Letter: Total Debt — $4.4 Million

From Catherine Van Houten

Development Director, Ananda Church of Self-Realization


December 3, 1999

Dear Friend,

This letter brings you the wonderful, long-awaited news—Ananda has left behind the “legal phase” of our history! It was in July 1990 that Self-Realization Fellowship filed the first lawsuit against Ananda for trademark and copyright infringement. Now after nearly ten years of litigation—including the SRF lawsuit, its corollary, the Bertolucci lawsuit, and the Chapter 11 Protection process—this period of legal battles has, in essence, come to an end.

The Appeal by Self-Realization Fellowship

We said “in essence” because SRF has appealed some very limited issues in their original lawsuit to the 9th Circuit Appellate Court. They are contending Ananda’s ability to use nine specific photos of Paramhansa Yogananda which SRF claims ownership of because they are in possession of the original negatives. Judge Garcia’s refusal to recognize SRF’s ownership of these photos is part of the appeal. SRF also claims ownership of the few audio recordings of Yogananda’s voice which Ananda has made public through Crystal Clarity, Publishers.

These issues are pending before the Appellate Court, and we’ve already submitted written arguments in the case. Now we’re simply waiting to present oral argument which will be followed by the ruling of the appellate court panel of judges. There is no real activity or outlay of expense in this case, though it may be more than a year before we have a final ruling.

The Settlement with the Bertolucci Group

After the jury decisions in the lawsuit with Anne-Marie Bertolucci in March 1998, there was a quick succession of filings of other satellite, “harassment” lawsuits by Bertolucci attorneys. A second Bertolucci lawsuit, which was essentially a rehashing of the first, was set in motion in Nevada County near Ananda Village. There were also several suits related to procedural complaints by Bertolucci in the original suit. All of these filings were clearly designed to keep the financial and psychic pressure on Ananda as high as possible while Bertolucci sought to collect the money damages awarded her by the jury.

We found ourselves in the untenable position of having to allow Bertolucci to push in ahead of other “friendly” creditors to collect these damages, rendering Ananda unable to meet its other dharmic debt obligations. As we wrote you earlier this year, we concluded that our only option was to seek Chapter 11 protection. This gave us time to review our financial position and find ways to honor all our debt. Filing for Chapter 11 protection also put “on hold” all legal proceedings against Ananda with the result that the dollar “hemorrhage” caused by this myriad of satellite harassment lawsuits came to a stop.

In September 1998 we entered Chapter 11 Reorganization. As we reported to you in January, the Bertolucci group was extremely disruptive initially to the Chapter 11 process, challenging the validity of every other creditor’s claim.

The court periodically ordered the Bertolucci group and Ananda to attempt to reach settlement of grievances through arbitration. It became apparent in these closed meetings that what the Bertolucci group was ultimately after was ownership of the copyrights to all of Swami Kriyananda’s writings and musical compositions. In one meeting, Mike Flynn, lead attorney for the Bertolucci group, stated that he had a buyer who was ready to pay $1 million cash for ownership of the copyrights to Kriyananda’s works. They put this forward to the court to establish the value of an asset which they said did, in fact, have a “market value” to satisfy the damages the court had ordered Swami Kriyananda to pay to Anne-Marie Bertolucci. Of course, we had to assume that the real intent of this anonymous “buyer” was not to print Kriyananda’s works and thus realize their value, but rather to own the copyrights in order to suppress or “bury” Kriyananda’s life work.

We realized that it was entirely possible that the court could and would order the sale of the copyrights. We had also already learned from bitter experience that we might spend millions of dollars in our defense and never experience “justice” in the completion of any of these satellite lawsuits. Thus, reluctantly, we decided to settle with the Bertolucci Group. The amount of the settlement was a compromise amount of $1.8 million, which Ananda sees above all as having secured the clear title to Swami Kriyananda’s copyrights. Neither Swamiji nor Ananda is interested in “owning” these copyrights, but rather we want to ensure that his writing and music may never be suppressed or taken out of print.

What about Chapter 11 and Ananda’s financial well-being?

After the settlement with the Bertolucci group, the Chapter 11 process has unfolded fairly smoothly. With lots of hard work, and with a great deal of faith in Divine Mother, we moved forward to design a “pay-out plan” to satisfy all our creditors, trusting that Ananda will have the support it needs through donations and the growth of our work. In July 1999 this pay-out plan was approved by the court, with a great deal of praise for our integrity throughout the process. The first payments to our creditors, as delineated by our 6-year plan were made at the end of that month, and regular monthly payments have proceeded smoothly since then.

Now Ananda’s ability to move forward into a dynamic new era of serving others with the teachings of Self-realization depends, as it always has, on the willingness of core, committed friends and members to help.

Since we are no longer accumulating new debt through these terribly expensive legal battles, we can identify a fixed amount of debt which we must resolve to put this phase of our evolution behind us. Here, accurate, but simplified, is where Ananda stands now financially:

$4.6 million Total legal expense to date, excluding the Bertolucci settlement
Less $3.2 million Gifts received to the “Master for the World” legal fund (Paid off!)

$1.4 million legal debt still remaining from 10 years of lawsuits
Add $1.8 million Settlement with the Bertolucci group
$3.2 million

Add $1.2 million Misc. other small debt, plus interest over six years of pay-out plan
$4.4 million Total debt

Over the last ten years, we have found that out of that $3.2 million paid off (!) on legal debt, 65% of it was through donations by dedicated individual members. When we thought how to approach this $4.4 million debt, we realized that we would need to ask our individual Ananda Sangha members to help collectively, as each is able, with $2.9 million of the debt.

As I write to you today, we have held meetings here at Ananda Village and in all of our branch communities to see what our resident members could do. The response, as always, has been very strong and committed. Remarkably, as of the end of November 1999, nearly $2.3 million of this $2.9 million that we are hoping for from individuals has been either received or pledged. Only $600,000 more to go!

Can you help, too?

As we face this final financial hurdle which will clear all the legal debt of the last ten years, it’s important to remember all that has been gained. We need to remind ourselves that the original issues in the lawsuit with Self-Realization Fellowship had to do with our fundamental right to share publicly Paramhansa Yogananda’s teachings, to be his disciples, as we feel guided within. The original filing by SRF sought, in essence, to make Yogananda the property of an organization. SRF claimed as their legal right sole control of all his written words, his photos, the recordings of his voice, and perhaps most significantly, they sought to totally control the use of Yogananda’s “name, image and likeness.”

All of these issues were decided in favor of Ananda, freeing Yogananda’s teachings from the confines of a single organization. This is why we named our legal fund, “Master for the World.”

Now, with the lawsuits over and a shrinking amount of debt before us, we feel it’s time to create a new fund that reflects our next phase: “Ananda’s United Mission” (or “A.U.M.”) Fund. As this “leftover” debt is resolved, Ananda will become more and more free to move into a dynamic new era of spreading Master’s teachings to the world.

If you can help, please use the pledge card enclosed to tell us of your support. We’ll let you know how this pledging process is unfolding and report the successes of resolving the old, so we can enter this new millennium free of any psychic or financial shackles.

Thank you for all you have already done, dear friend. Through your prayers, your gifts, your letters of support, we have emerged from a truly challenging period, feeling a new strength, a new clarity, and a new enthusiasm for sharing Master with the world!

In divine love and friendship,

Catherine Van Houten
For Ananda Sangha

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