Rev. Schuller claims Crystal Cathedral owes his family millions

Dressed in a crisp black suit, the 86-year-old founder of the Crystal Cathedral sat in the downtown Los Angeles Bankruptcy Court on Thursday, hoping to get a final few million from the ministry that once carried his booming sermons to people around the world.

The Rev. Robert H. Schuller was in court on the first day of what is expected to be a 10-day trial to settle the monetary claims that were made during the 2010 bankruptcy of the ministry, which is the home of “Hour of Power,” its trademark television show.

If the claims — estimated to be in the millions of dollars — are paid to the family, it could seriously jeopardize the future of Crystal Cathedral Ministries, Chief Executive John Charles said.

“If they pay everything they are asked, then there will be no money for the cathedral,” he said Thursday.

Schuller was accompanied by his wife, Arvella, daughter Carol Milner and son-in-law Timothy Milner, who also have asked for compensation. They are set to testify Friday.

The four allege that Crystal Cathedral Ministries owes them for copyright infringement, intellectual property violations and unpaid contracts.

The family’s claims have delayed about $12.5 million in payments to other creditors. Because the case has dragged on so long, many of the church vendors have sold their claims to companies that buy debt.

The ministry, founded in 1955 with a mere $500, grew to international prominence. At one point, the audience for its television show was estimated to stand at 20 million.

So influential was Schuller that he was routinely sought out by political leaders. In 1997 he had breakfast with President Clinton, and that night Clinton quoted Schuller in his State of the Union address.

Schuller said in court documents that he once counted celebrities such as John Wayne, Frank Sinatra, Lucille Ball and Johnny and June Cash as friends.

As his fame increased, his ministry became known for its extravagant Christmas pageants, which featured flying angels and live farm animals. Schuller said in court documents that he was the church’s main fundraiser.

A central element of the case is a transition agreement between Schuller and his wife and the church, which guaranteed them compensation in their later years.

Schuller claims that he allowed the ministry to use the family’s intellectual property, but that the ministry began to exploit his work in ways that he had “never contemplated” such as by selling recordings of him online.

“We did not understand it,” Schuller said in a court document, referring to the Internet. “I have never and would never give CCM consent to use my intellectual property in ways that I could not understand.”

Attorneys for the ministry allege that the family treated the church as their own personal treasure chest, rather than a nonprofit corporation.

“As the money flowed in, Dr. and Mrs. Schuller doled out to themselves, their children and their spouses lavish compensation and perquisites that were either completely gratuitous or wholly disproportionate to the services that they were purportedly providing to the debtor,” ministry attorneys said in a court filing.

When church income began to decline in the early 2000s, the family “failed to change their ways” and continued to raid the “charitable purse,” a filing said.

From 1993 to 2010, four family members received compensation totaling more than $12.7 million. When the ministry filed for bankruptcy in 2010 with more than $50 million in debt, 20 relatives were being paid a total of more than $1.9 million a year, filings indicate.

In November 2011, the church was sold to the Roman Catholic Diocese of Orange in a bankruptcy deal. The ministry is scheduled to move to a nearby Garden Grove church next summer.

When Schuller exited the courtroom Thursday, he appeared to be in good spirits.

“Thank you all very much,” he told the opposing attorneys with a smile.

nicole.santacruz@latimes.com