Battles cost Ananda $4.3 million; dozens of members have left over legal turmoil

The Union/September 17, 1998
By James Nash

Ananda Village's ongoing legal battles have cost the San Juan Ridge religious community $4.3 million since 1990, the village's business manager said Wednesday, as Ananda leaders explained their Chapter 11 bankruptcy filing.

The community has faced two lawsuits from a disillusioned former member and was about to become entangled in a third lawsuit when it filed for bankruptcy reorganization Tuesday, village leaders said. In addition, Ananda and a rival church, the Self-Realization Fellowship, waged a costly legal battle between 1990 and 1997 over copyright claims.

The lawsuits have drained nearly a year's worth of income from Ananda, business manager Steve Weber said. Dozens of members have left amid the turmoil.

"The lawsuits have substantially eroded our resources," he said. "However, we feel that Ananda is a going concern, and that we will be able to meet all our obligations to our creditors."

Ananda was served with legal papers Monday, indicating it would be sued in an ongoing San Diego County case over the alleged theft of trash from a law office in Rancho Santa Fe, said Vidura Smallen, Ananda general manager.

Michael Flynn, a lawyer representing representing best-selling spiritual author Deepak Chopra in a sexual-harassment and extortion case, suspected the defendant in that case had orchestrated the theft of documents from his law office. Flynn sued over the incident. He also has represented a former Ananda member in the first of two lawsuits against Ananda, which a judge settled with a $330,000 ruling against the religious community.

A San Diego judge dismissed the Chopra lawsuit last November. But Flynn's law office later connected Ananda to the theft and named it as a defendant this week, Smallen said.

Flynn did not return phone calls Tuesday or Wednesday.

Smallen said Ananda's Chapter 11 bankruptcy filing will head off the latest threatened lawsuit and, at least temporarily, spare Ananda the expense of defending the latest lawsuit, which alleges defamation and malicious prosecution.

"We needed it to stop," Smallen said of the litigation. "We can only defend so many lawsuits from the same guy."

But Ford Greene, an attorney who has worked with Flynn on the Ananda cases, said that while the Chapter 11 may have granted Ananda a respite, he expects to be back in court, arguing that the case should continue. Bankruptcy only protects a defendant from a lawsuit in cases of negligence, and Ananda's behavior in the new case crosses the line from negligence to malice, he said.

Ananda leaders explained the Chapter 11 bankruptcy filing to members in a community meeting Wednesday night. Smallen said members, strengthened by their faith, are determined to persevere through the bankruptcy reorganization and resolution of the lawsuits.

Ananda has lost between 40 and 50 residents during the ongoing turmoil, Smallen said, but the 300 people who remain at the religious community are steadfast in their support.

"Except for the lawyer's fees in this series of cases, we're doing well," said resident Larry Kiser. "I'm less worried now that we're in Chapter 11 than if Ford Greene and his people had started coming in and taking things."