Not only were Bedell and Angona deceiving John and me on the Confirmation Plan, they had been discussing additional financing through a Wall Street Broker named Roger Faherty.

Angona had met a securities attorney named Michael Beckman with the New York firm of Bell, Kalnick, Beckman, Klee and Green.

Beckman probably had heard about Pro Arts through his brother-in-law who had been in the licensing business with a large merchandising company in New York City.

Beckman had known Faherty through a few stock deals that Beckman had done with Faherty's company, Rooney Pace.

Rooney Pace was a very well known underwriting company in New York that was to have raised over $120 million for a few companies in the three or four years that they had been in business.

Beckman's firm was very good at preparing Security and Exchange Registration papers for soon to be "over-the-counter" companies.(OTC)

I am sure that Angona and Bedell grossly overstated Pro Arts' condition at the time of their first introductions. Bedell and Angona were in desperate need of additional capital as the company was rapidly being run into the ground.

Since Pro Arts was "eating money" on a weekly basis and Stewart had failed to generate the needed sales to generate the cash flow, Beckman and his Rooney Pace contacts were prime clients for swift investments.

Beckman saw a few good opportunities for himself when Bedell and Angona approached him.

If Beckman took Pro Arts, the "Farrah Fawcett Poster Company", public with an "over-the-counter" stock offering after Pro Arts came out of Chapter 11, his firm would profit from the preparation of the SEC Prospectus and Beckman could obtain "insider stock" at the ground level. He could sell it for much more than it cost him to acquire the stock especially if Pro Arts happened to hit another block- buster poster in the interim.

With Stewart, Bedell and Angona working over the Pro Arts Debtor-In-Possession (D.I.P.) Reports to the bankruptcy court, the Pro Arts picture was promising even though the company was losing over $100,000 each month from September of 1982 through June of 1983!

This major loss of Assets was not being reported to the creditors or the court.

Roger Faherty became extremely interested in Pro Arts. So much so that he neglected to discuss the possibilities of the Pro Arts deal with anybody from the Rooney Pace Company!

Faherty planned to do the deal directly with Pro Arts and Beckman's firm and to acquire the needed cash prior to going public through outside personal investors known by both Beckman and Faherty.

With Faherty and Beckman's contacts in New York, they began to acquire interested investors for the Pro Arts confirmation. Yet, the Court wanted to confirm the plan as quickly as possible and without good sales in the first four months of 1983, Pro Arts was slowly going out of business.

Faherty had written two letters on Rooney Pace stationery indicating Rooney Pace's desire to fund the Reorganization Plan of Pro Arts. One of these letters was sent to Judge White in the bankruptcy court. Yet, Rooney Pace was not to be part of the plan in any manner whatsoever.

Faherty had used the Rooney Pace name to give credibility to his proposal. After all, Rooney Pace had a very good name on Wall Street.

A New York accounting firm was hired in March of 1983 to prepare a "forecast" of the Pro Arts business based upon the January and February 1983 Sales figures filed in the D.I.P. Reports at the bankruptcy court.

Though the D.I.P. Reports showed Gross Sales of nearly $200,000 for each month, Pro Arts had lost nearly $150,000 in assets for those same two months!

Bedell, Stewart and Angona failed to include the thousands of dollars in returned posters that were to be applied to the Gross Sales figure!

The accounting company was unaware of the returned posters and unaware of the great loss for the two-month period that their forecast had been based upon.

The accounting firm actually prepared a forecast that would have enticed even the most conservative investor to purchase stock in Pro Arts.

It was during the months of April and May that the conspirators were truly plotting the course of my own destruction.

As I mentioned earlier, Dietrich and Stevenson of Roetzel & Andress had filed the Disclosure Statement in bankruptcy court allowing Medina County Prosecutor Greg Happ's personal claim in the amount of $21,069.95.

The fact that I had told Stewart, Dietrich and Stevenson Pro Arts only owed Happ about $1,000 was known to them at the time they filed the papers with the court.

Because Stewart demanded that I sign the Disclosure Statement with Happ's fraudulent claim. It was their attempt to ensnare me into their plans and to have "something over me" when it came time to confirm the Plan.

I had called Dietrich on March 23, 1983 to object to the $21,069.95 claim Happ had filed fraudulently with the court.

Dietrich assured me twice that he would change the allowance back to the $1,000 figure that I had stated was the true amount due Happ.

Dietrich told me that they had only allowed Happ's $21,000 claim in hopes that it would improve the chances of Happ cooperating with them.

Kimbler, Happ's Assistant County Prosecutor, had filed an objection to the method of payment the plan proposed to the Medina County Treasurer a few days before my call to Dietrich of which I was unaware.

Dietrich told me that since it appeared that Happ was not going to cooperate with them, Dietrich was going to see what he could do about changing Happ's $21,000 claim back to the true $1,000 figure that I had told them the amount was.

As Dietrich had stated on several occasions that Pro Arts was on the verge of going out of business, it was essential for Bedell, Dietrich, Stewart and Angona to have all potential objections to the plan eradicated before the Confirmation Hearing.

Dietrich had proposed a sixteen-payment plan to Medina County of $5,000 per payment.

Medina County wanted five payments of $16,000 each.

Without the New York investors, the $5,000 payment was easier to pay than a $16,000 payment. It was important for Dietrich to have this $5,000 payment accepted by Medina County.