In an ironic twist, a prime foe of the Cult Awareness Network (CAN) has purchased the right to the CAN name, Post Office box, and phone number and aims to reestablish CAN with a new agenda.
As part of bankruptcy liquidation proceedings, attorney Steven Hayes, J.D., a member of the Church of Scientology, purchased the rights to CAN's name, address, and phone number for $20,000 in late November. Hayes told a Washington Post reporter that he and a group of people "united in their distaste for CAN" planned to reopen the organization so that it "disseminates the truth about all religions."
The former CAN was forced into Chapter 7 bankruptcy last June when Scientologist attorney Kendrick Moxon, J.D., contested CAN's plan to reorganize under Chapter 11. Moxon was representing Jason Scott, the plaintiff who won the $1.1 million judgment that bankrupted CAN.
Chapter 11 would have allowed CAN a voice in how it met obligations to creditors, but the court sided with Moxon. Under Chapter 7 responsibility for all assets was automatically transferred to the bankruptcy trustee. This deprived CAN of a voice in how its assets were handled.
In late December, an appeal was filed with the bankruptcy court contesting the legitimacy of the November sale of the rights to the CAN name. Most of CAN's major creditors joined the appeal by attorney David Bardin, J.D., which held that the sale was inadequately advertised and hence failed to bring the best attainable price.
CAN's former executive director, Cynthia Kisser, spoke with Psychiatric News about the Hayes purchase. Kisser is worried that CAN's confidential files containing the names, addresses, and phone numbers of people who complained about Scientology will be sold. But there is some precedent for protecting confidential records under bankruptcy.
"I do hope [the former] CAN is able to maintain the confidentiality of its records," said Kisser. Although the bankruptcy trustee has indicated he intends to sell the records, he has yet to accept a bid, said Kisser. An earlier bid from Scientology attorney Moxon was rejected as too low, she noted.
There are important confidentiality issues that should transcend the mission of the bankruptcy trustee to get the highest price for assets, Kisser explained. Courts have previously held that confidential records are not assets in the same way that furniture or computer equipment is, she noted.
CAN was bankrupted by a $1.1 million judgment last June (Psychiatric News, September 6, 1996). Although the Ninth Circuit Court of Appeals agreed in December to hear an appeal of the ruling that bankrupted CAN, it is unclear what would happen if the court ultimately upheld the appeal. Attorney Dan Leipold, J.D., a CAN creditor who has defended other clients against the Church of Scientology, said he believes the appeal will be upheld and may result in the former CAN being able to reconstitute itself in some form and reorganize under Chapter 11. Further, said Leipold, "If CAN ever survives, CAN is going to have the biggest lawsuit ever against Scientology."
Paul Lawrence, J.D., president of the Washington state chapter of the American Civil Liberties Union, who is handling the appeal for CAN, was more cautious. Even if CAN does not get the right to its name back, a victory on appeal "would be meaningful," said Lawrence. "As long as this judgment is out there, it makes [the former CAN] an easy target" for those opposed to its activities, he commented.
Although a victory on appeal would do nothing to restore the former CAN's assets, a countersuit by CAN against Scientology for malicious harassment is pending, he noted.
CAN focused on cults it deemed "destructive," defined as involving unethical and deceptive recruitment and indoctrination techniques and strong behavior modification techniques without the consent or knowledge of recruits. According to former executive director Kisser, the Church of Scientology was one of the three most frequently cited organizations in telephone calls and letters to CAN from worried friends and family of cult members.
(Psychiatric News, January 17, 1997)