The Roman Catholic Diocese of Orange has filed a petition in bankruptcy court to block the sale of the 40-acre Crystal Cathedral campus to Chapman University, stating that the plan will not pay creditors in full and will set up the ministry for failure predicting that the cathedral, under that plan, could run out of cash by next May.
The diocese’s offer for $53.6 million is the better and more superior bid for the Crystal Cathedral property compared to the $50 million offered by Chapman University, its attorneys argue in the petition filed Friday.
The Roman Catholic Diocese of Orange has filed a petition in an attempt to block the sale of the Crystal Cathedral to Chapman University.
Last week, Crystal Cathedral administrators announced that their board has selected Chapman as the preferred buyer. Papers with regard to the sale are expected to be filed in bankruptcy court Monday. A confirmation hearing has been scheduled for 9 a.m. Nov. 14.
The difference between the two plans is that while Chapman offers the church the option to lease back core church buildings and buy them back within five years, the diocese’s plan calls for a three-year leasing plan and proposes that the ministry move to an alternative worship space offered by the diocese at a reduced rate, according to the diocese’s petition. Crystal Cathedral Ministries will also then have the option to buy that property at 90 percent of the market rate, the filings state.
The diocese states that based on Crystal Cathedral Ministries’ revenues and expenses over the last year or so, it is highly improbable that they will make the monthly lease payments ranging between $150,000 and $215,000 to Chapman. This will cause the ministry to default on lease payments and get forced out of the campus or liquidate their assets, the diocese states. Crystal Cathedral “is attempting to sell the campus for a lower price while taking on a greater risk,” the diocese’s court filings state.
Donations to the cathedral have plummeted since it filed for bankruptcy protection from its creditors a year ago, according to monthly operating reports filed in court. The ministry collected $2.3 million in donations last November, its first full month in bankruptcy, versus just $1.3 million in September, a 42 percent decline.
This seems to make sense to me. The CC wants to take the deal that they think will give them the best chance of staying in their facility. But the case that they will not be able to make the lease payments also seems plausible.
QUESTION: Do you think the CC will still be a church in 5 years?