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Sale of Crystal Cathedral delayed

The sale of the bankrupt Crystal Cathedral to the Roman Catholic Diocese of Orange has been delayed, in part because of a purported 99-year lease brought to the court's attention days before the sale was to be finalized.

On Jan. 25, lawyers in the case received a letter detailing an agreement that entitles the Crystal Cathedral congregation to the long-term lease for $1 per year. The diocese, which said it "has serious doubts regarding the alleged lease's existence," demanded signed copies of the lease by Jan. 27. The Crystal Cathedral was unable to produce any documentation.

The letter, written by Joseph Haney III, a lawyer for the congregation, supports the contention that there is such a lease. It cites a 1987 Los Angeles Times article in which cathedral founder the Rev. Robert H. Schuller said the transaction was an attempt at "safeguarding and securing the beautiful church property."

In court documents, diocese lawyers said the Crystal Cathedral had "waited until the last possible minute to raise its disputed claims, apparently in an effort to ambush and waylay the closing of the sale."

They added that the Crystal Cathedral "cannot credibly claim" that it was unaware of the pending sale.

U.S. Bankruptcy Court Judge Robert Kwan approved the sale of the Garden Grove campus to the diocese for $57.5 million on Nov. 17, with a Jan. 31 closing mandated by the court. That date has been pushed to Feb. 17, although the deal could close sooner.

Beginning Wednesday, the diocese will incur higher loan interest charges of $1,768.95 per day, according to court documents. That is nearly triple the interest it had been paying.

The Crystal Cathedral's attorney, Marc Winthrop, said the judge on Monday granted an emergency motion to amend the sale terms as a way of exercising excess caution, and called the motion a "clarification."

"We'll just close when we can," Winthrop said.

Stephen Bohannon, the spokesman for the diocese, said that although the delay was unexpected, it's not a concern.

"It's part of the normal process," he said.

nicole.santacruz@latimes.com

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