A suit filed by “the local church” exhausted the cash resources of Spiritual Counterfeits Project.

As a result of a grueling legal battle that began in 1980, the financial well of a Berkeley, California, research organization has run dry. Spiritual Counterfeits Project (SCP), a group that analyzes religious cults and trends, last month petitioned for reorganization under Chapter 11 of the Federal Bankruptcy Code.

That action enables SCP to continue operating, and it automatically imposes a stay on the libel suit brought against SCP by Witness Lee and his organization, the local church. Lee, who came to the United States in 1962, was a close associate of the late Chinese Christian leader Watchman Nee. Lee eventually developed a following of his own, and today the local church claims 460 churches worldwide.

Lee filed the 1980 libel suit because of an SCP-authored, German-language book that is critical of some of the local church’s teachings, beliefs, and practices. According to the book, Lee teaches that his is the only true church. The book quotes Lee as saying that “Judaism is Satanic, Catholicism is demonic, and Protestantism is without Christ.”

Regarding Scripture, the book quotes Lee as saying that “the Bible is not principally for man to understand but for man to receive and enjoy.… If you use your mind to analyze and comprehend the Bible, it is unavoidable that you will understand it wrongly.…”

SCP petitioned for court-supervised reorganization on the day the libel trial was scheduled to begin. In accordance with Chapter 11 procedures, the Federal Bankruptcy Court will determine the extent of any damages incurred by the local church and oversee how the group is to be compensated.

Charles Morgan, Jr., chief attorney for the ...

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