Members of Crystal Cathedral's Schuller family borrowed money from an endowment fund and collected hefty salaries and perks even as the Orange County church struggled to pay its bills, according to a lawsuit filed by the creditors committee in the bankruptcy case.
The lawsuit is the latest sign of 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. But Schuller, his wife and other relatives want to be paid the same time as other creditors -– which resulted in the lawsuit, filed last week.
The claim also alleges that the ministry borrowed about $10 million from an endowment fund from 2002 to 2009.
The creditors also contend 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 Carol Schuller 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.
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.
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Photo: A creditors committee has filed a lawsuit against church insiders in the Crystal Cathedral bankruptcy proceedings. Credit: Arkasha Stevenson / Los Angeles Times
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