Late last week we reported how chief songwriter and co-founder of The Church, Steve Kilbey had announced he’d be quitting the band in a scathing post on his Facebook page saying that he was outraged by the mistreatment by his US label, Second Motion Records over the pittance of finances he and his bandmates received from their most recent royalty cheques.

Kilbey exploded on social media over receiving just $400 in fees for what he perceived to be a fraction of the money the band had earned based on evidence from spreadsheets and figures. “I have decided to leave my own band permanently as a protest to being fucking treated like this,” wrote Kilbey.

The 58-year-old musician also threatened to “illegally and eventually” place the entire Church back catalogue on his own bandcamp website and sell them direct to the fans, he later recanted his comments however, saying that his anger was not directed specifically at the Second Motion but a “scream of frustration” at the industry at large.

Kilbey also implicated that his band’s own mismanagement of their deals and finances was as much to blame, stating: “I just feel incredibly frustrated that I am the geezer at the centre of a little industry and I have absolutely no control… I love the other guys in the Church, I love playing with them but their business acumen I feel is as bad as mine and their various attempts to manage the band have been failures as far as I can see.”

The latest in the saga saw Second Motion Records responding to Kilbey’s original claims that he was underpaid and poorly treated, with the North Carolina-based label’s boss Stephen Judge writing a lengthy statement on their website in light of Kilbey’s accusations.

In it, Judge says that he sympathises with Kilbey’s frustration but also refutes several of his original claims, calling the fact that Kilbey’s bandmates only making $100 a piece false. “They have made MUCH more than that,” writes Judge. “They have been paid every single penny in royalties owed for the sales of their merchandise on the road, digital sales, licensing, and distribution of their catalog, solo records and anything we have sold, in any format over the last several years.”

Adding that since the band had been inactive on the US circuit for a year or so as the reason Kilbey and his cohorts – drummer Tim Powles and guitarists Marty Wilson-Piper and Peter Koppes – were paid infrequently.

Judge writes: “What Steve refers to when he says ‘$100’ is a small royalty that is due now for mechanicals, which is publishing money owed to songwriters, which is a small flat rate paid on each album sale and that also has been paid up to date 100 percent on every album sold.”

Additionally, Judge mentions how he started Second Motion Records, (after working as the GM of Redeye Distribution & Yep Roc Records) is “because I wanted to help The Church realize what could be the next step in their careers,” adding that he shared Kilbey’s frustrations with the industry and said he didn’t feel any ill will towards the 58-year-old frontman.

“Steve is right, this has nothing to do with Second Motion Records it is a much bigger issue,” Judge explains. “Steve’s ‘screaming out’ is simply the same screaming we all feel with the frustrations of this sometimes cruel business to not reward those who work so hard everyday and create music… Believe me no one understands the frustrations more than I do. I share those with Steve. In many ways, Steve’s venting and scream speaks for all of us.”

Soon after however, The Church linchpin had filled his lungs for another ‘scream’.

Writing on his own blog, The Time Being, Kilbey wrote a furious response to Judge’s “ludicrous” open letter, firing back at his supposed support as condescending and inaccurate.

Opening with “I do not recant,” Kilbey has now gone back on his original decision to pursue legal action, writing to Judge directly: “Stephen, I’m mad as hell and I ain’t going to take it… let me make it plain – I am leaving The Church because of you.”

Kilbey now says he’s prepared to return to his original decision to put the label’s royalty statements online “for the whole world to see,” complete with “annotations by an America Record Biz auditor.” Adding, “if you don’t sort this out, I have some very interesting new allies who are prepared to help me get to the bottom of this once and for all. I am so fucking sick of being ripped off and underpaid.”

Threatening to make statements allegedly showing that Judge pocketed “30 or 40 grand” public knowledge, “If you don’t decide to do the right thing and pass some of the money you collected on to the people who made this music!”

Kilbey admits that he “shouldn’t have backtracked” on his original comments and writes “I was trying to ameliorate a bad situation… I will not again, I will not back down.” While admitting that he remained “unhappy with the band’s internal business attitude,” Kilbey closes by stating “I am going to have satisfaction or my day in court.

Another lengthy (and curiously scripted) post appeared on Kilbey’s blog yesterday, going into more detail about his frustrations with music industry ‘showbizness’ as well as some of his and his band’s own financial mishaps.

The Church saga is far from over it would seem, but the ultimate result may yet look like the dissolution of one of Australia’s most iconic acts. Kilbey has already hinted that the band will complete their contractual obligations to the upcoming tour with Simple Minds and Devo, meaning that those September dates could potentially become a farewell tour.

The Church frontman has always had an awkward relationship with band’s popular status, and financial efforts, particularly when he admitted last year how their iconic tune ‘Under The Milky Way’ became an accidental hit, and then a cash cow.

“There is almost nothing, except for maybe a cigarette ad, I’d say no to Under the Milky Way being used for,” Kilbey said at the time. The song won best single of the year at the ARIAs in 1989 and is regularly featured somewhere near the top of almost every ‘Best Australian Songs’ lists.

Meanwhile, last year the band celebrated their 30th Anniversary as the toast of the Australian music industry after becoming 2010′s ARIA Hall Of Fame recipients, a very special birthday celebration at the Sydney Opera House in April entitled ‘A Psychedelic Symphony’ which was a hit with punters and critics alike; before heading out an anniversary tour.