. Hundreds of creditors could be owed between $50 million to $100 million according to documents filed in bankruptcy court in Santa Ana. Its largest creditors are television stations. Further, the church owes $7.5 million to unsecured creditors and has a $36 million mortgage on its 40 acre property in Garden Grove. The church estimates that it has assets of $50 million to $100 million. Since the church started experiencing financial problems, it has laid-off 140 people in the past year, cut its ‘Hour of Power’ air-time in half and has even dismissed its orchestra and professional choir singers. The choir is now made up entirely of volunteers.

《楊清泉律師專欄》CRYSTAL CATHEDRAL FILES FOR BANKRUPTCY PROTECTION(PART II)