By Jason Kandel and Alex Dobuzinskis
LOS ANGELES (Reuters) - The bankruptcy sale of Crystal Cathedral, the glass-walled Orange County church known for its "Hour of Power" broadcasts, has touched off a bidding war between a Roman Catholic diocese and a local university.
The church's ministry, meanwhile, has announced that its campus is not for sale and launched a pledge drive to keep the cathedral, But that is a show of opposition that could put it on a legal collision course with creditors.
The fate of the towering, 31-year-old church, famed for its 10,000 panes of glass, is playing out in bankruptcy court, following the ministry's filing for Chapter 11 protection in October after falling $50 million in debt.
It marks a dramatic downturn for a congregation that got its start in 1955 when the Reverend Robert Schuller and his wife, Arvella, began holding services in an Orange County drive-in theater that they rented.
Schuller went on to become an internationally known televangelist through his "Hour of Power" broadcasts before retiring as senior pastor in 2006.
The creditors' committee on Tuesday filed court papers outlining its plans for resolving the case and detailing the offers received to buy the cathedral, which is located in the city of Garden Grove, about 30 miles southeast of Los Angeles.
The Roman Catholic Diocese of Orange has submitted a bid of $53.6 million, the court papers show.
The diocese has offered to temporarily rent space to the church's ministry, but it envisions eventually using the cathedral as a new home for its congregation and would require the ministry to move in three years, court papers say.
CHEAPER THAN BUILDING
Bishop Tod Brown and other officials with the diocese had been planning to build a cathedral from the ground up, said diocese spokesman Stephen Bohannon.
But at half that cost, the diocese could buy the Crystal Cathedral and convert it into a new home for its 1.2 million congregants, Bohannon said.
"That's part one of Bishop Brown's initiative," Bohannon said. "Part two is he feels very strongly that the Crystal Cathedral should remain a place of worship."
Chapman University, a rival bidder that is affiliated with the Disciples of Christ Protestant denomination, is offering $50 million for Crystal Cathedral, the minimum amount the creditors' committee will accept, court papers say.
But the university's offer also would allow the church ministry to repurchase the cathedral and other buildings for $27.5 million, if it can regain its financial footing, court documents show. The school is also offering to lease space to the ministry to continue its activities.
A representative for the university could not be reached for comment.
Other bidders, including a nationwide arts and crafts retailer called Hobby Lobby controlled by an evangelical executive, David Green, also have put in bids in the $50 million range, according to court papers.
But meanwhile, the church's ministry has come out in opposition to any sale. At a service less than two weeks ago, church leaders announced that they would try to raise $50 million to erase their debts and keep the cathedral.
"I believe with every fiber of my being that God turned the eyes of the world on Crystal Cathedral because God wants to make a big bold statement," Sheila Coleman, director of ministry at the church and the daughter of Schuller, said during the service.
"He wants the world to know that he is a God who still does miracles," she said.
In court papers, the creditors committee has since warned that it will go forward with a sale even if the ministry opposes it, and that a final deal may not include the lease-back or repurchase provisions now on the table.
(Editing by Dan Whitcomb and Peter Bohan)