Crystal Cathedral Bankruptcy | Opens Door to More Offers

SANTA ANA – An attorney representing the Crystal Cathedral in its bankruptcy case told the court Tuesday that the church board is actively considering several offers other than one made by a Newport Beach developer in May.

The cathedral requested and received a partial withdrawal from a plan that would make developer Greenlaw Partners LLC, the main bidder for the 35-acre church campus. The plan, which the church withdrew, also entitled Greenlaw to a "break-up fee" of $920,000 if outbid.

Crystal Cathedral Ministries is considering several proposals from buyers. Church board members say they will favor a proposal that offers the highest price and gets creditors paid right away.

According to an article published by the Orange County Register, "Greenlaw offered $46 million for the church property with a 15-year leaseback of the church's core buildings so Crystal Cathedral's ministries could continue. Greenlaw also proposed a $30 million buyback price and a leaseback for $307,000 per month with 3 percent annual rent increases. In addition, they say they would hundreds of apartment units on a portion of the church's 35-acre campus".

Crystal Cathedral's attorney, Attorney Marc Winthrop, said the church's board needs time to analyze a handful of proposals that are before it. He said the board is no longer looking favorably at Greenlaw's proposal.

"The church is focused on getting the maximum amount of money for the property and getting creditors paid in full on the effective date," he said.

Winthrop said that while Greenlaw's proposal does not satisfy those issues, other proposals that are now before the church board do.

An attorney for Greenlaw, who spoke briefly before the judge, opposed the cathedral's partial withdrawal from the plan citing procedural issues.

Gwyn Myers, a church board member, said she and other trustees are considering several proposals. She did not give a number, but said there were fewer than 10 proposals before them.

Nanette Sanders, the attorney representing the creditors committee, said the committee supports the church's withdrawal from the plan and their willingness to consider proposals other than Greenlaw's.

In a court filing, the committee favored a proposal by Chapman University last week. The university, which hopes to set up a health sciences satellite campus on the property, also offered $46 million for the campus, allowing the church to lease back its core buildings with the exception of the Welcome Center at $150,000 a month for a 15-year-term.

The Chapman plan would also allow the church to repurchase the ministry buildings at $23.5 million and get creditors paid in full on the effective date. But under this plan, the cathedral would lose the Welcome Center right away and the Family Life Center in two years. The university would use those buildings to get its programs and classes started.

The Roman Catholic Diocese of Orange has also expressed interest in purchasing the church property. The Catholic Church has not yet made a formal offer. But Winthrop said last week that if the cathedral is sold to the Catholic Church, Crystal Cathedral Ministries will cease to exist on the campus.

The Roman Catholic Bishop filed an opposition Monday to the cathedral's motion to approve bidding procedures, saying that the procedures were unfairly tilted in favor of the Crystal Cathedral.
In its court filing, the Roman Catholic Bishop stated that the procedures allow the Crystal Cathedral's administrators, the Schuller family, to unilaterally reject offers – even those that may be beneficial to the estate and the creditors.

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Posted in Church Bankruptcy , Crystal Cathedral Bankruptcy , Roman Catholic Diocese Bankruptcy