According to what I heard there was heated words between John K. and South Park creators Matt Stone and Trey Parker, I was able to find a Q&A (See Transcript Below) that Matt Stone and Trey Parker did in Aspen Colorado in March 1998, A copy of this Q&A is also available in the Real Video, http://www.comedycentral.com/aspen
As far as a lawsuit is concerned, I think that was all just a bit of speculation on the park of the fans.