During the first three months of l982, I met with several potential investors. Chuck Parsons, Sam Mamich, Bill Lauter, George Emershaw and his client, Roger Gerber, Mr. Dorian who indicated he had access to "Arab Money," and Forest Bedell and Bob Angona, Newman's clients from New York City.

While there were other calls, Bedell and Angona as well as Kontronakis and Christianson appeared to be the most interested and potentially the ones with the funds to reorganized the company. Forest Bedell was the owner and President of Penvest, a pension fund manager in New York that handled other people's money for retirement purposes. His associate Robert P. Angona was a promoter about my age (37 at that time) supposedly represented several entertainment companies that included K-Tel Records and Athena Posters in England. Angona said he knew Stewart Cohen who was formally with Studio One Posters and that since he was a marketing expert, he could help he regain the Pro Arts position that we had held prior to our Chapter 11 filing.

Angona was a pleasant looking man with shifty eyes. Later, after I no longer was associated with Pro Arts and I had time to reflect on Angona, I discovered that he was a pathological liar!

He even used his father's name instead of his own. Angona's real name was Phillip R. Angona. I think he used his father's name in case his credit or credibility was ever checked through reporting agencies.

Angona had a nightclub in West Nyack, New York called "On The Rocks." In l985, the nightclub was torched and Angona was accused of arson. When I had done a great deal of investigation on Angona, he had a "rap sheet" in West Nyack that included fraud. I can remember attending the Chicago Show in July of l982 with Angona and George Fisher in which Angona used his girlfriend's American Express card to charge hotel and food expenses at the Conrad Hilton Hotel. He also used this at the Black Hawk restaurant to charge our sales meeting dinner the same week.

Later, when the bills were sent to his girlfriend for payment requested by American Express, she denied the charges forcing the hotel and restaurant to come directly to Pro Arts for payment! To top it all off, Angona had put the expenses through the company using me to file the expense report and the $2,500.00 I received from Pro Arts was to be a loan to me personally by Angona and Bedell!

I was told that Angona later divorced his wife and married his girlfriend.

It was in the first six months of our Chapter 11 that I obtained an attorney in Stan Aronson's office to represent me personally in a lawsuit against Harmer Stamp Company in New York City.

Harmer had come to Ohio in late l979 to purchase my personal stamp collection as well as John, Mike and my partnership collection. Harmer had agreed to pay me $180,000.oo in cash for the collection and I would loan this money to Pro Arts for working capital.

After Harmer gave me a receipt noting the transaction at my bank in Chippewa Lake, Ohio, the two men put the collections into two large suitcases and went back to New York City. They insured the collection for $250,000.oo since the catalogue value at the time of the purchase exceeded $1,000,000.oo!

As I had written a book for Simon & Schuster called, STAMPS For The Serious Investor, I was aware of the true market value of the collections and the $250,000.oo insured value was close to the cash value of the collection at that period in time. The rare stamps, inverted stamps and unique issues made the collection a very valuable personal asset. Yet, because Old Phoenix has assured me of refinancing the Pro Arts' $250,000.oo Demand Note due in September of l979, I had started to amass large sums of money in order to meet Old Phoenix's requirement on the refinancing of the Pro Arts loans.

It required Mike, John and me to borrow from our Pension Fund the $65,000.oo each of us had on deposit with the pension company. With the $50,000.oo Pro Arts had owed me since we had incorporated in l969, my loans to the company were rapidly increasing to a point where I became the largest secured creditor after the banks! Since I had borrowed the money from banks and my profit sharing fund, I filed liens at the Medina Court House and the State capital in order to secure the loans.

Banks will never disclose the "IN's and Out's" of securing money to individual's businesses. This unwritten code is for the protection of the banks. While I had obtained loans and loaned money to Pro Arts, I never felt during the entire time of the loans that my loans to the company were not secured. Later, this would be "tested" in bankruptcy court.

By mid- l980, one and one half years before we filed Chapter 11, Pro Arts owed me in excess of $400,000.oo, Mike was owed $90,000.oo and John was owed $65,000.oo. Collectively, we had a larger loan to Pro Arts than Old Phoenix or CNB! At the Time of the Chapter 11 filing, Mike, John and I represented nearly 45% of the secured debt of Pro Arts Incorporated and in reality controlled the Secured Creditors Class unless we were later to give up this right during the negotiations for the reorganization.

This would eventually happen as we were to be led down a path by our "trusted associates" in preparation for our financial slaughter.

When Harmer returned to New York, they reneged on their promise to send me $180,000.oo on our collections that prompted me to threaten them with litigation and fraud. Since they had obtained the collection and returned to New York, there was no way of telling which stamps they had replaced and substituted after they were in their offices. Furthermore, John and I relied upon the $180,000.oo for financing Pro Arts during the period of time that followed. Harmer agreed to allow me to come to New York and through their bank, European American Bank, I obtained a loan of $130,000.oo against the collection which would be held by Harmer as collateral especially since they had guaranteed the loan to me as a co-signer. The collection was sealed and placed in Harmer's vault. I anticipated retrieving the collection when Pro Arts' Sales increased, but the damaged that Pro Arts had received during Mike's reign, as head of the Sales Department was even more than I had anticipated.

In l979, l980 and l981, interest rates skyrocketed! To explain to someone today (July 1993) that Pro Arts was paying 2 1/2% over Prime would seem like a reasonable rate of interest since July l993 prime rate is about 6%.

Imagine the Prime Rate hitting 21 and 1/2% (Money Market accounts were about 19%!) and Pro Arts' rate on its Receivable Financing was 24% at one time! And additionally, my loan from European American Bank was "tied" to the Prime Rate and the interest soared to a point that the value of the collection became less than the outstanding loan!

For three years following Mike's resignation, Pro Arts paid about $300,000 per year in interest expense! All the money Pro Arts had made after the Farrah Poster was being sucked out of the company by banks! Additionally, Pro Arts had invested in equipment to become more automated and the depreciation was an additional $300,000 per year! It was easy to see that during the height of the First Great Recession (as it was being called by Farmers and Small Businesses alike), Pro Arts had to earn $1,800,000.oo in profits for that three-year period to break "even" on paper! Additionally, the "Collectible Market which included stamps, coins, rare prints, diamonds and oriental rugs fell like a Lead balloon and during the next ten years would remain marginal at best!

European American Bank authorized the sale of the stamp collections at the bottom of the trend and ultimately I was assessed in excess of $100,000.oo for the shortfall the collections had brought at auction.

I began a lawsuit in Ohio federal court against Harmer for my damages since they had benefited in the sale of the collections and for not honoring the purchase price of the collection in l979 when the stamp market was at its height! Harmer crossed sued in Judge Manse's court and Stan Aronson and Mike Kaplan represented me during this lawsuit.

Aronson represented Pro Arts as the plaintiff in the K-Mart lawsuit and Aronson and Kaplan felt very strongly about my actions against Harmer.

As I had eventually got into "bed" with Bedell and Angona on the Pro Arts re-organization, I was to rely on Bedell's word (to my detriment) that at the time of my stamp trial in Manos's court, Bedell would loan me $1,000.oo personally to fly my expert witnesses into Cleveland for the trial.

Bedell never did this! In fact, the day before the trial, I could not reach Bedell and Aronson and Kaplan had to "settle" with Harmer to avoid going to trial without expert testimony. (I always felt that Aronson and Kaplan as well as Bedell sold me down the river, but I never until now ever disclosed this feeling.)

When the settlement had been reached and I received nothing, Aronson had told me that Manos had inquired as to "how much" I had received for settling the case out of court and when Aronson had indicated nothing, Manos expressed "surprise!" Yet, as Aronson and Kaplan related this to me "after the act of settlement," I question even the validity of this information.