HKIS settles out of court and breaks ties with US-based church co-founder

A significant legal conflict between Hong Kong International School (HKIS) and its US-based co-founder, a Lutheran church, has been settled out of court, with both parties agreeing to cease their dispute. HKIS Chairman Harold Kim disclosed the resolution in a letter to parents, assuring that the settlement would not lead to tuition hikes.

Under the settlement terms, the Lutheran Church-Missouri Synod (LCMS) will abandon its legal actions against HKIS and mutually terminate their Operating Agreement, thereby concluding the church's governance role over the school. Kim emphasized that the school remains in a strong financial position and that the settlement will not impact future investments or philanthropic donations.

The church, in a separate statement, clarified that the settlement funds would be used for religious, charitable, and educational purposes, with no portion directed towards profit. The disagreement originated when the church accused HKIS of serving mainly the wealthy and accumulating excessive financial reserves. They demanded HK$1.75 million (US$1.75 million) in indemnity from the school.

In response, HKIS alleged that the church aimed to develop part of the campus in Repulse Bay for a commercial project worth US$1 billion. The school's primary and secondary sections follow the American curriculum, with tuition fees for the 2026-27 academic year set at HK$231,600 (US$29,500) for primary and HK$244,500 to HK$272,600 for secondary school.

The dispute emerged after the LCMS filed a lawsuit against HKIS for allegedly breaking its 2013 operating agreement and demanding that the school stop serving "rich and privileged few." The church claimed the non-profit institution was being managed like a commercial business because of its HK$2.8 billion in financial reserves, while continuously raising tuition fees, accepting cryptocurrency donations, and selling HK$3 million in priority debentures.

HKIS Chairman Harold Kim refuted all allegations, stating that the school's mission remains to provide a top-tier education to global executives. The LCMS threatened to evict HKIS from its Repulse Bay campus, which the church owns, and establish an alternative school if HKIS failed to resolve the alleged breaches by the 2027-28 academic year.

However, HKIS countered that the church's hostility in 2022 was financially motivated, citing LCMS's previous property valuations and past real estate sales to cover global budget deficits. The Education Bureau temporarily halted the church's new school application pending the litigation.