US church co-founder took substantial payment from HKIS to end ‘bad marriage’: source

The US church group that co-founded Hong Kong International School (HKIS) accepted an out-of-court payment to end a “bad marriage”, a source has told the South China Morning Post, saying their differences would have led to more litigation if the partnership had continued.

The source familiar with the settlement said the Lutheran Church-Missouri Synod (LCMS), which sued the school for allegedly breaching its operating agreement last September, decided to part ways with the institution after finding that they had “fundamental” differences.

He told the SCMP that the settlement might give the impression that the church had filed the lawsuit for pecuniary reasons but the LCMS regarded the payment as a necessary “penalty” the school needed to pay for a number of “breaches”.

“They paid a very, very substantial penalty because they were not aligned with the Lutheran mission,” the source said.

The church had accused the school of serving only the “rich and privileged few”, violating its mission and amassing a large amount of financial reserves. The school management countered that the LCMS’ legal action was financially motivated as the church had explored multiple options to develop part of the HKIS campus in Repulse Bay into a US$1 billion commercial project.

A High Court writ earlier indicated that the plaintiff threatened to evict the school from its Repulse Bay campus, while also seeking an indemnity of US$1.75 million. The LCMS remains the current registered owner of the campus.