By Nicole Santa Cruz
Los Angeles Times
October 4, 2011
http://www.latimes.com/news/local/la-me-1004-crystal-cathedral-20111004,0,7589478.story
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| The Rev. Robert H. Schuller at the pulpit last year. A lawsuit alleges that Schuller family members used “control and influence” to enter the church into agreements that benefited the family to the detriment of the creditors. (Allen J. Schaben, Los Angeles Times) |
The lawsuit alleges that family members, including founder Robert H. Schuller, borrowed money from an endowment fund and continued to receive generous salaries and perks even as the church struggled financially.
The creditors committee in the Crystal Cathedral bankruptcy case has filed suit against church insiders, alleging that family members borrowed money from an endowment fund and continued to receive generous salaries and perks even as the church struggled financially.
The lawsuit is the result of a conflict between the committee and church insiders, who include family members of founder Robert H. Schuller. According to a bankruptcy exit plan filed by the committee, insiders will be the last paid after the sale of the church campus.
Insiders such as Schuller; his wife, Arvella; and daughter Carol Schuller Milner and her husband, Timothy, want to be paid at the same time as other creditors. As a result, the committee vowed in August to sue.
The claim, filed late last week, alleges that the ministry borrowed about $10 million from an endowment fund from 2002 to 2009.
The lawsuit also alleges that family members used "control and influence" to enter the church into agreements that benefited the family to the detriment of the creditors. The suit is asking that family members, or insiders, receive payment after every other vendor is paid off when the bankruptcy is settled.
"We think that the allegations of the complaint will ultimately be proven to be untrue," said Carl Grumer, the lawyer for Schuller, his wife, his daughter Milner and her husband. He said the suit will not affect the anticipated sale of the church.
The lawsuit outlines several agreements between the Schullers and the church. According to the documents, Robert H. Schuller signed a transition agreement in which he is entitled to a $300,000 annual discretionary fund, plus health insurance and travel staff for the rest of his life.
The agreement, signed in December 2005, also stipulates that his son, Robert Anthony Schuller, be installed as senior pastor. But when Robert Anthony stepped down in 2008, he entered into a contract to start a new church. He received $235,000 to finance the ministry and his regular salary for one year. The church also agreed to provide a Mercedes-Benz for the ministry and to fund its initial phases.
The lawsuit also names Fred Southard — the church's former chief financial officer, who resigned in January after a U.S. trustee questioned a six-figure housing allowance — as well as Schuller family members Jeanne Dunn and her husband, Paul.
The suit alleges that Paul Dunn, the producer of the church's Christmas and Easter pageants, was paid even though the shows were canceled in 2009 and 2010.
Milner said she always believed there were financial safeguards in place. She said she and her husband were not on the board or in management and were not privy to the church's finances.
"This isn't even accurate information," she said about the lawsuit.
A hearing date has yet to be set in the matter.
Contact: nicole.santacruz@latimes.com
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