Chakra Discussions

Final Chapter 11 Plan Approval

submitted by Gupta das

Posted May 25, 2005

Press Release: Courts Confirm Hare Krishna Chapter 11 Reorganization
Religious Society Apologizes to Victims of Child Abuse

For Immediate Release
Date: May 23, 2005
Anuttama Dasa, ISKCON Communications
Background and updates: iskcon.com/press/index.htm

Los Angeles, CA -- The United States Bankruptcy Court of the Central District of California today confirmed a Chapter 11 Reorganization Plan submitted by six Hare Krishna temples and affiliates. The Plan provides 9.5 million dollars in compensation to claimants--primarily former students who were subjected to various forms of abuse or mistreatment while in the society's religious schools--while also protecting Krishna temples and religious communities from potential closure. Today's California Plan confirmation follows closely on the heels of a parallel ISKCON Reorganization Plan which was approved last week by the U.S. Bankruptcy Court in Wheeling, West Virginia .

Those temples and affiliates of the International Society for Krishna Consciousness (ISKCON), a monotheistic Vedic, or Hindu tradition, originally filed for Chapter 11 protection in February, 2002. That was two years after a $400 million lawsuit was filed in Texas on behalf of 92 former students, who alleged emotional, physical, and sexual abuse during the 1970s and 1980s in Krishna boarding schools.

"As leaders, it was our responsibility to assure our children's safety," said Anuttama Dasa, ISKCON Governing Body Commissioner and Director of Communications. "We failed them, and for that we are very sorry. It is heartbreaking that many of our children were abused. On behalf of our entire society, I apologize to these young people. I pray that someday they will be able to forgive us. And, I pray that today's agreement will help them heal and move forward in their lives," Dasa said.

The parallel ISKCON Chapter 11 cases were adjudicated in two jurisdictions simultaneously. In the first of the two Plan confirmation hearings, on May 16, 2005, in the U. S. Bankruptcy Court for the Northern District of West Virginia, the Honorable L. Edward Friend II stated in court that he "wholeheartedly" endorsed the Plan: "I find it to be in the best interest of the creditors [former students] and I find the parties have actually worked together to come to a conclusion that really works and really makes sense."

By seeking Chapter 11 protection, ISKCON was able to open the settlement to hundreds of additional former students who were either unaware of, or chose not to participate in, the original lawsuit. By way of Court approved advertisements in international media, as well as a proactive email campaign, ISKCON identified an additional 450 claimants who will now receive a share of the court approved $9.5 million compensation plan. Above and beyond that amount, the compensation fund stands to increase by several million dollars if ISKCON is successful in ongoing litigation with its insurance carriers.

"There were always two priorities for us in this case," said David Liberman, attorney for the Krishnas . "We wanted to provide as much money as possible for the young people that were abused, and simultaneously to protect innocent families and Krishna followers from having their temples closed had a jury awarded the original amount sought in the Texas case," Liberman said.

"If this had gone to trial, it would have exhausted ISKCON's assets through legal costs and left nothing for the tort claimants, the young people who deserve it," said Sandford L. Frey, lead bankruptcy counsel for ISKCON. "In addition, the Chapter 11 allowed ISKCON to seek additional money from other independent contributors who voluntarily donated to the fund, making this an international settlement which increased the total dollar amount of the compensation fund far beyond the modest assets of the original temples that were sued," Frey said.

Distribution of the funds will begin later this year and must be completed by 2011. The amount each individual receives will be based upon the nature of the abuse, its severity, and the time factor. The amount of compensation received by most will range from $2,500 to $50,000, which does not include the amount of insurance funds that may yet be recovered.