In May of l982, the MCA movie that Adler had tried to license to Pro Arts in November of 1981 became the best all-time record breaker in the movie industry! That movie was E.T. and C.C. Sales became the poster company that obtained the rights to the movie!

Our remaining accounts (other than K-Mart) began to order the poster from Pro Arts, as we were a distributor of posters from C.C. Sales. Without cash, our orders were limited to the amount of money Pro Arts had on hand each time we purchased from C.C.

While Kontronakis, Bedell and Angona had met with intentions of jointly funding the Pro Arts reorganization, Kontronakis and Christianson were hesitant about doing business with Bedell and Angona. By July of 1982, six months after Pro Arts filed Chapter 11, John and I had concluded that only Kontronakis and Bedell were serious about the reorganization.

Kontronakis had expressed to me his concerns about Bedell and Angona and he felt that they were potential thieves. Since I could not anticipate what the future had in store for Pro Arts, I felt that Kontronakis might be getting "cold feet" since his associate Christianson had visited our facility and wanted to back out of the reorganization. Pro Arts had orders in the house for $150,000.oo worth of E.T. posters and Pro Arts did not have the cash to purchase the posters from C.C. Sales in order to fulfill the orders.

Bedell had agreed to do a short terms loan to Pro Arts for the purchase of the posters for reasonable interest and the use of the receivable as collateral on the loan's repayment. As Bedell appeared to be "our savior," Dietrich took the proposal to Old Phoenix National Bank, Central National Bank and Judge White for approval and was granted a secured First Priority in the Receivables that the E.T. posters represented.

With this commitment by Bedell, both John and I felt that Bedell was the honorable party and that Kontronakis was looking for an excuse to extricate himself and Christianson from the Reorganization.

From July l982 through the end of August of 1982, John and I had leaned totally towards Bedell and Angona. Their actions convinced us that the way to confirmation was through Bedell and Angona.

During this time, Bedell, Angona, John and I met with Gary Hallman, Vice President of Old Phoenix, Donald Bramley, Executive Vice President of Old Phoenix and John Schwemler, a partner of Brouse & McDowell, Old Phoenix's attorneys. While Dietrich continued to support John and me, we were in fact the Managers of Pro Arts and the controlling officers of the company. Yet, Dietrich's eagerness to put the Plan together was mistaken as enthusiasm instead of what it truly represented. Dietrich saw an opportunity of money to come into the company that would confirm the plan and ultimately lead to payment of his legal fees!

Throughout the entire reorganization, Old Phoenix, Hallman, Bramley, and Schwemler stated that the bank as First Priority Lien Holder would not accept any Chapter 11 Plan unless both the equipment loan and the Real Estate Loan to JMT Enterprises were current at the time of the confirmation of the plan.

JMT Enterprises, John Mike and Ted, was a General Partnership that owned the Pro Arts buildings. While Pro Arts was not current on the Equipment Loan to Old Phoenix, JMT continued to pay the mortgage payments for five months after the filing of the Chapter 11. In July of 1982, JMT was only 3 months behind on its mortgage payments to OPNB. Yet Judge White was upset that the Federal Withholding Taxes had accumulated during the first seven months after the filing! Both John and I as Pro Arts' officers were personally liable to the IRS for any shortfalls that might exist if the company was converted to Chapter 7 liquidation. So we were under constant threat of a non-extinguishable personal liability if Pro Arts was ever liquidated.

Keeping the objectives of the company as our first priority, John and I represented over 60% of the Shareholders of Pro Arts and with specific understandings, we agreed to allow Bedell and Angona to come into the company as its Board of Directors and Chief Executive Officers providing they agreed to fund the Reorganization with $400,000.oo.

Dietrich prepared an order that had to be signed by all secured parties and confirmed by Judge White in order for the funds to start coming into Pro Arts from Bedell and Angona. On September 8, l982, Bedell and Angona gained control of Pro Arts by order of Judge White in that White had set up a specially court ordered "lock box" at Old Phoenix National Bank.

This "lock box" was to receive all accounts receivable prior to Bedell and Angona putting money into Pro Arts and with the exception of Central National Bank having a priority on the account and a few other secured creditors, the lock box would hold money that was to be disbursed to the IRS for Federal Withholding and Social Security Taxes. Additionally, the money would be held subject to Judge White's order for distribution after the Central National Bank loan was paid.

Both John and I understood that these "pre-Bedell receivables" were to be used to erase the IRS's potential claims against us personally, so we viewed this as a favorable situation.

One of the last acts that I can remember as Pro Arts' president the day before Bedell and Angona took control of Pro Arts was my sworn agreement not to allow Pro Arts to fail in paying the IRS all withholding and Social Security money after September 8, l982. White ordered me to stand in the courtroom and very vehemently expressed the following statement:

"Mr. Trikilis, you will not fail to pay the IRS taxes again or I shall adjudicate this case immediately!"

I took this threat to mean that he would convert the company to Chapter 7 if I failed to pay the taxes again. This being my last day, I swore that I would abide by his order and sat down as the lock box order was made a part of the Court's Record.

Prior to the September Hearing, we had a meeting at Old Phoenix National Bank on August 23rd in which Schwemler, Dietrich, Bedell, Angona, John Argiry, Roger Stevenson (Dietrich's associate attorney), Donald Bramley (OPNB), Gary Hallman (OPNB) and I attended.

As this meeting was to lay the foundation under which Bedell and Angona were to originally become involved in the company and its reorganization plan, it was agreed by everyone present at the meeting that Old Phoenix would receive $170,000 of the existing $320,000 accounts receivable due Pro Arts. $70,000 was to be for interest due the bank on the equipment loan and $100,000 was to be applied to the loan principle of $500,000 reducing the balance to $400,000 payable at $6,500 per month amortized at 12% interest until fully repaid.

Since our present real estate loan was only about $18,000 in arrears, Pro Arts would pay the $18,000 back rent due JMT to the bank and the mortgage would be current.

Mike, John and I had agreed to sell the buildings to Bedell and Angona for $400,000 above the existing mortgage balance with Pro Arts responsible for the real estate taxes.

Since Kontronakis and Christianson were still in the picture on August the 23rd, the stock in Pro Arts would be redistributed as follows: Mike would retain 16%; John would retain 8%; I would retain 16%; Bedell and Angona would each retain 20% and Kontronakis and Christianson would each retain 10%. This would give each group less than 50% of the corporate stock and allow for shareholders to vote in decisive matters from this time forward.

The bank requested personal statements from Bedell and Angona so that they could check out these individuals. As to the first step towards a plan, it appeared that Mike, John and I would still retain 40% of the company and the company would be saved from liquidation.

About a week later, Angona came into Ohio for a September 1st meeting in bankruptcy court. CNB was not happy with the idea that OPNB would have an interest over their Account Receivable Loan. When we first filed Chapter 11 in December 1981, CNB was owed only $237,000. Throughout the past eight months, CNB was paid over $120,000 on their loan while other creditors including OPNB received nothing! Now CNB was again attempting to drag down the balance of their loan. It was so obvious that CNB was unreasonable that Judge White remarked that CNB was the only party of interest that had seen anything during the past eight months and they are the biggest complainers in the case! This caused Angona to laugh and again White not seeing the humor in his own statement chastised Angona for laughing loudly in his courtroom!

In order to satisfy CNB, after the court hearing we met and agreed to restructure the $320,000 account receivables of Pro Arts. CNB would receive 74% of their remaining loan from the $320,000 and the balance of $20,000 when the E.T. Receivables were obtained by Pro Arts.

This would clear up all of CNB's position of interest in Pro Arts and only OPNB would be secured as a bank in the Chapter 11.

The balance of the $320,000 was to be held in OPNB with a small payment to Commercial Credit Corporation and the IRS was to receive money for the "open" withholding and Social Security money due them.

After CNB agreed to this new distribution, everyone except CNB went to Dietrich's Office to discuss the event.

In the meeting at Dietrich's office, Bedell and Angona became very evasive on the deal points regarding JMT, the stock distribution and payments Mike wanted in order to finalize the plan. They were so evasive that I almost got up and left the meeting. From the first time we seriously decided to become involved with Bedell and Angona, they were constantly non-committal in a definite plan. Bedell even stated that he would leave it up "to the court' to decide what was to be done. I did not like this flippant attitude especially where Mike's, John's and my future were concerned.

Since Kontronakis did not appear in court with us, I called him in Salt Lake City to tell him what had transpired in court and in Dietrich's office. Now Kontronakis was interested in doing the entire deal without Bedell and Angona!

Since I did not know what to expect, I sent Kontronakis the deal anticipating that his decision could go either way. John and I needed the $400,000 commitment, but even with the meeting after the court hearing I still was not sure we even had a deal with Bedell and Angona!

As it finally turned out, both Kontronakis and Christianson passed on the deal and this left John and me with only the Bedell and Angona alternative!

Whether we liked it or not, Bedell and Angona became the only "game in town."

As I earlier indicated that the September 8th Court Hearing gave Bedell and Angona control, it clearly was the hearing that established the Lock Box account at OPNB with the understanding that the IRS money would be paid from this account! Throughout the reorganization, letters and statements made by both Bedell and Angona, their managers and OPNB and OPNB Attorneys clearly stated that the IRS was to be paid from this Court Ordered Lock Box Account!

It was not until several years later that I discovered that Old Phoenix National Bank, Gary Hallman and Donald Bramley secretly transferred $112,000.oo remaining in the Lock Box Account without the Court's knowledge or permission to the Equipment Loan of Pro Arts! Additionally, Dietrich in order to "cover the tracks" of this illegal transfer filed a Motion in bankruptcy court six weeks after the transfer by OPNB to "close the Lock Box Account."

White, not knowing that the Lock Box Account was already emptied by Hallman and Bramley, ordered the Lock Box Account closed. Talk about closing the barn door after the horse had escaped!

This action by OPNB, HALLMAN, BRAMLEY, ROETZEL & ANDRESS and DIETRICH CLEARLY CREATED THE MAJOR PORTION OF THE IRS's LIABILITY AGAINST JOHN ARGIRY AND ME! When this was later discovered, no one was ever brought forward to account for this illegal act! In fact, at the Confirmation Hearing, it was clearly stated in court that OPNB was only to receive $160,000 at time of Confirmation. As it was later discovered by me, OPNB had received over $287,000 from Bedell and Angona as well as the "other parties" that later became part of this conspiracy.

OPNB, HALLMAN and BRAMLEY were thinking more of their future with the "holding company" that bought the bank than of the illegal act that they had committed. If the Lock Box Money had been paid to the IRS instead of the Pro Arts' equipment loan, OPNB would have an additional $112,000 shortfall on their loan to Pro Arts that was guaranteed personally by John, Mike and me as well as our wives. This additional $112,000 loss would be extinguished by all of us with a simple Chapter 7 or Chapter 13.

Once Bedell and Angona took control of Pro Arts on September 8th, l982, they sent Barry Stewart into the office to represent their interests within the company. Barry Stewart was an accountant (so he had indicated) that was now the Controller of Pro Arts. While Bedell had become the Chairman of the Board of Directors and Angona was the new President of Pro Arts, I had become a Vice President acting as a Sales Consultant to the Company.