Lawsuit: Schullers flourished as church suffered
By DEEPA BHARATH / THE ORANGE COUNTY REGISTER
Published: Oct. 3, 2011 Updated: 6:05 p.m.
A complaint filed by creditors in bankruptcy court alleges that insiders benefited from their contracts while contractors went unpaid for services they provided.
SANTA ANA – A lawsuit filed by creditors against several members of Crystal Cathedral founder Robert H. Schuller's family alleges that the older Schuller and his family members used their power and position to give themselves generous salaries, housing allowances and other benefits while the church struggled financially over the last nine years.
In addition, the complaint filed Friday states that Crystal Cathedral Ministries borrowed more than $10 million between 2002 and 2009 from endowment funds, which were meant to pay for specific items such as maintenance of the Walk of Faith memorial stones on the campus. The money was then used for regular church expenses and salaries, the lawsuit alleges.
The creditors committee has asked the court to "subordinate" claims made by Schuller family members so they get paid only after unsecured creditors, who are owed more than $7.5 million by the megachurch, get paid.
This complaint is a part of the bankruptcy proceedings, but it will not influence the sale of the church's 40-
Carl Grumer, an attorney representing Robert H. Schuller, his wife, Arvella, daughter Carol Schuller Milner and son-
Schuller's daughters Carol Schuller Milner and Jeanne Schuller Dunn said the complaint contains a number of inaccuracies and misrepresentations.
"I'm relieved that they made these statements because now with discovery, the truth will come out," Carol Milner said.
The complaint, filed by Nanette Sanders, an attorney representing hundreds of creditors, singles out all Schuller family members who have filed claims in bankruptcy court.
Here is a list of benefits family members received, according to the complaint:
* Robert H. Schuller was given a discretionary fund of $300,000 after he handed over the ministry to his son Robert A. Schuller in 2006. He continued to receive compensation and housing allowances and received as much as $257,000 in 2009. He was also granted access to a 12th floor office suite. Schuller's agreement also guarantees both him and his wife, Arvella, health insurance, staff and travel staff for the rest of their lives. Schuller's claim: $55,226.27. Robert H. Schuller International, Schuller's company, also demands contractual payments totaling $223,078.09.
* Robert A. Schuller who resigned as senior pastor in 2008 was given a $235,000 reserve fund to help found a new church. Both he and his wife, Donna, were to be paid salaries and benefits for a year after they left. Under the agreement, Crystal Cathedral Ministries also agreed to give Robert A. Schuller's new church a Mercedes Benz vehicle and $1 million in seed money for the new church. If a new church was not established, the younger Schuller and his wife would receive full salary and benefits for one additional year. The couple also occupied a condominium in Laguna Beach that was owned by the church. Robert A. Schuller's claim: $1.4 million.
* Paul and Jeanne Dunn: Both Paul and his wife Jeanne Dunn were compensated until the filing of bankruptcy for producing the Glories although the pageants were not produced in 2009 and 2010. Dunn's agreement in 1992 gave him retirement benefits, life insurance, medical and disability insurance, paid staff, business, housing and car allowances. He was also allowed eight round trips per year from Hawaii, where he lives, to California. Paul Dunn's claim: $52,037.57; Jeanne Dunn's claim: $25,908.
* Tim and Carol Milner: The suit alleges that Tim Milner received $10,000 per month in salary since 2006 to provide services at the discretion of his father-
* Fred Southard: The only insider who was not a Schuller family member, Southard was the CFO of Crystal Cathedral ministries who retired early this year. He received a tax-
The complaint argues that while most family members did not add any benefit to the ministry, the vendors who provided services to the church went unpaid.
"R.H. Schuller used his control and influence to cause the (cathedral) to enter into the agreements that benefitted himself and his family, to the detriment of the creditors and in breach of his fiduciary duties to the (church)," the suit states.
Jeanne Dunn said she and her husband did not receive payments for shows they did not produce.
"In fact, we paid out of our pockets to cover catering expenses for the last "Glory of Christmas" production," she said. "We absorbed multiple expenses."
Although Paul Dunn had those travel benefits in his contract, he never used them, Jeanne Dunn said.
"All our contracts were approved by an independent board," she said. "My family has always tried to be above board with everything. But that never makes the headlines."
Carol Milner, who spoke on behalf of her husband and her parents, said her husband was responsible for putting the Crystal Cathedral on the Internet. He was also responsible for expanding the Ministry for Ministers from 100 pastors to 1,500, she said.
"To say none of the family members have done anything for the ministry is ridiculous," she said.
Her father's books have brought millions to the ministry, but he never claimed royalties or profits from those sales, Milner said. She helped co-
"But, I never took a dime for it," she said. Over the last few years she has helped her parents manage copyright issues.
Her father, for example, owns his sermons and slogans, she said.
"It is very important to make sure they are used appropriately and that's my job," she said. "In addition to that, I help my parents with whatever they need."
It wasn't until the last two years that she understood the financial struggles of the church, Milner said.
"We had no way of knowing because none of us was part of the board," she said. "We didn't even attend board meetings. We were not the decision makers."
The endowment money, Milner said, was borrowed against based on advice the older Schuller received from "outstanding experts."
"The local congregants paid very little," she said. "Most of the money came from the 'Hour of Power' viewers."
Jim McDonald, a long-
"Congregants and church elders have asked again and again about what happened to the endowment funds and we got no answers," he said. "Now, we find out that a lot was taken out, but nothing was paid back."
McDonald says he understands that the court will take care of the creditors.
"But," he said, "who takes care of those people who donated money thinking that it was going toward an endowment?"
No court hearings have been set yet on the matter.
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