After the May 4th Shareholders' Meeting, very little information was given to Trecini or Ingraham by Dietrich or Stewart. They were very quiet and always had excuses for not having the information, which was requested at the meeting.

Bill Gagliano, our first JMT attorney representing us in the bankruptcy and negotiations with Bedell and Angona in the Real Estate Deal, had botched the real estate agreement and both John and I were not happy with his work.

From May 4th to May 23rd, Stewart put our office through a great deal of work preparing the Accounts Receivable and obtaining information for the Confirmation Hearing, which was rapidly approaching.

We still had not received any information regarding Rooney Pace as was requested at the Shareholders' Meeting.

Stewart had told me that Pro Arts' Consignment Poster Program had gone from the $220,000.00 in Zayre Corporation to nearly $487,000.oo in additional Retail Outlets where this program had been expanded!

Stewart and Bedell had only $110,000.oo in "good" receivables even though the D.I.P. Reports filed with the bankruptcy court indicated nearly double that amount!

Stewart and Bedell had made the new Consignments part of Pro Arts Receivable even though the money could never be collected until after the posters were sold by those accounts AND THE INVENTORY REPLACED WITH POSTERS REPRESENTING THE POSTERS THAT HAD BEEN SOLD!

Stewart and Bedell wanted to show Pro Arts in a better financial position than that which truly existed. This fraud by Stewart and Bedell was recorded month after month in all the D.I.P. Reports filed with the court in which the new consignment accounts had been placed in the Account Receivable portion of the reports.

While the conspirators were "puffing up" Pro Arts sales and Receivables, nothing was ever mentioned to reflect the Net Losses of the Company every month that they controlled the company.

Though the D.I.P. Reports also stated the lack of payment by Bedell and Stewart for the Withholding and the F.I.C.A. taxes, Judge White never demanded those payments even though he had threatened me personally in his court in September of 1982 with liquidation if I failed to pay those taxes every month thereafter! As White was the presiding judge, one would think that his monthly review of the status of a bankrupt company under his authority would set off an alarm about that company if it continued to miss those payments almost every month from January of 1983 through June of 1983?

White may very well be a "nice" man, but as a federal bankruptcy judge, he is a real loser! White's failure to understand the simplest concepts related to information on the D.I.P. Reports, the Disclosure Statements, the Confirmation Plan and all the "deals" and settlements that transpired in his court room best represents the enormity of his ineptness!

Attorneys such as Dietrich, Roetzel & Andress, Schwemler, Brouse & McDowell and others of the same reputation and stature breeze through White's court making representations in court and changing those representations when submitted to the court for White's signature! And White signs these written documents without regards to previous representations, which are contrary to the written word.

It was this fact, which made me very insecure in our current legal representation through Bill Gagliano.

Mike had become a really "loose cannon" and was trying everything to avoid the reality of the existing situation.

Mike was "threatening everyone and threatening to walk away" and let Pro Arts go right into the toilet!

While John and I were trying to save our homes, and Mike's home as well, Mike was just trying to "get out of the situation."

His demands were so unreasonable and his temperament so volatile, Trecini refused to represent Mike because of Mike's unrealistic attitude on the present conditions.

It became necessary of John and me to look for another attorney immediately since the Confirmation Hearing was less than three weeks away!

We needed an attorney that had the reputation of being determined and tenacious. We also needed an attorney that was honest and honorable and had knowledge of bankruptcy law.

And we needed that attorney in a desperate way.

On May 23rd, I called Conrad Morganstern's office in Cleveland, Ohio. I spoke with Jonathan Morganstern, Conrad's son, and explained the terrible situation, which we were presently experiencing.

Jonathan told me that Conrad was out of the country, however he agreed to speak to both John and me in his office that same afternoon!

Both John and I had filed objections to the Pro Arts Plan. Roger Ingraham also filed an objection since the likelihood of Roger losing his 40% fee of the Mihalik $225,000 judgment was at great risk.

Prior to the Morganstern meeting, I handed Stewart copies of John's Objection and my objection to the plan that we had filed with the court.

Though Stewart was slightly shaken, his attitude appeared to be one of lack of interest and "matter of fact." I feel today that Dietrich, Stewart and Bedell had anticipated some sort of objection and were prepared to address that if and when it should happen.

Prior to leaving for the Cleveland meeting, I had spoken to Ingraham and he had related a discussion he had earlier with Schwemler.

It appeared that the Rooney Pace deal was still "hanging in the air." It was not definite that Rooney Pace would be funding the Plan.

Schwemler indicated to Roger that the bank might want to meet an hour earlier at the courthouse the day of the confirmation hearing to discuss "an orderly liquidation" in the event the Rooney Pace deal fell through.

Again, looking back, I see this as another conspirator's attempt to intimidate us into submission. The bank was grinding away our will to resist the up coming planned butchering that they had intended as the final chapter in the bankruptcy of Pro Arts.

I expressed to Roger my grave doubts about the Rooney Pace deal and their "supposed $900,000.oo investment" into Pro Arts.

Since Pro Arts had been mismanaged over the last eight months, I predicted that the $900,000.oo investment would be lost if it in fact was a reality.

I also predicted Pro Arts' eventual liquidation because of these same facts.

Little did I realize at the time of my predictions that Fate would have heard me and decided to do that which I had predicted.