Crystal Cathedral files for bankruptcy protection

First came the layoffs, then the cutbacks in programming. Now the Crystal Cathedral, the beleaguered glass megachurch in Orange County, has filed for bankruptcy protection.

The church decided to file for Chapter 11 after some of its creditors sued for payment, according to church officials. Hundreds of creditors could be owed between $50 million and $100 million, according to documents filed in U.S. Bankruptcy Court in Santa Ana on Monday.

“Our ministry will continue as usual,” said Senior Pastor Sheila Schuller Coleman, speaking under an overcast sky Monday afternoon at the church’s sprawling 40-acre Garden Grove campus. She said that if anything, the recent troubles will give the church’s messages more meaning.

The church was started by the Rev. Robert H. Schuller in a rented drive-in movie theater in 1955 and came to prominence through the “Hour of Power” television show. But in January, faced with a $55-million budget deficit and a 27% drop in revenue over the last two years, it eliminated some of its signature offerings and sold property.

The church slashed dozens of jobs, pulled the “Hour of Power” from seven stations and canceled its annual Christmas and Easter pageants, which drew thousands of people.

Earlier this year, the organization was sued in Orange County Superior Court by some of its creditors.

“We want to pay our vendors back,” said Jim Penner, the executive producer of the “Hour of Power” show. Penner said the church couldn’t cut costs fast enough to deal with the economic downturn, decline in donations and aging congregation. He estimated the national audience for the show at between 800,000 and 1 million.

Now, the church is paying cash for everything with the main goal to “stay out of credit card debt,” Penner said. The church owes $7.5 million to vendors and has a $36 million mortgage on the property.

According to documents, the church has assets of between $50 million and $100 million. The board of directors authorized a bankruptcy filing Aug. 27, according to court papers.

At a news conference Monday, Schuller reiterated her father’s popular proverb, “Tough times never last, but tough people do.” She assured viewers that the church’s “message of hope will continue.” She said that despite the economic hardships, the most recent financial reports for the ministries indicate the best cash flow in 10 years.

In February, Coleman told The Times that the organization “can’t spend more than we bring in.”

“The reality is that the church has to operate like a business,” she said at an interview in her office. She said the church is going through a “regeneration,” in which younger families are arriving to fill out a predominantly elderly congregation.

In 2006, Coleman’s brother, Robert A. Schuller, succeeded his father to head the ministry. But by fall of 2008, the father and son decided to part ways in a messy family dispute. Last summer, the elder Schuller told congregants that he would return to a prominent role at the church for two years and that his daughter would be his co-leader. Some said the dispute was a disappointment for congregants, who expected consistency.

All programming, services and education, including the Crystal Cathedral Academy and High School, will go on as usual.

nicole.santacruz@latimes.com