After the Shareholder's Meeting with Dietrich, Best, Stewart, Hallman and Lloyd, Mike, John and I decided to oppose the Plan by Objecting to the "Compromise" that Best had submitted to the bankruptcy court with regards to the Mihalik lawsuit and the Treffinger/Macon lawsuit.

On May 16, 1983, Roger Ingraham, our attorney in those suits, filed an objection with the court stating that the defendants, Mihalik, Useloff and Doughty, were collectable and that the post- petitioned final judgment against them for $225,000 should not be vacated.

On May 20, 1983, both John and I filed similar motions with the bankruptcy court. John had filed an objection to the "Compromise" while I had filed an Objection to the Disclosure Statement and the Re-organization Plan.

John's second Objection filed on May 20th was also an objection to the Disclosure Statement and the Re-organization Plan stating "Bedell and Angona deliberately delayed the contracts for the Real Estate in order to further negotiate the partners (John, Mike and Ted) into a worse position than what was originally agreed upon."

John went on to state in his objection that while he had "given up his stock" in Pro Arts, he doubted the Re-organization Plan as to its feasibility and its projected Performance statements because the present management had illustrated several times during the past eight months that they could not meet the requirements while under protection of the court.

John stated that by adding Mihalik and Treffinger/Macon to the group of new Unsecured Creditors, the legitimate creditors would get half of the funds available to them since Mihalik and Treffinger were both given $500,000 each as a pre-petitioned settlement.

Prior to these "compromises" the legal unsecured creditors were owed $1,000,000 by Pro Arts. Now the Unsecured Debt was $2,000,000! John also alluded to several "conflicts of interest" that over-shadowed the re-organization.

He would explain these conflicts to the court at such time the court gave him the opportunity.

Three days later, on May 23, Dietrich filed a "Motion To Strike" the objections filed by John and me "stating that we had waived all rights to any objections" and that we had no standing as a "party of interest" to object to the Compromises, The Disclosure Statement or the Re-organization Plan."

This was the perfected plan of Dietrich and the conspirators! While John, Mike and I had been negotiated and re-negotiated continuously throughout the re-organization of the company, the Conspirators had been filing their statements with the court and letting the statute of limitations run against us for any objections! While John and I were still unaware of these ramifications that will be disclosed later, these conspirators were planning to eliminate John, Mike and me as objectors to the plan! Roger Stevenson, Dietrich's associate, filed similar motions in court to deny John and me the right to object to the Disclosure Statement and the Plan because time had elapsed preventing a "legal right to do so." On May 24th, Judge White had a hearing in his courtroom to discuss the Objections.

John testified on the witness stand as to the reasons why Mihalik and Treffinger should not be allowed the Compromise.

While Best referred to his written brief in his request for the compromise, it was pointed out by Roger Ingraham that the company's claim against Mihalik was final and that a post-petitioned judgment for $225,000 was collectable in his opinion.

Judge White asked Best if he wanted to "wipe out" the judgment, but Best replied that it was up to the court to decide.

Best lied to the judge! Best had intended to erase the judgment regardless of what the court decided.

While the court ruled NOT TO VACATE THE JUDGMENT and allowed the "Compromise" at the time of confirmation of the Plan, Best, Dietrich and Stevenson plotted to deduct the $225,000 from the allowed $500,000 and pay Mihalik out on the $275,000.

If of course, Judge White did vacate the $225,000 judgment, then Mihalik and his cronies would be paid out on the $500,000 claim! When Judge White stated that the judgment would not be vacated and that it would stand, I thought that the "supposed" $25,000 cash pay out to Mihalik would be off-set against the $225,000 judgment against Mihalik.

Pro Arts would still go after the $200,000 balance.

In fact, the new Amended Disclosure Statement filed June 9th, l983, the day before the Confirmation Hearing on the Plan indicated that the Unsecured Creditors would share in the $225,000 judgment.

Since I had also objected to the Disclosure Statement and Plan, White asked me if I had anything to say at the hearing.

Since I was not represented by my attorney in the Court, I did not want to make any statements regarding my feelings or suspicions until I had an attorney with me.

White understood and I stated that I would have one with me on June 10th when the Confirmation Hearing was scheduled.

After the hearing, Roger Ingraham had a brief conversation with Stewart in the hallway of the courthouse.

Stewart "jokingly" stated to Roger that he (Stewart) should have fired John and me. This indicated Stewart's true feelings toward John and me.

On May 25th, Bedell called to speak with me. I had not spoken with him for nearly eight weeks.

He had lied to me when he said that he would loan me money for my personal lawsuit and then didn't.

I told that I did not trust him at all. I told him that everyone in our family had damages regarding the mismanagement of the business.

With regards to the Mihalik and Treffinger/Macon situation, I told him that he had sold us out and everything was still "up in the air." With Morganstern now representing John, Mike and me, I felt that his ability and knowledge would ultimately protect us against these individuals.