It was very clear that the Plan for Pro Arts' Reorganization was not going to be confirmed in the next few months.

After the December 14 Hearing, Stewart and Dietrich strove onward to get an Amended Disclosure Statement together that was more accurate than their first attempt.

By mid-December, shipments to Pro Arts accounts were about $15,000! The company needed a minimum of $100,000 to at least see a chance at surviving the Chapter 11.

When I told Dietrich about my concerns and the lack of sales, he listened, but I felt as if he was sizing up the situation and would be reporting to Stewart and Bedell my concerns.

When I would walk through Pro Arts' 50,000 square foot warehouse, I knew the company was hurting.

When an engineer sees his locomotive at rest with very little steam, the engineer knows what must be done to get the locomotive moving.

It was this way with Pro Arts and me. Unfortunately, I was no longer the engineer. I was barely a passenger and most of the time I felt like a by-stander watching the locomotive getting weaker and weaker.

Stewart was going to New York more often using the excuse that he was going in to the city to get more money.

Stewart's airfares and daily hotel expenses were a big burden on the company.

He was commuting weekly to Winslow, Maine and often would stop in New York on his way home or on his way to the company.

I had made an appointment with a friend of mine to meet with First National Bank of Akron. This was the holding company that had bought Old Phoenix and Mr. Waldron of the main office had agreed to meet with Frank Gale and me.

The December 21 meeting took place in their Akron office. To my surprise, Waldron had invited Mr. Andrews (one of Waldron's associates) and Donald Bramley of Old Phoenix!

After we passed a few pleasantries, I asked Mr. Andrews and Mr. Waldron if the bank was amenable to lending a new company enough funds to buy assets of Pro Arts if the confirmation did not occur.

Bramley was concerned about this request. He asked me if there was any reason why I felt the reorganization might not be confirmed.

I told Bramley directly that Old Phoenix and Dietrich had been working with the New York investors more than John or me and that he had much more information on what was transpiring than I had.

Bramley had earlier in the conversation stated that once the New York people met the bank's demands and brought both loans current, neither my wife nor I would be personally on the loans. This was a lie since I knew that Old Phoenix had every intention of keeping Mike, John and me on the notes as well as our families!

This again was a feeble attempt by Bramley to convince me that everything was "going well" with the reorganization!

Bramley was always envious of Mike, John and me. He was a brown- nosing suck-up type of person that had aspired to be the executive vice president of Old Phoenix National Bank. With the holding company buying the bank, Bramley finally had an opportunity to aspire beyond his vice president- ship since Dave Jones, OPNB's president, would remain its president for as long as Dave wanted the job. After all, Dave's father had been the Chairman of the Board of Directors when Mike, John and I first came to Medina!

Sure enough, after the Pro Arts liquidation, the holding company made Bramley the president of the Elyria Savings and Loan! This was his reward for probably looking out for the bank's interest.

I related to Bramley, Waldron and Andrews that regardless of the outcome of Pro Arts, I would continue with my pursuits as long as it would be required to see this through to its "ultimate conclusion."

This has been the prime purpose of my life. Not Pro Arts or the bankruptcy, but the finishing of everything that I start regardless of the time or energy needed to complete that which I have begun to do.

With the next scheduled bankruptcy hearing January 10, l983, the conspirators had only four weeks to amend their Disclosure Statement.

On January 5, l983, another secret meeting was held at Old Phoenix National Bank.

The conspirators present at this meeting were: Gary Hallman, Don Bramley, John Schwemler, Stewart, Bedell and Dietrich.

From Dietrich's own personal notes, I discovered the nature of their systematic methods of reducing the previous deals that were agreed upon in October of the previous year!

While John and I had been working under a signed Employment Agreement from October 27, l982 to January 5, l983 (day of the second secret meeting), Bedell was always "late" in paying both John and me. I thought it was for lack of working capital. In fact, it was Bedell's way of reducing his commitment to John and me while continually applying pressure to both John and me.

There were times that I felt so much stress that I would go into my office after everybody had left the plant and verbally shout at the walls in order to relieve the pressure that these people put upon me.

Then, I would sit at my desk and say to myself, "They haven't beaten me yet! And it will take a hell of a lot more than this to even get near to beating me!"

With this resolve, I was able to think clearly. It had not yet entered my mind that the bank was conspiring against me with Dietrich's group and Bedell's group!

In the January 5, l983 meeting, Bedell stated to everyone present at that meeting that he had loaned Pro Arts $298,000.

Dietrich added in parenthesis:

"(I'm still not clear on how much he has received back)"

This indicated that even Dietrich was skeptical as to the total loans of Bedell to Pro Arts!

Bedell also O K'd the release of the $37,500 in interest payments to the bank that was promised at the November 30th meeting earlier.

The bank was not yet aware that Bedell and Angona had diverted the $9,000 Post dated check money of Kedd Canada to New York. In fact, Bedell agrees to send the bank the $9,000 if Kedd does not make the checks good to the bank.

There is $83,820.00 in the OPNB Lock Box account that was to be paid to the IRS, yet OPNB is still holding on to it!

More significantly than this, Schwemler stated that he was going to talk to Judge White at the January 10 Disclosure Statement Hearing and state:

"a) No bonus payments (to John and me under the employment agreements) until and so long as Co. is in Bankruptcy and b) he will under no circumstances confirm a plan if TNT (me) will be receiving the benefits of existing employ. agree."

" Thereafter, employment agreement will be renegot- iated and , if TNT (me again) refuses, OPNB (my bank) will have to threat- en to "pull the plug."

Attorneys often use the statement, "pull the plug," and bankers to best illustrate their intentions of allowing everything (in the tub) to go down the drain if their demands are not met!

But you will note that Schwemler did not say that OPNB WOULD PULL THE PLUG! The bank will only threaten to pull the plug!

Since the bank will see $37,500 in interest money from Bedell, it is Bedell's way of "buying" the bank! This interest money is bottom line profit to the bank since it does not reduce the principal amount on the existing loans.

The bank viewed Bedell as their only solution to walking "whole" from the bankruptcy and the fact that my family and I had paid OPNB over a Million Dollars in interest since 1970 was never taken into consideration. Like toilet paper, after they used us, they were prepared to "flush" us.

John and I both attended the Hearing on January 10, l983. Everyone present at the December Hearing was present at the January 10 Hearing.

Dietrich put Stewart on the witness stand and after Stewart was sworn in, Dietrich began to ask Stewart about the new Amended Disclosure Statement.

Dietrich asked Stewart about the Bedell loans to Pro Arts from September 8 to December 31, l982.

Stewart answered that Bedell had loaned Pro Arts $298,000.

When this figure was stated under oath, both John and I looked at each other and said that Bedell could not have possibly loaned Pro Arts that much money. As the checks were often held and payroll was never met on time, the $298,000 added to Pro Arts cash flow from new receivables would have given Pro Arts an abundance of cash!

Later, I questioned both Dietrich and Stewart on the $298,000 loan and asked for the documentation that supported this sworn testimony.

I was unaware of Dietrich's January 5 notes in which he questioned that amount since I did not get the notes until long after the company was liquidated. Yet, Dietrich, with doubts as to the amount of the loan, placed Stewart on the witness stand to testify to something under oath that as an attorney he even doubted!

A few weeks later, Dietrich admitted to me on the telephone that Stewart had arrived at a figure that placed the loan closer to $205,000!

Again, it was not until much later that I discovered Stewart's work papers while looking through millions of Pro Arts papers and I learned that a more accurate figure that "might" have been loaned for the four-month period was only $105,000!!!

By mid-January, l983, Pro Arts was still trying to formulate its Chapter 11 Plan and new Disclosure Statement.

Bedell continued to re- negotiate our Real Estate Deal and John and my employment agreements.

As the conspirators had a meeting on January 5 to discuss the Plan and my employment agreement, I was unaware of the bank's attorney Schwemler's threat to "threaten to pull the plug," if I did not re-negotiate my employment agreement.

On January 25, l993, I called Schwemler and taped our conversation so that I could discuss the meat of the conversation with John. Schwemler, a soft spoken man, often difficult to understand, made it quite clear to me that "they" (Bedell and Angona) were going to continue to negotiate us up to and including the Confirmation Hearing.

He sounded as if the bank was doing us a favor by continuing to accept the delays in the Confirmation. Little did I know that Bedell had paid the bank over $37,000 in interest shortly before my conversation with Schwemler! Then, in a matter of fact manner, he asked me, "Do you want the bank to pull the plug" on the Chapter 11? This, I later discovered, was the same threat he stated he would use on me in their January 5th meeting! Schwemler had a very subtle way of sticking in his knife and turning it just enough to make you back down on a confrontation

It was after my conversation on January 25th with Schwemler that I entered Stewart's office while he was on the telephone to Dietrich. They were discussing the $298,000 Bedell loan to Pro Arts and Stewart told Dietrich that he was going to "muddle" the next Report to the bankruptcy court so as to make the loan difficult to track down. It was here that I realized that Dietrich and Roetzel & Andress were working with Bedell, Angona and Stewart to hide the true circumstance of Pro Arts' condition. Dietrich also knew that my request for confirmation of the $298,000 loan from Bedell would not be forth coming and Dietrich was also aware that Bankruptcy Fraud was being perpetrated upon the Court, the Creditors and me.

On January 26, I called Bill Gagliano, our JMT attorney, and told Bill about the false $298,000 loan of Bedell. I also told him that Dietrich indicated to me that both Stewart and he had placed the real figure at $205,000.oo! Even though I had no proof to support my feelings and suspicions, I told Bill that I would not go to jail in any cover-up regarding the false information provided to the court by Dietrich, Stewart and Bedell!

On January 28, John had told me that another check to Pro Arts from Kedd in Canada had been "stopped" and that Hallman was aware of this. Now the $9,000 in "stop payment funds" was really $13,000! This money was to have been placed in the Federal Ordered Lock Box account. Yet, Bedell was using this money in New York. I believe it was part of the $37,000.oo Bedell gave Old Phoenix National Bank in the interest payment Bedell made to the bank that month. So Old Phoenix got it anyway even though it was in violation of the Judge's order! I believe that Judge White is viewed by the attorneys in his court as an incompetent judge. The attorneys prepare orders for the Judge to sign that are not what was stated in his presence in court. White is often confused and cannot keep track of the players let alone the plays! This was very evident at the Confirmation Hearing when he kept calling Conrad Morgenstern, "Morgenstein."

It was about this time that I discovered Bedell's intention to give Stewart 10% of Pro Arts stock! I believe it was Bedell's way of paying Stewart off for the frauds he was committing in bankruptcy court! As a "partner" in the corporation with more to gain than a salary, Bedell would use Stewart until the plan was finally confirmed.

Stewart told me that he had hired a man named Dick Caleo as a sales consultant and they were going to pay him $4,800 per month! Here was Bedell knocking down my employment agreement and then hiring Caleo at about $60,000 per year to sell something that I had been selling for fourteen years. I was so up set with this maneuver that I later called Dietrich in his office to voice my anger. Dietrich said that he could do nothing. He had me on the speaker telephone never disclosing that Stewart and Stevenson were in his office listening to me. As Dietrich got closer and closer to funding the plan, he became more and more drawn into Bedell's plan. Since his firm had large dollars owed to it for their "legal services," my threats to disrupt the plan were being taken quite seriously by all the conspirators.

Though I threatened to terminate the officers and directors through my proxy votes of the shareholders, Dietrich asked if I had petitioned the court as of that time. I told him that Gagliano would do that if it became necessary.

Throughout this entire time, I felt that Bedell had falsified his loans to the company in order to gain a better control of the company. Little did I know that Bedell was laundering a $1,000,000 loan that he had made to the New York Mafia from his Penvest Pension Fund!

In early February, after Gagliano had completed the Real Estate papers for JMT, I had arrived at a tentative "working agreement" with Stewart and Bedell. Little did I realize that this agreement was only a ploy on their part to keep me "quite" while they negotiated with Roger Faherty and Beckman in New York. These two individuals would be sucked into the web and eventually cause their clients to lose an additional $1,000,000 or more dollars as Pro Arts would eventually wind up in liquidation.

When I was required by Stewart to go into Roetzel & Andress's Akron office to sign the February 10, l983 Disclosure Statement, I suspected that Stewart had a reason for my signature to be on the bankruptcy document.

When I arrived at Roger Stevenson's office, Dietrich and Stewart were not there. Stevenson stated that I should sign the document as Vice President because Stewart would sign it when he arrived there later. Stewart had gone to Cohen & Co. in Cleveland on the accounting projection for the Confirmation Hearing and was scheduled to arrive in Akron before the Clerk's Office in Bankruptcy Court closed that same afternoon.

As I read the acceptances of claims by the Unsecured Creditors, I realized that Dietrich, Stevenson, Stewart, Bedell and Angona had allowed Greg Happ's fraudulent claim of $21,069.95!

I vehemently told Stevenson that the claim was only about $1,000.oo since Happ had resigned from Pro Arts and his last statements for service rendered clearly stated Happ was only owed about $1,000.oo!

Again Stevenson said that Stewart and Dietrich approved the $21,000.00 claim and that they wanted me to sign the Disclosure Statement so they could file it by that afternoon. It was at that moment Stewart appeared in Stevenson's office and I again reiterated my objection to the false claim allowance of Happ.

Stewart, as President of Pro Arts and my superior, demanded that I sign the document. I not wanting to be fired by Stewart for not obeying his demand signed the document.

It bothered me for several days. I asked John about the situation when he returned from his sales trip. We used to meet in the Employee's Lounge after everyone had gone home to discuss the events that had transpired during John's absence and I brought up the incident of the Disclosure Statement and Greg Happ's fraudulent $21,000.oo Claim. John was also aware of Happ's $1,000.oo personal debt to Pro Arts and John expressed a great concern about me signing the document and suggested that I ask Roger Ingraham, our personal attorney, about the event.

A few days later, while visiting with Roger in his office, I told Roger about the Disclosure Statement and the fact that the conspirators had allowed Happ's $21,000.00 claim. Roger was very distressed about this since he knew that Happ's last bill to Pro Arts was about $1,000.00. Roger had taken over Happ's responsibilities when Happ resigned and Happ had sent a Final Bill indicating the transition was only about $1,000.00 in Happ's time and expenses.

I asked Roger if I had committed any illegal act by signing the Disclosure Statement allowing Happ's $21,000.00 claim when in fact, at the time I signed the document, I knew the correct amount to be only $1,000.oo.

I will never forget Roger's answer as he looked up from his desk, "Ted, I would rather not answer that question."

It was then and there that I knew that I had done something seriously wrong! Roger gave me the only answer that left him free from any involvement or malpractice. If he stated "No.", I would have a claim against him for giving me false legal advice. If he stated, "Yes," then he would be knowingly acknowledging to me the fact that the Disclosure Statement was false in that respect and that I had perjured myself in signing that document!

It was also during this time that Bedell was experiencing tremendous pressure from lack of working capital. Old Phoenix knew this since they were reading the D.I.P. Reports filed each month with the Bankruptcy Court. The fact that the Federal Withholding Tax and the Social Security tax remained unpaid on several occasions was now becoming more and more evident. It is interesting to note that Judge White had chastised me in September for failing to pay these taxes and threatened to liquidate Pro Arts if I missed one of these payments and now, after December of l982, Bedell and Angona had missed these payments regularly and no one was making any bones about it!

I learned that on February 16, l983, Stewart had written a personal check to Pro Arts for $5,300.00 to be deposited in the Pro Arts payroll account by Hallman at Old Phoenix. This was to cover the payroll for that weekend. Then Stewart wrote a $5,300.00 check from Pro Arts to himself to cover the $5,300.00 check he had given to Hallman. Hallman knew that this was to "kite" the check for payroll and that the "float" normally allowed about five to seven business days for the checks to clear between states. (Today, it is a maximum of Five days, but some checks have cleared in less time).

It was on February 16th that Stewart's checked to Pro Arts bounced! John had learned from the office manager, Bonnie, that nothing had come in on collections and the check had been returned for lack of funds to clear it!

Mike had suffered during this time since Bedell had withheld money that I normally advanced to Mike and Sandra. Mike was becoming more and more hostile towards John and me and his threats now extended to both John's family and my family. Mike had threatened John so many times that John now refused to even speak to Mike. John always looked out for Sandra and the kids.

John would often go to their home and take some of the children to their school because they had missed the school bus. In spite of Mike's threats, I continued to talk to him for fear of shutting him off and perhaps having to face him with a gun in his hand. I felt as long as he could ventilate his anger verbally on me, he would not take extreme measures that could injure anyone. But even this began to create a tremendous amount of stress on me.

Bedell kept promising me a loan to cover many outstanding obligations that were increasing each day. I needed money for a personal suit in which I had sued a bank and stamp company in New York for fraud. I had a very good case, but it required an expert witness to testify and his plane fare from Denver was cash I had to pay to get him into the courtroom. Judge Manos, a Greek Federal Judge in Cleveland, had the case before him and I felt that I had a good chance to win. Not because he was a Greek, but his reputation for being a "fair" judge was widely known. Little did I know that several years later, Judge Manos would ultimately screw me to the wall!

Stewart was continuing to influence Happ in the course of things to come. In early March, Stewart had written a letter to Ann Happ offering to either pay her $100,000.oo on the Billie Bear Project or to give her the entire project if the company failed to pay her the $100,000.00! This simple little letter indicated, "Once out of Chapter 11, the Billie Project would be very good for the Happs!" All that was required was to get all the Creditors to agree to the Final Plan. Since Greg Happ was the Medina County Prosecutor and made the final decision regarding the payment plan on the Pro Arts back taxes, any effort to object to the Pro Arts Plan would adversely affect the Billie Project!

I believe that Assistant Medina County Prosecutor Kimbler was unaware of Greg Happ's motives in controlling the County's position through the Prosecutor's Office. Kimbler filed an Objection to Pro Arts' proposal to pay the $80,000.oo in back taxes in 16 payments of $5,000.00 each. Kimbler has insisted upon 5 payments of $16,000.00 each!

It was this Objection that prompted Dietrich to state to me in our conversation about the false $21,000.00 claim that he would see what he could do about changing Happ's claim back to the $1,000.00 amount. Dietrich said, "since it appeared that Happ was not cooperating with them." (This conversation took place nearly five days after Kimbler had filed his Objection to the Pro Arts Plan.)

One primary factor for John, Mike and I to agree to the reorganization plan was the sale of our real estate to Bedell and Angona. As we approached a tentative Confirmation Date, the rent due JMT had accrued to nearly $96,000.00! This post petitioned rent was on the D.I.P. Reports and had to be addressed under the Chapter 11 Rules. JMT only owed Old Phoenix about $76,000.00 in back Mortgage payments since May of l982. Old Phoenix position not to accept any plan without both loans being current was a ploy on their part to keep John, Mike and me "in line" until the Confirmation Hearing. Since the Real Estate was worth well over $1,000,000.00 and the New Pro Arts would be a very solid company after the confirmation, the bank had other ideas about the real estate that were never disclosed to John, Mike or me. This would also surface at a later date.

Gagliano had prepared the real estate documents, but his inexperience resulted in very shoddy workmanship on the contracts! He neglected to state that JMT would hold a Second Mortgage after Old Phoenix's First Mortgage and he neglected to have a Dower's Clause put into the agreement because of Angona and Bedell's wives. Under Ohio law, a foreclosure could result in their wives having an interest in the real estate even if our foreclosure was successful!

Luckily, John had missed signing a few pages in the Real Estate Contracts prior to filing them with the Court. I guess that Real Estate law is very specific when contracts are required. All the T's must be crossed and the I's dotted. Any unsigned document requiring a signature results in not having an agreement! Bedell knew this, as did Dietrich. So the agreements had to be revised AGAIN!