According to Bloomberg, the Crystal Cathedral, the bankrupt Southern California mega church, has received two offers to buy its campus.
Both were for $46 million dollars and were made by Chapman University and Greenlaw Acquisitions LLC. The agreements would allow part of the 30-acre campus in Orange County, California, to be leased back to the church so they could continue their operations. Details of the offers were outlined in papers filed on July 5, 2011, in the U.S. Bankruptcy Court in Santa Ana, California.
Crystal Cathedral, built by television evangelist Robert Schuller, filed for bankruptcy last October. The church, with their declining attendance, was more than $50 million to $100 million in debt. Further investigations revealed that some of the churches financial difficulties may also have been caused by generous payouts and tax allowances for Schuller family members and church insiders. The church membership is estimated to be approximately 10,000 members. Crystal Cathedral was most well-known for its television show “The Hour of Power”.
Although the church has received interest from several different interested parties, Marc J. Winthrop, Crystal Cathedral’s attorney, acknowledges the decision about buyers is “a long way off.” Winthrop also outlined their churches plan to sell the campus which may be in a court-supervised auction with Greenlaw as the initial bidder.
The Chapter 11 Bankruptcy plan offered by Crystal Cathedral would use cash from the $46 million sale to repay their bank loan of $33.3 million and subsequent creditors over the next two years.
Creditors have argued that Chapman University’s offer is better and are working with the Bankruptcy Judge to let them pursue their own reorganizational plan to counter the plan offered by Greenlaw and Crystal Cathedral. “In light of the clear benefits to the ministry presented by the Chapman University proposal, the committee is simply baffled by the debtor’s position,” creditors said in court papers.
Filing for Chapter 11 Bankruptcy
Whether you own a business, individual or partnership and you are facing a financial crisis, there may be help for you to discharge all or a portion of your debts or to use bankruptcy to restructure your debt payments. Chapter 7 and Chapter 13 Bankruptcies are the most common types of bankruptcies available for individuals, but Crystal Cathedral has chosen to file Chapter 11 Bankruptcy which is common for many businesses.
Chapter 7 Bankruptcy allows an individual to discharge most of their unsecured debt. Not all debtors will qualify for Chapter 7 Bankruptcy. Bankruptcy laws have changed in recent years which have made it more difficult to file for Chapter 7 Bankruptcy. Debtors who cannot file Chapter 7 Bankruptcy may be allowed to file Chapter 13 Bankruptcy. Chapter 13 Bankruptcy allows a filer to create a 3 to 5 year debt repayment plan.
Chapter 11 Bankruptcy is used by businesses to reorganize their debt and allows the business to continue their business operations, create a debt repayment plan and discharge qualifying debt after the completion of the Chapter 11 Bankruptcy repayment plan.
Bankruptcy is an important financial decision and should not be made without first contacting a bankruptcy lawyer.
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