Cult
Awareness Network Press Release
June 20, 1996
"Cult
Awareness Network files Chapter Seven Bankruptcy"
The Cult Awareness
Network, an internationally recognized non-profit which has provided
information to the public on the cult problem, filed a motion earlier
this week to begin Chapter Seven Bankruptcy proceedings.
The motion, which
was approved by Judge Barliett of the United States Bankruptcy Court for
the Northern District of Illinois, begins a process, under the court’s
protection, of divesting CAN of its assets.
CAN had originally
entered a Chapter 11 Bankruptcy last October, hoping to develop a
reorganization plan that would permit it to continue to operate in the
face of a crippling damage award assessed against it in civil litigation
brought in a federal case in the state of Washington by plaintiff Jason
Scott.
CAN filed its
reorganization plan, but in the face of vigorous opposition to the plan
raised by Scott’s attorney, the plan was not approved by the
Bankruptcy Court, clearing the way for Scott to begin collection
proceedings unless CAN entered the Chapter Seven.
The Scott case is
on appeal in the 9th Circuit Court of Appeals. CAN’s
attorney, Paul Lawrence of the Seattle firm of Preston, Gates and Ellis,
expects the appellate brief for CAN to be filed by late August. Lawrence
is the President of the Washington State American Civil Liberties Union.
Ironically, CAN
has also filed a petition to the Illinois Supreme Court asking the high
court to review a case dismissed by the Circuit Court of Cook County
which names Scott’s attorney, Kendrick Moxon, his partner Timothy
Bowles, and the Church of Scientology International as defendants for
bringing multiple cases in an attempt to destroy CAN financially with
litigation. The Chicago firm of Mayer, Brown & Platt are
representing CAN pro bono in that matter.
The Chapter Seven
bankruptcy halts two other cases against CAN, one in Superior Court for
the County of Los Angeles brought by Scientologist Robert Lippman, and
the other brought by Landmark Education Corporation in the Circuit Court
of Illinois. Landmark, a for-profit organization, sued CAN, it’s
president, William Rehling, and Cynthia Kisser its executive director.
The Landmark case continues against Rehling and Kisser.
Court-ordered
arbitration in the Lippman case has determined Lippman’s claim is
meritless. In the Landmark case, Landmark has refused to file a proof of
cost establishing it has actually suffered any damages because of CAN,
Rehling or Kisser’s actions, publications or statements concerning the
controversial organization’s reputation and activities.
As part of the
Chapter Seven proceedings CAN will recommend to the Chapter 7 Trustee
that it offer for sale the right to collect judgments for tens of
thousands of dollars in costs awarded to CAN against several
Scientologists in past cases terminated in CAN’s favor in California
and Illinois. Persons interested in details about such a sale should
contact the Chapter 7 Trustee, whose name is available through CAN’s
bankruptcy attorney Benjamin Hyink of Hyink & Scannichio, Chtd. In
Chicago at XXX-XXXX.
Of particular
concern to CAN is what will happen to its archives of information on the
cult issue and its confidential records of callers and donors. Without
the resources to mount constitutional and public interest issues and
safeguard these documents, CAN is concerned its critics will try to
acquire and destroy the archives and subject the donors to harassment or
intimidation. At this point public interest organizations will need to
contact the Chapter 7 Trustee to have these issues addressed because CAN
has no resources to present these issues.
CAN is hopeful
that it will not be forced to close down before its appeal on the Scott
case could be heard, but is realistic that the appeal may not be ruled
upon in time to prevent its demise.
"We’ve been
backed into this corner," said Kisser, "simply because of the
massive amount of litigation we have had to face in the approximately 50
cases brought by Scientologists against us in 1991. If you get sued 50
times over four years the odds are that you’re going to suffer losses
at some point. What has happened to us is wrong. The record is clear on
this for anyone who takes the time to review what’s been laid down in
the courts."
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