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New Jersey commercial bankruptcy includes repayments to creditors

A large church with a successful television show that may be familiar to many in New Jersey is embroiled in a lawsuit that has slowed the progress of the church's bankruptcy. The Crystal Cathedral, which once was the filming location for the 'Hour of Power' television series, filed for a commercial bankruptcy in 2010. Since that time, the church has been the subject of claims by its founder, Robert Schuller, and his family members.

Family members were reportedly paid an estimated $1.9 million in annual payments that, until the commercial bankruptcy filing, had been made to some 20 people. These payments included more than $337,000 paid to the daughter of Schuller and her husband each year. The founder claims that he has intellectual property rights to books, videos and other materials that he produced while working as the senior pastor for the church.

The church's creditors have been left waiting for repayment of the debts that they were owed before the bankruptcy filing. In fact, a recent report notes that the creditors are owed millions of dollars, repayment of which has been delayed as a result of claims made by the Schuller family. However, like all creditors involved in a commercial bankruptcy, their repayment is subject to the decisions made by courts and the Trustee of the case.

The creditors in this matter must wait for the court to reach a decision before expecting repayment of their debts. In all commercial bankruptcy matters in New Jersey and elsewhere, creditors are often repaid at least a portion of what they are owed through sales of assets. However, there are many exemptions in bankruptcy and it may benefit an individual to work to understand the applicable rules before seeking such bankruptcy protections.

Source: Boston.com, "Crystal Cathedral founder seeks $5M from church," Nov. 2, 2012

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