From the first two weeks that Bedell and Angona obtained control of Pro Arts (September 8, l982) through the nine months that it took for the conspirators to confirm Pro Arts' fraudulent Chapter 11 Plan (June 10, l983), the conspirators met several times to discuss exactly how they would cheat me out of the deals that Bedell and Angona agreed to give my family and me.

While I am sure that they discussed the Reorganization Plan several times over the telephone and met several times in meetings not disclosed to John and me, I have Dietrich's notes of three meetings that took place in which the prime purpose of these meetings were to diminish my deal points while enhancing the bank's position, Bedell's and Angona's position and to keep as much of my family's net worth and my net worth in Pro Arts without having to pay anything for it.

From September 8, l982 through the end of December, l982, Bedell had stated that he was pouring money into Pro Arts and his loans to the company were more than he had anticipated at the time of his original commitment.

Yet Pro Arts was always cash poor and payrolls were nearly being met. In fact, there were times that I had to hold my payroll check for funds to be available to cash it.

Since John was traveling in the mid-west states for sales, I was the only person at the factory most of the time other than our regular employees and Stewart.

When Bedell had come to Medina to meet with the bank on November 30, he was later to meet with me to discuss the deals and reorganization plan.

I had called Dietrich before my meeting with Bedell to find out what had transpired at the bank's meeting.

Dietrich told me that Old Phoenix felt Ted Trikilis was the "only problem" that might stop the reorganization. That was the reason that they did not want John or me at the meeting.

Dietrich stated to me that Bedell was still going forward with the plan however Dietrich did not say that Bedell had given the bank permission to "hold on to the Lock Box money" rather than pay-off the IRS obligation that both John and I were personally liable.

I discovered this after the Chapter 7 liquidation in the November 30, l982 letter of Schwemler to Dietrich.

Looking back on this maneuver, I feel that it was a manner of keeping both John and me in fear of the personal debt were would incur from the IRS if we ever decided to oppose the plan. As long as we were obligated to the IRS on a debt we could not erase through a personal bankruptcy, these conspirators could keep "us in line" and do that which they intended to do without recourse.

Dietrich also mentioned that Bedell had agreed to pay Old Phoenix the interest on the Pro Arts debt for September, October and November. This of course made the bank happy and in one way cemented the bond between Bedell and the bank!

I learned later that most banks do not "post the interest expense" on their outstanding loans until the interest has actually been paid!

By doing this, the banks hold the principal amount owed by the debtor on their books and declares their profit (interest on the principal) when and IF THEY RECEIVE IT.

In this manner, any losses reported are principal losses and any profits reported are realized only after the interest is collected NOT ACCRUED!

During the month of December, Pro Arts' sales fell drastically. The cash flow seemed to have evaporated. I knew this situation to be normal in our industry since most retail chains buy heavily in September, October and November. Then, in December through the middle of January, the stores sell everything they can in order to pay for the merchandise they purchased for the Christmas season.

George Fisher, my former regional sales manager, was trained by me in the poster industry. George was a strong salesman. He was persistent and would work long hours to achieve the company's goals. Stewart had made him the National Sales Manager and they became close associates. Though George and I had conversations regarding things in general, George never disclosed any company plans or secrets. I did not want him to as long as he was reporting to Stewart, Bedell and Angona. I relied upon George's honesty to do everything that he felt was necessary to help Pro Arts. Knowing George to be a very honest and reliable person, he did exactly that.

Today, George and I are still friends and business associates even though he is employed by one of the largest poster companies in the United States. I value his opinion and relationship because I can still trust him after the Pro Arts failure because he did not do anything to create that failure.

George was required to go to New York with Stewart on certain occasions. He would meet with Bedell and Angona as well as to call on a few Pro Arts chain store accounts.

I discovered that the Hilton Hotel bills and the Blackhawk restaurant bill was deducted from money Pro Arts had received on its accounts receivables. This $2,500 was a loan to me personally, which they also later deducted again when accounting transpired on their four-month loans to Pro Arts! Angona had still not honored the American Express charges on his girlfriend's credit card to top it all off!

A bankruptcy meeting was held on December 14, which John and I both attended. Though Roger Stevenson, Dietrich's associate attorney with Roetzel & Andress stated to me that it was not necessary for me to attend, my paranoid attitude urged me to attend. Since the conspirators were meeting without John and me, I felt representations in court would clearly define what was transpiring. This again was another misconception on my part. Judge White had a difficult time keeping track of the players let alone keeping track of the representations by those players.

Prior to the December 14 hearing, Stewart had presented both John and me with a letter prepared by Stewart but signed by Bedell. This letter stripped both John and me of any and all management responsibilities and duties! No one reported to me anymore AND I REPORTED ONLY TO STEWART. This was another method of the conspirators to isolate me from any direct contact with anyone having knowledge of what was actually happening in the company.

While I accepted this situation (after all Stewart was now the President and I worked for Stewart), a few employees still loyal to John and me occasionally "left" documents in my desk that I would read and discover the subversive nature of Bedell, Angona and Stewart.

I never learned who was responsible for these "notes," but if they are reading this book, I want to thank you for doing that which you did!

Angona was such a flake that he used to come to Pro Arts to obtain money and would leave his personal check for the company to deposit. In December, he left a $15,000 bogus check while requiring one of our office managers to go to Old Phoenix to certify a $2,500 check to him! Though Bedell learned of this and pretended to be upset, I believe Bedell was part of this scheme!

It was during the month of December that Stewart approached me on the Billie the Blue Bell Bear and the Greg Happ situation. Though I later learned that Greg Happ had filed a false personal claim against the Pro Arts Estate in bankruptcy court, I explained to Stewart the double dealing method Greg Happ used to get Pro Arts to invest in the Billie project.

After Stewart acknowledged my desire to sue both Ann Happ and her son, Greg, Stewart began negotiating with Ann Happ on the project. Instead of directly confronting them with Greg's obvious conflict of interest in the contract negotiations, Stewart was working a deal with Ann Happ.

Greg Happ being the Medina County Prosecutor was responsible for collecting the taxes Pro Arts owed to Medina County. Happ had assigned an Assistant Prosecutor named Kimbler to represent his office in the tax matter while giving Robert Rosenfeld, a Medina attorney, his personal claim for representation.

I knew that we only owed Happ about $1,000 as Happ had invoiced Pro Arts two or three times after leaving the company as its Copyright Attorney. I discovered later that Happ had filed a false claim of $21,069.95 in bankruptcy court as his "personal claim." This plus a contingency on the Pro Arts vs. Hustler Magazine was the extent of Happ's personal claim. I later obtained the invoices to Pro Arts from Happ's final demand for payment on his September, l979 invoices. I found the exact amount owed to Happ. It was $1,069.95! The claim Happ had filed was exactly $20,000 more than what was really owed to him by Pro Arts!

Mike was constantly threatening John and I during this period. His demands for more than what we were capable of obtaining created tremendous stress on both John and me.

It had not yet sunken into Mike's realm of "reality" that we had all lost everything that we had owned either collectively or separately. While we could pursue a liquidation of the company and perhaps pay Old Phoenix and our other personal obligations, we would have to start all over again in order to save our personal homes and possessions. Pro Arts was functioning and producing posters and we had an opportunity to at least walk away with a fraction of what we once had rather than nothing.

This thought again was false. Neither John nor I had any real conception of what was transpiring behind the scene. While the bank represented a warm friendly attitude to John and me, the bank was conspiring to take as much as it could without any feelings of remorse.

The bank had started a foreclosure proceeding on the JMT building in which Pro Arts was doing its business. This threat was stopped because John, Mike and I would probably file personal Chapter 13 bankruptcies if they continued to push the foreclosure issue. But their action was just another method of intimidating us. And everyone was using everything they could to keep John, Mike and me in line.

Stewart's desire to achieve something that would "turn Pro Arts around financially," was starting to wear Stewart thin. The longer he was with the company, the less energy he exuded. He began coming into the office later and later. Bedell was not sending money when it was needed. Stewart was working with Dietrich more often than necessary. It seemed that Dietrich and he were constantly in communication.

As we got closer to the December 14 Court Hearing date, James Rollins, Treffinger and Macon's Atlanta attorney was refuting the tentative Disclosure Statement Pro Arts had filed in bankruptcy court.

On December 8, Dietrich called the office and spoke to Stewart and me at the same time. Dietrich told us that Rollins was coming to the December 14 Hearing to officially refute the Disclosure Statement. Dietrich wanted me to take the stand and testify as to the Disclosure Statement when the fact that I had very little to do with the statement prevented me from doing this. I thought that both Stewart and Dietrich wanted me to testify under oath as to their fabrication of the Disclosure Statement so they could have another ax to hold over my head. Later I told John about this and suggested that he also refuse to testify since he was out-of-town most of the time anyway. John agreed.

On December 13 John, Stewart, Stevenson and I met in Dietrich's office to go over the Disclosure Statement before the December 14 hearing the following day.

I asked Stewart how much Bedell had "loaned" Pro Arts since September 8 and Stewart "hemmed and hawed" as to the figure. It is funny that Stewart as an accountant, controller and now President of Pro Arts had no knowledge of the money Bedell was supposed to have loaned the company. Rollins also objected to the amount loaned to Pro Arts when he filed his objection to the Disclosure Statement prior to the hearing.

I was told that neither Bedell nor Angona would be present at the December 14 hearing. Stewart told me that Bedell had to raise a great deal of money in order to meet the obligations for December.

Central National needed $20,000 to "clean up" the balance of their loan; Bedell had promised OPNB $37,000 in interest at their November 30th meeting; John and I were to receive $1,800 each for salary held back by Bedell; $6,000 was needed for Printing Paper since our paper company refused credit to Pro Arts (after all, they were out over $100,000 in the pre-petitioned bill!); Pro Arts payroll was $25,000 and Bedell had missed 2 payments to the IRS for the withholding and social security payments! All in all, Bedell had to pump over $100,000 into Pro Arts before the end of December. Additionally, Judge White's threat to adjudicate Pro Arts for failure to pay the IRS now rested on Bedell's, Stewart's and Angona's shoulders since they now represented all the directors and officers of Pro Arts.

I can say accurately that the longer the company stayed in Chapter 11, the greater the IRS obligation became against Stewart, Angona and Bedell. They had difficulty obtaining the money to run Pro Arts let alone pay the IRS. Yet, White never brought this matter up again! Judge White had to read the Debtor-In- Possession (DIP) reports that Stewart and Dietrich filed each month as required by bankruptcy law. Yet, White never remarked about the several IRS entries that illustrated the lack of payment of the withholding taxes and social security payments!

Another misconception that was stated in the DIP reports was Pro Arts' sales and cash flow. Stewart added the returned posters in with the cash payments received by Pro Arts for invoices actually paid. The returns were so large that Stewart often did not record the returns for several months after Pro Arts received the posters.

Anyone not familiar with the poster industry would think that Pro Arts' cash flow was fantastic! Further confusion was deliberately added to the DIP reports when Pro Arts added new Consignment Sales to the account receivable listing. Again, no one would suspect that $100,000 in consignments at wholesale was actual about $15,000 at inventory cost to Pro Arts!

The fact that the Consignee had to sell the posters and have the posters sold replaced with new inventory in order to be a real receivable was never stated on the DIP reports.

This fraud gave Pro Arts an account receivable listing in June of 1983 that was over $100,000 that would never be paid unless the goods were sold and Pro Arts ceased to continue business with those accounts.

In January and February of l983, Bedell, Angona and Stewart avoided applying the returned posters to the DIP report. It was not until many months after the liquidation of Pro Arts that I discovered their reasons for doing this. January and February were nearly $200,000 per month in Gross Sales. It was during this time Bedell and Stewart hired an outside accounting firm to do a "forecast" on the Pro Arts business.

A "forecast" is used to illustrate to potential investors the profitability of an on going business providing certain facts are consistent in the forecast. If the company projected gross sales of $200,000 per month, then $2.4 million in annual sales would result in a specific indicated amount.

By showing Pro Arts in a $200,000 per month Net Sales position, an investor would be enticed into investing money in this supposed "sure thing."

The only problem with this projection was that the individuals did not give accurate information to the accounting firm while they were preparing the forecast.

On December 14, not only did Rollins and his associate Boyd Page attend the hearing, but their fellow harassing attorneys Peter Cantwell and Steve Smith, Mihalik's Chicago attorneys also attended the hearing.

Also attending the Hearing were legitimate creditors represented by their attorneys: American Greetings had attorney, Paul Ozan; Cleveland Paper had Mr. Fleck; Bedford Anodizing had Mr. DeMayo and Tom Deweise (an owner); Roger Ingraham, Schwemler, Dietrich, Steveson and now David Best (another Roetzel & Andress attorney); Andy Finger and Joe Fornal (Cohen & Co. accountants) were among the many that filled the tiny courtroom.

It turned out to be a real three-ring circus! I knew all the players and their supposed allegations and I found it difficult to follow! Judge White was overwhelmed by the confusion!

Both Cantwell for Mihalik and Page and Rollins for Treffinger and Macon made false statements that were only given substance because they were attorneys making the statements! It was very clear that the numerous hours spent by Dietrich and Stewart in preparation of the Disclosure Statement was wasted.

Dietrich and Stewart were instructed to have a new Disclosure Statement prepared to amend the one that they had originally filed and additional information was required to clarify the Company's position.

It was obvious to me that Cantwell and Page, the two attorneys that continued to harass John, Mike and me, were going to try everything in their power to stop the Reorganization.

Especially Cantwell! Pro Arts had a final judgment against his clients, Mihalik, Useloff and Doughty for $225,000 and Cantwell's blunder for not appearing in court when the judgment was granted would result in a malpractice suit against him if he could not erase that judgment against his clients!