Image: The Crystal Cathedral
Damian Dovarganes  /  AP file
The Crystal Cathedral filed for Chapter 11 bankruptcy protection Oct. 18, citing debts of more than $43 million.
msnbc.com staff and news service reports
updated 11/18/2010 5:09:09 AM ET 2010-11-18T10:09:09

A federal bankruptcy official has questioned the salaries of three employees of the bankrupt Crystal Cathedral megachurch.

The Orange County Register reported Wednesday that the U.S. trustee filed objections in bankruptcy court questioning the need for a $132,019 housing allowance for CFO Fred Southard.

"There is no justification whatsoever for a housing allowance of this amount," the U.S. trustee stated. "Mr. Southard has failed to explain why such a housing allowance is necessary or appropriate, given this Debtor is in Chapter 11 and suffering financial difficulties."

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Southard has been employed in the role since 1978, the paper said. He earns $12,000 a year, in addition to the housing allowance.

The trustee also questioned the need for a $70,000 salary for founding pastor Robert H. Schuller's daughter Gretchen Schuller Penner, who produces the church's "Hour of Power," and the $55,000 salary of her daughter Neyva Penner Klaassen, who works on the TV show.

Citing court documents, Schuller family members earn more than $1 million in salaries annually, the Register reported.

Story: Crystal Cathedral megachurch files for bankruptcy

In defense, Southard said the church ordained him as a minister and he has sometimes acted in that capacity. Cathedral attorney Marc Winthrop declined comment.

The church filed for Chapter 11 bankruptcy protection Oct. 18, citing debts of more than $43 million.

Major layoffs
Chapter 11 bankruptcy allows a business to keep operating while it tries to put its finances in order under court supervision.

The church, founded in the mid-1950s, has already ordered major layoffs, sold property and canceled its annual "Glory of Easter" extravaganza.

On Oct. 24, the church's founding pastor tearfully asked his parishioners for help in overcoming its tens of millions in debt.

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"I need more help from you," said Schuller, 84. "If you are a tither, become a double-tither. If you are not a tither, become a tither. This ministry has earned your trust. This ministry has earned your help."

The church has said its money troubles are almost entirely the result of the recession, but others have blamed an inability to keep up with the times and leadership and succession problems that included a disastrous attempt to hand the church over to Schuller's son.

Schuller's daughter, Sheila Schuller Coleman, ended up assuming senior pastor duties.

The Associated Press contributed to this report.

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