The Crystal Cathedral located in Garden Grove, Calif., files Chapter 11 bankruptcy in an effort to stave off aggressive creditors. The churches administrators have been trying to avoid bankruptcy all together when they shut down all operations at Rancho San Juan Capistrano, including a church, preschool, retreat area, soccer fields, camp grounds and wedding center in March of this year. In May, the church sold the property donated by John and Donna Crean in San Juan Capistrano for $22.5 million. The mega church’s financial woes have continued and led to the sale of several properties, employee layoffs, suspension of its “Glory of Easter” pageant, and now Chapter 11.

Earlier this year, the church’s leadership ordered major layoffs. It also cut the number of stations airing the “Hour of Power” in an effort to avoid filing bankruptcy.

Pastor Rick Warren’s Saddleback Church, like many other religious organizations facing an economic downturn, also had financial issues this past December and was able to avoid bankruptcy. The Church members heeded Warren’s call to quickly raise $900,000, and exceeded it by at least $1.5 million. The church, within days of Pastor Warren’s plea collected about $2.4 million, leaving them with a substantial surplus.

Unfortunately the Crystal Cathedral has not been so fortunate in trying to dig its way out of a $55 million debt. The budget crisis and troubled economy has led to a series of small claims and lawsuits from vendors, many who have worked with the city for decades who say the church owes them money long past due. The church once ran by Pastor Robert H. Schuller is now being run by his daughter Sheila Schuller Coleman. Heading the pack of creditors are the musicians, costume artists, television stations and an equipment finance company. The cathedral’s debt to individual vendors ranges from $700 to $1.9 million.

In previous months the church consummated a deal that bought them 90 days to come up with a repayment plan for its creditors. Unfortunately they were unable to come through and now must file for bankruptcy protection. The Crystal Cathedral is just one among many mega churches that continue to suffer from the recession and reduced donations. As charitable giving has plummeted across the nation and the hard hit California residents are no exception. According to a report released Sunday, donations were down over 10 percent last year. That figure is four times greater than any drop in donations from previous years. With so many southern Californians in foreclosure and facing bankruptcy themselves its anticipated charitable donations will continue to shrink.

The Orange County-based mega church was founded by the Rev. Robert Schuller in the mid 1950s. The church came to prominence through its “Hour of Power” television show. At one time, the weekly TV broadcast was seen by more than one million people in 156 countries.

The church has been suffering for some time now and decided to file Chapter 11 bankruptcy after some of its creditors sued for payment. The church has more than $43 million dollars in debt, including a $36 million mortgage, and $7.5 million owed to several hundred vendors.

Church leaders point to the troubled economy and dwindling contributions. The church saw revenue drop roughly 30 percent in 2009 and simply couldn’t slash expenses quickly enough to avoid accruing the debt.

“The idea is as we go through Chapter 11 we still want to find a way to pay all of our vendors back,” said Jim Penner, producer of “Hour of Power.” “It’s not dodging anything; it’s just that we need a structure to work out this payment structure.”

The church also lost a significant amount of members in the wake of family feud after the elder Robert Schuller retired. Schuller’s son succeeded him, but stepped down after disagreements over the TV ministry. Back in October of 2008 Schuller announced the removal of his son, Robert A. Schuller, in a statement read to some 450 Crystal Cathedral congregants by Jim Coleman, the church’s president. Schuller’s daughter is now the church’s senior pastor and nothing has been the same since.

“Our ministry will continue as usual,” said Dr. Sheila Schuller Coleman. “The churches school will continue to be held here. Our TV services will continue to be aired and our Sunday morning services are continuing as well. If anything our message and our ministry has that much more meaning now.”

 “These are tough times for many Californians, we are seeing a significant increase of small business and multiple property owners filing Chapter 11 bankruptcies in Orange County” says Bankruptcy Attorney James D. Zhou, senior partner of the Law Offices of Zhou & Chini. 

Zhou, who has been a California bankruptcy attorney for 12 years now operates 11 locations throughout California and is one of few bankruptcy attorneys who handles complex Chapter 11 bankruptcy filings. Coincidently, the Law offices of Zhou & Chini have office locations in both San Juan Capistrano and Irvine, as well as several locations in Los Angeles, Riverside and San Diego counties. To get more bankruptcy information or to locate a local bankruptcy attorney visit www.Californiabankruptcyinformation.com