Owners are thrilled when there are two eager bidders with deep pockets show up at an auction. The creditors of the Crystal Cathedral are getting goosebumps even now as the L.A. Times reports here that the Catholic Diocese of Orange has increased its previous bid by $1.8 million. It is unusual, however, for the current high bidder to up its own bid but that's what has happened here.
Even though the Diocese had offered more than Chapman University, the board of the Crystal Cathedral had opted to support Chapman's offer because Chapman had given the church an option to buy back the property. The Diocese's offer only gave--and gives--the church a few years to find another location.
I'm pleased to see that the Crystal Cathedral board is taking seriously its fiduciary duties to the creditors. According to the same news report, the board has withdrawn its support of the Chapman offer. I suspect the church's lack of success in raising money has convinced the board that it would never be able to exercise the repurchase option anyway.
The hearing to approve one bid or the other is still scheduled for November 14. Will Chapman make another move? I can only say that it's less than rare for a bankruptcy auction to produce enough to pay creditors 100% of their claims. In addition to its creditors, I'm confident the church's lawyers are pleased to know there will be enough left over to pay their fees.
Even though the Diocese had offered more than Chapman University, the board of the Crystal Cathedral had opted to support Chapman's offer because Chapman had given the church an option to buy back the property. The Diocese's offer only gave--and gives--the church a few years to find another location.
I'm pleased to see that the Crystal Cathedral board is taking seriously its fiduciary duties to the creditors. According to the same news report, the board has withdrawn its support of the Chapman offer. I suspect the church's lack of success in raising money has convinced the board that it would never be able to exercise the repurchase option anyway.
The hearing to approve one bid or the other is still scheduled for November 14. Will Chapman make another move? I can only say that it's less than rare for a bankruptcy auction to produce enough to pay creditors 100% of their claims. In addition to its creditors, I'm confident the church's lawyers are pleased to know there will be enough left over to pay their fees.
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