Supreme Court of Ohio Clerk of Court - Filed April 07, 2017 - Case No.

2017-0474

IN THE SUPREME COURT OF OHIO

CONNIE MCGIRR :
792 Tuggle Road : Case No.:
Lancaster, Kentucky 40444 :
:
And :
:
MARY ANN BAILEY :
307 Scott Avenue :
Cumberland, Kentucky 40823 :
:
And :
:
DEBBIE CARMAN-STATON :
P.O. Box 390 :
Hustonville, Kentucky 40437 : ORIGINAL ACTION IN
: PROHIBITION
And :
:
PATRICIA GAUNCE :
440 Wells Lane :
Versailles, Kentucky 40383 :
:
And :
:
NORMA HALL :
564 Grandchester Street :
Lexington, Kentucky 40505 :
:
And :
:
JOYCE HANLEY :
2532 Dressage Way :
Lexington, Kentucky 40504 :
:
And :
:
ALICIA ROBERTS, Trustee :
ESTATE OF MARJORIE HULSE :
3413 Flintridge Circle :
Lexington, KY 40517 :
:
And :
:
:
LISA PEEK :
3109 N. Ky Hwy 501 :
Kings Mountain, KY 40442 :
:
And :
:
BRENDA RENTAS :
on behalf of ANTHONY RENTAS :
120 Old Chapel Gap School Road :
Crab Orchard, Kentucky 40419 :
:
And :
:
ESTATE OF SHEILA FITCH :
c/o Penny L. Hines, Esq. :
504 E. Mt. Vernon Street :
Somerset, Kentucky 42501 :
:
And :
:
MICHELLE SHARPE-ROBERTS :
3154 Clear Fork :
Eubank, Kentucky 42567 :
:
And :
:
CORINA STEARNS :
P.O. Box 1515 :
Russell Springs, Kentuckyy 42642-1515 :
:
And :
:
LISA SWIGER :
P.O. Box 433 :
Saylersville, Kentucky 41465 :
:
And :
:
STEPHANIE CARTER, Adminx :
ESTATE OF LINDA TOLER :
P.O. Box 3482 :
Wise, Virginia 24293 :
:
And :
DEBORAH TURNER :
1112 Phoenix Garden :
Lawrenceburg, Kentucky 40342 :
:
And :
:
BETTY JEAN WIDNER :
P.O. Box 362 :
Evarts, Kentucky 40828 :
:
And :
:
JOYCE A. BROWN :
2513 Ridgefield Lane :
Lexington, Kentucky 40509 :
:
And :
:
LINDA DUNAWAY :
P.O. Box 62 :
Cumberland, Kentucky 40823 :
:
And :
:
BILLIE JUNE ROBERTS :
320 Logan Creek Drive :
Stanford, Kentucky 40484 :
:
Relators, :
:
vs. :
:
HONORABLE RALPH WINKLER, :
Hamilton County Court of Common :
Pleas :
Probate Court Division :
230 East 9th Street, 10th Floor :
Cincinnati, OH 45202 :
:
Respondent. :
_______________________________________________________

RELATORS COMPLAINT FOR WRIT OF PROHIBITION

____________________________________________________________

Brian S. Sullivan (0040219)

DINSMORE & SHOHL LLP
255 E. Fifth Street, Suite 1900
Cincinnati, Ohio 45202
Phone: (513) 977-8200
Fax: (513) 977-8141
Email: [email protected]

Attorney for Relators

 COMPLAINT FOR WRIT OF PROHIBITION

NOW COME RELATORS, by and through their undersigned counsel, and for

their Petition for Writ of Prohibition, state as follows:

INTRODUCTION

Stanley M. Chesley was disbarred by the Supreme Court of Kentucky for his

misconduct related to the theft of settlement funds from Relators and hundreds of other

former clients. A Kentucky Court subsequently entered a $42 million judgment against

him for that same conduct. Prior to resigning his license to practice law in Ohio, Chesley

entered into a Wind-Up Agreement that purported to transfer his most valuable visible

asset, his interest in Waite, Schneider, Bayless and Chesley Co. LPA (WSBC), to a long

time friend and employee, Thomas Rehme. The Kentucky Court ultimately determined

that agreement to be a sham transaction and that Chesley continued to control WSBC

and direct where its income was paid. Chesley has brazenly defied the Kentucky Courts

execution orders directing him to transfer his interest in WSBC to Relators counsel and

has violated asset discovery orders. His motivation is clear. Since the Kentucky

judgment was entered against him, Chesley has reaped the benefit of $29 million in fees.

In addition to his defiance of Kentucky Court orders, Chesley has filed multiple

actions in Ohio state courts against his former clients, including an action against their

counsel that led this Court to issue a peremptory writ of prohibition. Still undeterred,

after the Relators filed an action to domesticate the Kentucky Judgment, Chesley filed

multiple objections to the domestication. Those unwarranted objections resulted in the

trial court in the domestication action sanctioning Chesley and his counsel.

After significant discovery of Chesleys continued receipt of income from WSBC

that the Kentucky Court ordered be paid to Relators and discovery showing that Chesley

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also transferred his personal assets out of his name in an attempt to render himself

insolvent, Relators filed a fraudulent transfer action in the United States District Court

for the Southern District of Ohio against Chesley, WSBC and Thomas Rehme. Five

months after that action was filed, and after a two day preliminary injunction hearing,

Chesley once again utilized Thomas Rehme and the Wind-Up Agreement to transfer his

interest in WSBC to someone new. In the new transfer scheme, Thomas Rehme

transferred the shares of WSBC to Eric Goering, as Assignee for WSBC. This transfer

was built entirely upon the first transfer from Chesley to Rehme that the Kentucky Court

ruled was a sham. Now there are two sham transfers.

Judge Winkler presides over a probate court action that was initiated by Thomas

Rehme transferring the shares of WSBC and granting Mr. Goering, full power of

substitution under the Wind-Up Agreement. The action filed in the probate court on

behalf of WSBC is an assignment for the benefit of creditors (ABC Action). The

initiating document in the probate court states the action was filed for the purported

purpose of allowing WSBC to providing an orderly process of paying its debts and

obligations, pursuant to an Ohio statute. But, WSBCs full time accountant and

Thomas Rehme had previously testified that WSBC has no debt. In addition, WSBC has

repeatedly argued that Relators are not creditors of WSBC and have no rights to its

assets. Rather than being insolvent, Relators have shown that WSBC has millions of

dollars in outstanding fee income, a large portion of which will be paid following a

fairness hearing in Colorado on April 28, 2017. That income and other income was

specifically awarded to Relators by the Kentucky Court but Judge Winkler has refused to

honor the Kentucky Court orders.

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 In fact, the entire inventory of assets filed by the Assignee lists only those assets

that are expressly subject to the Kentucky Courts June 23, 2015 and September 25,

2015 execution orders. Those same assets are also the subject of a fraudulent transfer

action pending in United States District Court for the Southern District of Ohio against

Chesley, Rehme and WSBC. Presiding Judge Robert Cleland found that the transfer

appears to be with the intent to frustrate judgment creditors and that WSBC appears

to be forum shopping.

Relators Motion to Dismiss or in the Alternative to Stay the ABC Action was

denied by Magistrate Rogena Stargel and that Order was adopted by Judge Winkler on

March 14, 2017. The Orders ignore the Kentucky Orders requiring Chesley to turn over

his interest in WSBC to the Relators and the Full Faith and Credit Clause of the

Constitution of the United States. The Magistrate acknowledged that the transfer of

WSBC was likely made to avoid an adverse ruling in the fraudulent transfer action

pending in federal court.

Judge Winkler is without jurisdiction to allow the probate action to proceed

because the action violates Kentucky Court execution orders and the Full Faith and

Credit Clause of the United States Constitution. Judge Winkler also lacks jurisdiction

because the transfer of the ownership of WSBC by Rehme upon which the action is

based is a sham transfer. Further, Judge Winkler lacks jurisdiction to allow the action

to proceed because the statutory requirements relied upon in the probate action have

not been met. Instead, the action is another abuse of the judicial process by Stanley

Chesley that constitutes the extraordinary circumstances that justify a peremptory writ

of prohibition.

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 JURISDICTION

1. This Court has jurisdiction over original actions in prohibition to prevent

the unlawful exercise of jurisdiction by Respondent Judge Ralph E. Winkler, a judge in

the Hamilton County Probate Court, an inferior court, under Section 2(b)(1)(d) of

Article IV of the Ohio Constitution.

2. This Complaint for Writ of Prohibition seeks an order from this Court

finding that Judge Winkler lacks jurisdiction over this action because the action violates

Kentucky orders enforcing its judgment and the Full Faith and Credit Clause of the

Constitution of the United States; the action is based entirely upon a transaction

judicially determined to be a sham; the action fails to meet the threshold fact necessary

to invoke the statute upon which the action is based an insolvent Company with

creditors; and the action abuses the judicial processes of Ohio courts, constituting a

continuing pattern of filing vexatious lawsuits and pleadings designed to frustrate

judgment creditors in the collection of their judgment. The abuse of the judicial process

also extends to filing the action before Respondent as a blatant attempt at forum

shopping to avoid unfavorable rulings from an action pending in the United States

District Court for the Southern District of Ohio that is already addressing the issues and

remedies sought before the Probate Court.

PARTIES

3. The named Relators, Connie McGirr, Mary Ann Bailey, Debbie Carman-

Staton, Patricia Gaunce, Norma Hall, Joyce Hanley, Alicia Roberts, Trustee for the

Estate of Marjorie Hulse, Lisa Peek, Brenda Rentas on behalf of Anthony Rentas, Estate

of Sheila Fitch, Michelle Sharpe-Roberts, Corina Stearns, Lisa Swiger, Stephanie Carter,

Administrator for the Estate of Linda Toler, Deborah Turner, Betty Jean Widner, Joyce

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A. Brown, Linda Dunaway, and Billie June Roberts are 19 individuals out of a class of

more than 300 plaintiffs who were awarded a $42 million judgment against Stanley

Chesley, a former Kentucky and Ohio attorney, in the Circuit Court for Boone County,

Kentucky. See Mildred Abbott, et al. v. Stanley M. Chesley, et al., Case No. 05-CI-

00436 in the Circuit Court for Boone County, Kentucky (the Abbott Action). The

named Relators represent themselves and all others similarly situated who may be

Plaintiffs (hereinafter collectively referred to as Relators insofar as it references the

underlying Probate Court matter).1

4. Prior to his permanent disbarment in Kentucky and his retirement from

the practice of law in Ohio, Chesley was the president and sole shareholder of Waite

Schneider Bayless & Chesley Co., L.P.A. (WSBC). Chesley purported to transfer his

interest in WSBC to Thomas F. Rehme, retaining a beneficial interest in all fee income

earned prior to the date he ceased being an attorney.

5. Judge Winkler is a judge on Hamilton County Court of Common Pleas,

Probate Division. He is the presiding judge in In re: Waite Schneider Bayless & Chesley

Co., L.P.A., Case No. 2016003659, an assignment for the benefit of creditors action

regarding WSBC (ABC Action).

THE KENTUCKY LITIGATION AND CHESLEYS DISBARMENT

6. In December 2004, Relators filed a lawsuit against Chesley and three

other attorneys for breaching their fiduciary duties by stealing millions of dollars in

settlement funds during their representation of Relators. See Abbott v. Chesley, 413

S.W.3d 589, 596 (Ky. 2013) (affirming judgment against Chelseys co-defendants).

1 The Relators are also plaintiffs in other lawsuits described in this Complaint and are referred to as
such where appropriate.

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 7. On March 21, 2013, the Supreme Court of Kentucky permanently

disbarred Chesley from the practice of law in Kentucky for his conduct in the Abbott

Action. See Kentucky Bar Assn v. Chesley, 393 S.W.3d 584, 593 (Ky. 2013). In

rendering that opinion, the Supreme Court stated that Chesley knowingly participated

in a scheme to skim millions of dollars in excess attorneys fees from unknowing

clients. Id. at 599.2

8. At the time of his disbarment, Chesley was the sole shareholder, president,

sole member of the board of directors and registered agent for service of process for his

law firm, WSBC. On April 15, 2013, just weeks after being permanently disbarred in

Kentucky and the day before resigning from the practice of law in Ohio, Chesley entered

into a Wind-Up Agreement with Thomas Rehme, his longtime friend and the secretary

of WSBC. See Wind-Up Agreement (copy attached as Exhibit 1).

9. Under the Wind-Up Agreement, Rehme agreed to hold 100% of Chesleys

shares in WSBC in trust for the exclusive purpose of winding up the Corporation for the

benefit of its employees, creditors and Transferor [Chesley].

10. After the Supreme Court of Kentucky permanently disbarred Chesley for

his misconduct, the Plaintiffs in the Abbott Action (including Relators) moved for

summary judgment against him on their breach of fiduciary duty claims. The trial court

granted that motion and also ruled that Chesley was jointly and severally liable with his

co-defendants for the $42 million judgment against them (the Kentucky Judgment).

See Order (Aug. 1, 2014) (copy attached as Exhibit 2). The Court of Appeals of

2 Chesleys co-counsel in the Abbott Action, three attorneys in Kentucky and one associate attorney,
along with the trial judge in the Abbott Action, were all also permanently disbarred from the practice of
law in Kentucky prior to Chesley. See Kentucky Bar Assn v. Bamberger, 354 S.W.3d 576 (Ky. 2011);
Kentucky Bar Assn v. Helmers, 353 S.W.3d 599 (Ky. 2011); Kentucky Bar Assn v. Mills, 318 S.W.3d 89
(Ky. 2010); Cunningham v. Kentucky Bar Assn, 266 S.W.3d 808 (Ky. 2008); Gallion v. Kentucky Bar
Assn, 266 S.W.3d 802 (Ky. 2008).

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Kentucky affirmed the Kentucky Judgment in all respects. See Chesley v. Abbott, Case

No. 2014-CA-001725, 2017 WL 943973 (Ky. Ct. App. Mar. 10, 2017)

11. Chesley has never paid any amount of the Kentucky Judgment. Plaintiffs

in the Abbott Action conducted post-judgment discovery. As a part of that discovery,

Chesley disclosed the Wind-Up Agreement.

12. Plaintiffs in the Abbott Action filed a Motion to Transfer Beneficial

Interest in Property Held in Trust in the Kentucky Court. The Kentucky trial court

granted that motion on June 23, 2015. See Order (June 23, 2015) (copy attached as

Exhibit 3).

13. The June 23, 2015 Order recognized that Chesley still owns a beneficial

interest in WSBC. Id. at 2. It also recognized that the Abbott Plaintiffs were within their

rights to seek the Courts help in collecting their valid judgment against Chesley. Id.

14. Accordingly, the June 23, 2015 Order required as follows:

a. Defendant Chesley shall direct that his beneficial interest in the shares

of WSBC be transferred to Plaintiffs within fourteen (14) days of the

date of this Order and all distributions pursuant to said interest are to

be made to Plaintiffs through their counsel;

b. Defendant Chesley is hereby Ordered to direct Thomas F. Rehme to

make all payments derived from Chesleys interest in the shares of

WSBC payable to the Plaintiffs through their counsel, Hon. Angela

Ford;

c. If for any reason, including but not limited to any action by another

court in any other jurisdiction, monetary payment(s) is/are made to

Chesley from his interest in WSBC, Chesley and his attorney shall

7
 immediately turn over said payment(s) to Plaintiffs counsel, Angela

Ford;

d. Defendant Chesley and his counsel are to provide a copy of this Order

to Thomas F. Rehme.

Id. at 3. Neither Chesley nor his counsel complied with any part of the June 23, 2015

Order other than the requirement to provide a copy of the Order to Rehme.

15. Chesley moved for relief from the June 23, 2015, but the Supreme Court of

Kentucky affirmed the Court of Appeals denial of relief. See Chesley v. Abbott, 503

S.W.3d 148 (Ky. 2016), reconsideration denied (Ky. Oct. 20, 2016).

16. After additional post-judgment discovery and additional investigation, the

Plaintiffs in the Abbott Action discovered that Chesley failed to identify fee income

responsive to discovery requests. This was outstanding fee income WSBC would receive

for cases in progress at the time of Chesleys disbarment in Kentucky and retirement in

Ohio, representing fees earned prior to the date of Chesleys retirement. That money

would ultimately be payable to Chesley, and through him to the Plaintiffs in the Abbott

Action by virtue of the June 23, 2015 Order.

17. Based upon additional discovery and his failure to comply with the June

23, 2015 Order, Plaintiffs in the Abbott Action filed a Motion to Execute with the

Kentucky court. That court granted the Motion on September 25, 2015, holding that the

Wind-Up Agreement was a sham and that Chesley continued to control WSBC and

direct where money was paid, including fees of over $16 million. See Order (Sept. 25,

2015) at 2-3 (copy attached as Exhibit 4).

18. The Kentucky court found that Chesley was utilizing WSBC and its

existence during what is supposed to be a wind-up period, to prevent Plaintiffs, his

8
judgment creditors, from executing on their Judgment. Id. at 4. The Kentucky court

further found that Chesley was taking action to render himself insolvent while directing

assets to WSBC, including fees from the Fannie Mae Litigation and tobacco litigation,

and the transfer of $59 million from his personal accounts to WSBC. Id. Because the

Wind-Up Agreement was a sham, in reality Chesley retains control of WSBC. Id.

19. In granting the Motion to Execute, the Kentucky court ordered as follows:

a. Defendant Chesley shall immediately transfer his ownership

interest in WSBC to the Plaintiffs through their undersigned

counsel. This Courts June 23, 2015 Order remains in full effect. As

directed in that Order, Defendant Chesley and his attorneys shall

immediately turn over to Plaintiffs counsel any and all monetary

payments made to Defendant Chesley from his interest in WSBC;

b. Defendant Chesley shall immediately direct the Trustee of the

Castano Trust that all payments to which he and/or WSBC are

entitled from the Castano Trust shall be paid directly to Plaintiffs

counsel; and

c. Defendant Chesley shall advise the Court in the matter of Merilyn

Cook, et al. v. Rockwell Intl Corp., Case No. 1:90-cv-00181-JLK, in

the United States District Court for the District of Colorado that all

payments or fees to which he and/or WSBC are entitled shall be

paid directly to Plaintiffs through their undersigned counsel.

Id. at 4-5. Chesley has not complied with the terms of the September 25, 2015 Order.

As a result of Chesleys refusal to comply with the Kentucky courts Orders, the Kentucky

9
Court ordered a show cause hearing for Chesley to appear and explain his non-

compliance. Chesley did not appear and a warrant was issued for his arrest.

CHESLEYS EFFORTS IN OHIO TO BLOCK

ENFORCEMENT OF THE KENTUCKY JUDGMENT

20. Chesley filed suit against the Sheriff for Hamilton County, Ohio and

obtained an injunction preventing all law enforcement from complying with the arrest

warrant issued in Kentucky. See Stanley M. Chesley v. Hamilton County Sheriff Jim

Neil, Case No. A1506294 in the Court of Common Pleas, Hamilton County, Ohio. That

action was dismissed without prejudice by the parties on January 17, 2017. See

Dismissal (Jan. 17, 2017) (copy attached as Exhibit 5). Nevertheless, according to

statements from the Boone County Sherriffs director of extradition, the Hamilton

County Sheriff appears to continue to refuse to serve the warrant. See Kentucky

appellate court to Chesley: You owe $42 million, CityBeat (Mar. 20, 2017) (copy

attached as Exhibit 6) (see also news/article/20855279/kentucky-appellate-court-to-

chesley-you-owe-42-million (last visited Mar. 29, 2017)).

21. Chesley has filed other cases and objections seeking to block enforcement

of the Kentucky Judgment in Ohio prior to the filing of the ABC Action that is the

subject of this Complaint. He filed a lawsuit against the Kentucky counsel for the

Plaintiffs in the Abbott Action, obtaining a temporary restraining order prohibiting

Plaintiffs counsel and any Ohio counsel with whom she associated from domesticating

the Kentucky Judgment or even engaging in post-judgment discovery in Ohio. See

Stanley M. Chesley v. Angela M. Ford, Esq., et al., Case No. A1500067 in the Court of

Common Pleas, Hamilton County, Ohio. This Court issued a peremptory writ of

prohibition in that action and ordered the trial judge in that case to vacate his orders.

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See State ex rel. Ford v. Ruehlman, Case No. 2015-1470, Slip Opn No. 2016-Ohio-3529,

2016 WL 3438954 (Ohio June 21, 2016).

22. After this Court issued its peremptory writ of prohibition, the Abbott

Plaintiffs filed an action to domesticate the Kentucky Judgment. See Abbott v. Chesley,

Case No. EX1600448 in the Court of Common Pleas, Hamilton County, Ohio. Chesleys

objection to the domestication was unwarranted and merely repeated the arguments

this Court rejected in Case No. 2015-1470. Chesleys unwarranted objection resulted in

the trial court in the domestication action sanctioning Chesley and his counsel, stating

that it was frivolous because it was not supported by the law, was intended to delay

Plaintiffs from collecting their judgment and caused a needless increase in the cost of

litigation. See Decision and Order (Feb. 6, 2017) (copy attached as Exhibit 7).

23. Chesley also filed Stanley M. Chesley, et al. v. Probate Estate of Danny

Lee Abney, et al., Case No. A1602508 in the Court of Common Pleas, Hamilton County,

Ohio. That action repeated arguments and sought disclosure of information previously

set forth in post judgment motions in the Abbott action in Kentucky, Stanley M. Chesley

v. Angela M. Ford, Esq., and the domestication action.

RELATORS FILE A FRAUDULENT TRANSFER ACTION

24. On April 12, 2016, certain of the Abbott Plaintiffs filed an action in the

United States District Court for the Southern District of Ohio against Chesley, Rehme

and WSBC alleging, among other counts, fraudulent transfer. See McGirr, et al. v.

Rehme, et al., Case No. 1:16-cv-00464-RHC (McGirr Action). A copy of the First

Amended Complaint in the McGirr Action is attached to this Complaint as Exhibit 8).

(see also electronic docket in McGirr Action at #93). That action also requested the

11
appointment of a receiver or trustee to take control of WSBC and its assets. Id. at 44 (

8 of Prayer for Relief).

25. The McGirr Action is based upon the fact that Chesley has engaged in

transfers with Rehme and WSBC that are fraudulent transfers pursuant to Ohios

Uniform Fraudulent Transfer Act (UFTA), made for purposes and with the intent to

hinder, delay or defraud the McGirr Plaintiffs as Chesleys judgment creditors.

26. The McGirr Plaintiffs assert that Chesleys transfer of WSBC to Rehme

under the Wind-Up Agreement was itself a fraudulent transfer. The McGirr Plaintiffs

filed a motion for partial summary judgment on that claim on March 13, 2017. See

Plaintiffs Mot. Partial Summ. J. at 28-32 (copy attached as Exhibit 9); see also

electronic docket in McGirr Action at #99 (motion and memorandum) and #100

(exhibits)).

27. Chesley has good reason for his machinations. Since the entry of the

Kentucky judgment against him, he has directed the payment of over $29 million in fee

income. Id. at 15.

28. The McGirr Plaintiffs also moved for summary judgment on the claim that

Chesleys transfer of the right to receive structured payments of fees from tobacco

litigation (the Castano Trust) to WSBC was a fraudulent transfer. Id. at 32-34. The

Castano Trust payments were payments the Kentucky Court specifically ordered Chesley

to transfer to the Abbott Plaintiffs.

29. The McGirr Plaintiffs also moved for summary judgment on the claim that

WSBC is the alter ego of Chesley. Id. at 34-36. The Kentucky court in the Abbott Action

already found that the Wind-Up Agreement was a sham and that Chesley continued to

control and direct WSBC for the purpose of delaying and hindering the Abbott Plaintiffs

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ability to collect their judgment against him. Order (Sept. 25, 2015) at 4. He did so by

engaging in an intentional scheme to squirrel assets into liability-free corporations

while heaping liabilities upon an asset-free corporation. Id. (quoting Inter-Tel Tech.,

Inc. v. Linn Station Properties, LLC, 360 S.W.3d 152, 168 (Ky. 2012)). Since the

September 25, 2o15 Order, Plaintiffs obtained additional information showing Chesleys

complete control of WSBC and use of it for his own personal purposes. This additional

proof proves that WSBC is the alter ego of Chesley under Ohio law, providing direct

liability because the two are the same entity. See McGirr Mot. Partial Summ. J. at 34-

36.

30. The Court in the McGirr Action held a hearing on Plaintiffs motion for a

preliminary injunction on July 26, 2016. (See McGirr electronic docket at #59

(transcript of proceedings). That motion remains pending.

REHMES IMPROPER TRANSFER OF WSBC

AND THE PROBATE ACTION PRESIDED OVER BY JUDGE WINKLER

31. On August 30, 2016 (after the McGirr courts preliminary injunction

hearing), Rehme incorporated Thomas F. Rehme, Trustee, Inc. (Trustee, Inc.), an

Ohio for-profit corporation. See Articles of Incorporation (copy attached as Exhibit

10);https://www5.sos.state.oh.us/ords/f?p=100:7:0::NO:7:P7_CHARTER_NUM:3934

352 (last visited Mar. 22, 2017).

32. On September 1, 2016 Thomas Rehme, on behalf of WSBC, transferred the

shares of WSBC to Thomas F. Rehme, Trustee Inc. as the New Owner. See, Joint

Written Consent to Action of Shareholder and the Board of Directors of Waite Schneider

Bayless & Chesley Co., L.P.A. (copy attached as Exhibit 11) On the same day, Trustee,

Inc. transferred the shares of WSBC to Eric Goering, as Assignee. See Deed of

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Assignment for the Benefit of Creditors (Deed) (copy attached as Exhibit 12)

(showing Rehme signing on behalf of Thomas F. Rehme, Trustee, Inc. as the sole

shareholder of WSBC).

33. Trustee, Inc. is not duly licensed, certificated or otherwise legally

authorized to render legal services in the State of Ohio. Consequently, Rehme could not

legally transfer the shares of WSBC to Trustee, Inc.

34. Pursuant to Ohio Revised Code 1785.07, a shareholder in a professional

association may sell or transfer his or her shares in the association only to another

individual who is duly licensed, certificated, or otherwise legally authorized to render in

the State of Ohio the same professional services as those for which the associated was

organized.

35. On September 9, 2016, the ABC Action was initiated when Thomas Rehme

signed the Deed, to provide an orderly process for the satisfaction of its debts and

obligations, pursuant to Ohio Revised Code Section 1313.01, et seq. See Deed at 1. The

Deed is signed By Thomas F. Rehme, Trustee, Inc., sole shareholder and in his

capacity as President and Sole Director. Id. at 1 and 4. The Deed purports to transfer

all of the property of WSBC, including the Wind-Up Agreement between Stanley Chesley

and Thomas Rehme, in trust to Eric Goering and grants him full power of substitution

under the Wind-Up Agreement. Id. at 2-3.

36. The ABC Action lists only personal creditors of Stanley Chesley. See

Assignee Mem. Oppn Mot. Dismiss at 13-14 (see infra at 45).

37. The ABC Action inventory lists only assets expressly subject to the

Kentucky Courts June 23, 2015 and September 25, 2015 execution orders. See

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Assignees Inventory (copy attached as Exhibit 13). Those same assets are also the

subject of the pending fraudulent transfer claims in the McGirr Action.

38. The ABC Action violates the September 25, 2015 Kentucky order and is a

clear attempt to make an end run around the McGirr Action to remove assets from

WSBC before the court in the McGirr Action rules on the motion for a preliminary

injunction, which requested, among other relief, the appointment of an impartial

receiver.

39. The plaintiffs in the McGirr Action filed a motion for a temporary

restraining order regarding the ABC Action. See McGirr electronic docket at # 71).

40. The McGirr court granted that motion and entered a temporary

restraining order. See Temporary Restraining Order (Sept. 19, 2016) (copy attached as

Exhibit 14); see also McGirr electronic docket at #75). The McGirr court noted that

the transfer to Goering was without consideration and appears to be with the intent

to frustrate the judgment creditors. Id. at 1.

41. Since the McGirr court has the power to order the same relief sought in the

ABC Action, that court concluded that WSBC appears to be forum shopping and [t]he

purported transfer of assets and new litigation is nothing more than an attempt to have

an Ohio state court decide issues that are properly pending before [the McGirr court].

Id. at 2.

42. The McGirr court also found the timing of the transfer and the filing of the

ABC Action to be particularly troubling, as it came shortly after a two-day hearing on a

motion for preliminary injunction, which was still pending, along with a motion for

leave to amend the complaint. Id.

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 43. The McGirr court also found a significant danger of irreparable harm due

to the ability of WSBC to dissipate its assets through the use of Goering as the Assignee

in the ABC Action. Id. The ABC Action purports to give Goering the authority to sell all

of WSBCs assets for the benefit of its creditors. However, despite the Kentucky orders

requiring Chesley to transfer his interest in WSBC to Plaintiffs and ordering that the

Abbott Plaintiffs can directly execute on the assets of WSBC, WSBC has repeatedly

argued that the Plaintiffs are not creditors of WSBC and have no rights to its assets. Id.

44. Consequently, through this purported assignment, Rehme/WSBC has

attempted to remove the decision regarding Plaintiffs status as a creditor, which is

squarely before the McGirr court, from that court and place it in the plenary

discretion of [Goering], who will have unfettered authority to deny Plaintiffs claim and

sell or liquidate all WSBC assets before a fair and impartial decision can be made. Id.

at 2-3.

45. The McGirr court renewed the temporary restraining order on October 17,

2016. See Extended Temporary Restraining Order (copy attached as Exhibit 15); see

also McGirr electronic docket at # 83).

46. Additionally, the ABC Action is essentially a state alternative to a federal

bankruptcy action. However, both Rehme and WSBCs accountant, Steve Horner, have

testified very clearly that WSBC has no debt. See Dep. T. Rehme at 63:9-14; Dep. S.

Horner at 55:15-24 (copies attached hereto as Exhibits 16 and 17). There is no valid

reason for an assignment for the benefit of creditors.

RELATORS MOTION TO DISMISS THE ABC ACTION

47. Given these circumstances, the Relators filed a Motion to Dismiss or in the

Alternative to Stay the ABC Action on December 13, 2016. See Motion to Dismiss, or in

16
the Alternative to Stay the Proceedings in, the Assignment for the Benefit of Creditors

Action (copy attached as Exhibit 18). Goering filed a response in opposition to

Relators motion. See Assignees Memorandum in Opposition to Motion to Dismiss or,

in the Alternative, Stay Proceeds (copy attached as Exhibit 19).

48. Magistrate Rogena D. Stargel held a hearing on the Motion to Dismiss on

January 10, 2017. See Partial Transcription of Hearing (copy included as exhibit to

Movants Objections, see infra at 54). Magistrate Stargel entered her order denying

the Relators Motion to Dismiss on January 19, 2017. See Order Denying Motion to

Dismiss (Jan. 19, 2017) (copy attached as Exhibit 20).

49. The Magistrates Order completely ignored the Kentucky Orders requiring

Chesley to turn over his interest in WSBC to the Abbott Plaintiffs, stating that [t]he

purpose of the ABC action is to wind-up the business affairs of WSBC, to liquidate the

assets of the corporation, to pay the creditors of the corporation and to distribute any

remaining assets to Stanley Chesley in settlement of his beneficial interest. Id. at 5.

But, Chesley has no beneficial or other interest in WSBC he was ordered to transfer his

interest to Relators and the other Abbott Plaintiffs counsel. See Kentucky Orders

(Exhibits 3 and 4 supra at 11-18).

50. The Magistrate also found that Relators lack standing to assert any

objections to these proceedings as they are not creditors of WSBC. At best the Movants

are creditors of Stanley Chesley. See Magistrate Order, Exhibit 20. Nevertheless,

the Magistrate and Judge Winkler allowed Relators to appear, without objection, file

pleadings and otherwise participate in the ABC Action. Despite their counsels

appearance in the action, counsel for the assignee of WSBC has bypassed Relators

counsel and served Relators directly with multiple notices in the ABC Action and an

17
extensive claim form approved by Judge Winkler that requires notarized signatures and

the individual payment of filing fees totaling over $5,700. See Order Establishing Bar

Dates for Filing Proofs of Claims, Approving Form and Manner of Notice Thereof and

Approving the Claim Form and Publication Notice (copy attached as Exhibit 21)

51. The Supreme Court of Kentucky has already ruled on the June 23, 2015

Order referring to it as an order which required Chesley to comply with an unpaid

judgment that was entered to give force to that nearly one year-old judgment and as

a post-judgment order in furtherance of Respondents efforts to collect on the

outstanding judgment against Chesley. Chesley v. Abbott, 503 S.W.3d 148, 153-54 (Ky.

2016), reconsideration denied (Ky. Oct. 20, 2016). Now, according to Judge Winkler,

Relators must file a new action asserting rights already granted to them in Kentucky.

52. The Full Faith and Credit Clause of the Constitution of the United States

provides that each State must give full faith and credit to the judicial proceedings of

every other State. U.S. Const., Art. IV, 1. If the state rendering a judgment has

jurisdiction over the defendant and the subject matter of the controversy, then the Full

Faith and Credit Clause precludes an inquiry into the merits of the cause of action, the

logic or consistency of the decision, or the validity of the legal principles on which the

judgment is based. Milliken v. Meyer, 311 U.S. 457, 462 (1940). The judgment is

entitled to the credit which it has in the State from which it is taken, not the credit that

under other circumstances and conditions it might have had. Morris v. Jones, 329 U.S.

545, 550-51 (1947).

53. Pursuant to the Full Faith and Credit Clause, the Kentucky courts

decisions are controlling. Chesleys beneficial interest in WSBC was transferred to the

Abbott Plaintiffs by operation of the June 23, 2015 Kentucky Order. The Kentucky

18
courts September 25, 2015 Order held that Chesleys purported transfer of legal

ownership of WSBC was a sham, meaning that Rehme never legally owned anything he

could transfer.

54. Even if Rehme could have been deemed to own a legal interest in WSBC

that could be transferred to Goering, he did not do so. Rather, Rehme transferred the

interest to Trustee, Inc., a for-profit corporation. Trustee, Inc. is not an Ohio lawyer or

an LPA. Consequently, it cannot be a shareholder of WSBC and there was no proper

transfer of Trustee, Inc. to Goering.

55. The Magistrate acknowledged that the transfer of WSBC was likely made

to avoid an adverse ruling in the pending McGirr Action in federal court. See Transcript

at 54:15-20) (Exhibit 22). This is the same forum-shopping conduct identified by the

court in the McGirr Action. The Magistrates Order nevertheless allowed the blatant

forum shopping to continue, allowing Chesley to switch horses in the middle of the

McGirr Action because he did not like the McGirr courts rulings.3

56. The Magistrates Order also purported to protect WSBCs creditors,

ignoring the fact that no such creditors exist. Exhibits 16 and 17. (Dep. T. Rehme at

63:9-14; Dep. S. Horner at 55:15-24). All purported creditors identified by the Assignee

are not creditors of WSBC, but rather creditors of Chesley personally. Yet the

Magistrates Order inexplicably states that Relators, who are certainly creditors of

Chesley, are not creditors of WSBC. The Magistrate states that Relators may be able to

3 While Rehme was nominally the individual engaging in the transfers of WSBC, there can be no
doubt that Chesley was pulling the strings. This is evidenced by the Kentucky courts September 25, 2015
Order holding that the Wind-Up Agreement was a sham and Chesley was continuing to control WSBC and
use it for his own purposes. Exhibit 4. Additionally, since then Relators uncovered additional,
overwhelming evidence of Chesleys control since that order was entered, all of which is currently before
the McGirr court in their motion for partial summary judgment. Exhibit 9; see also electronic docket in
McGirr Action at #99 and #100.

19
assert an interest in money due Mr. Chesley and may be able to request distribution of

these funds but they must file an action to protect their interests. See Magistrate

Order, Exhibit 20.

57. Relators raised all of these issues in their objections to the Magistrates

Order. See Movants Objections (copy attached as Exhibit 23).

58. Judge Winkler denied Relators objections and adopted the Magistrates

Order on March 14, 2017. See Entry Denying Objections and Adopting Magistrates

Order (copy attached as Exhibit 24).

COUNT ONE: WRIT OF PROHIBITION

59. Relators repeat and reallege the foregoing allegations as if fully restated

herein.

60. As this Court has stated, [i]t is well-settled that proceedings in probate

court are restricted to those actions permitted by statute and by the Constitution, since

the probate court is a court of limited jurisdiction. Corron v. Corron, 40 Ohio St. 3d

75, 77, 531 N.E.2d 708, 710 (Ohio 1988). Insofar as it relates to this matter, pursuant to

Ohio Revised Code 2101.24(A)(1)(h), the Probate Courts jurisdiction is [t]o qualify

assignees, appoint and qualify trustees and commissioners of insolvents, control their

conduct, and settle their accounts.

61. Judge Winkler has allowed the action to proceed despite the clear violation

by Rehme and the Assignee of the Kentucky Courts judgment enforcement Orders, all

in violation of Relators rights under the Full Faith and Credit Clause of the United

States Constitution. Judge Winkler has sanctioned violation of the Kentucky Orders and

is compelling Relators to re-litigate matters decided in a sister state, to incur substantial

attorneys fees and pay fees for the right to assert a claim for an asset already awarded to

20
them with no assurance a new claim will be honored. Judge Winkler is allowing the

assets of WSBC to be dissipated by Goering.

62. Judge Winkler also does not have jurisdiction over an ABC Action

regarding WSBC because WSBC is not insolvent. It has no debt according to Rehme, its

trustee, and Steve Horner, its accountant. What WSBC does have is income, including

fee income from cases transferred to Relators by the Kentucky Courts September 25,

2015 Order. The supposed creditors identified by Goering are creditors of Chesley,

including an IRS lien in excess of $3 million and a debt claimed by Chesley himself.

63. Chesley and WSBCs history demonstrates that this is not an assignment

made for the benefit of the creditors of an insolvent, but rather just one more attempt by

Chesley to prevent Relators and his other judgment creditors from executing on their

judgment against him, just as he has done for the last two and a half years since the

Kentucky Judgment was entered. The Kentucky courts September 25, 2015 Order

holding that Chesley continued to control WSBC and that the Wind-Up Agreement was

a sham and the additional evidence discovered since that time shows Chesleys clear and

complete control of WSBC.

64. Judge Winkler further does not have jurisdiction over the ABC Action

because the assignment of WSBC is not valid. First, for Goering to have any rights in

WSBC, Rehme in the first instance would have to have a right in WSBC to transfer.

West Broad Chiropractic v. American Family Ins., 122 Ohio St. 3d 497, 499, 912 N.E.2d

1093, 1095-96, 14 (Ohio 2009) (defining an assignment as a transfer to another of

all or part of ones property in exchange for valuable consideration and stating that [a]

vested right in the assigned property is required to confer a complete and present right

on the assignee). Rehme had no such interest. By operation of the Kentucky Orders,

21
Relators, are the owners of Chesleys interest in WSBC and Rehme had no interest to

transfer. Rehme was a participant in a sham transaction that has been disregarded.

Second, Relators, as plaintiffs in the McGirr Action, have alleged that Chesleys transfer

of WSBC to Rehme in 2013 was itself a fraudulent transfer pursuant to the UFTA and

they moved for summary judgment on that basis.

65. Judge Winkler is also without jurisdiction because Rehmes transfer to

Trustee, Inc. is invalid because WSBCs shares may only be sold to an individual who is

licensed to practice law in Ohio. See Ohio Revised Code 1785.05, -.07. Trustee, Inc.

is a for-profit corporation, not an individual licensed to practice law. Goering can only

take whatever interest in WSBC was owned by Trustee, Inc. Since the transfer to

Trustee, Inc. was invalid, the subsequent transfer to Goering was likewise invalid.

66. This Court permits a writ of prohibition where (1) the court or officer

against whom it is sought is about to exercise judicial or quasi-judicial power, (2) the

exercise of such power is unauthorized by law, and (3) the refusal of the writ will result

in injury for which no other adequate remedy exists. Commercial Sav. Bank v. Wyandot

Cty. Court of Common Pleas, 35 Ohio St. 3d 192, 193, 519 N.E.2d 647 (1988) (citing

State ex rel. Starner v. De Hoff, 18 Ohio St. 3d 163, 164 (1985)). This court has also

allowed a writ of prohibition when a party has engaged in a continuing and vexatious

abuse of the judicial process. Id. (citing State ex rel. Stark v. Summit Cty. Court of

Common Pleas, 31 Ohio St. 3d 324 (1987)).

67. The ABC Action that Judge Winkler presides over is just one more step in

Chesleys continuing and vexatious filings in Ohio courts designed for the sole purpose

of frustrating the efforts of Relators and the other Abbott plaintiffs to collect their

longstanding judgment against him. Prior to them taking any action at all to

22
domesticate the Kentucky Judgment in Ohio, Chesley filed the action before Judge

Ruehlman for which this Court granted a writ of prohibition, holding that Judge

Ruehlman had no authority to impose conditions exceeding the statutory requirements

for domesticating foreign judgments. See State ex rel. Ford v. Ruehlman, Case No.

2015-1470, Slip Opn No. 2016-Ohio-3529, 2016 WL 3438954 (Ohio June 21, 2016); see

also supra at 21.

68. Once this Courts rulings allowed the Abbott Plaintiffs to file their

domestication action, Chesley objected to the domestication and raised nothing more

than the arguments this Court already rejected, resulting in sanctions against Chesley

and his counsel. See supra at 22.

69. He also filed another action in the Court of Common Pleas against the

Estate of Danny Lee Abney, the decedent of one of the Abbott Plaintiffs upon similar

grounds.

70. Additionally, after Chesley violated the Kentucky courts order to appear

and show cause why he should not be held in contempt for failing to comply with its

orders and the Kentucky court issued a bench warrant for his arrest, Chesley filed an

action against the Sheriff for Hamilton County and obtained an injunction preventing

compliance with the Kentucky warrant. See supra at 20.

71. Chesley, who has been in complete control of everything WSBC does, using

Rehme as the nominal owner when he desires, orchestrated the ABC Action in order to

circumvent the McGirr Action and what were already unfavorable rulings. That court

had already held a two-day hearing on the McGirr Plaintiffs motion for a preliminary

injunction seeking the same relief available in the ABC Action. The McGirr court

23
recognized this conduct for what it is blatant forum shopping that cannot be tolerated.

See Mitan v. International Fidelity Ins. Co., 23 F. Appx 292, 298-99 (6th Cir. 2001).

72. The further abuse of the judicial process is shown by the fact that WSBC

does not have any debts for the ABC Action to administer. The only creditors identified

are all creditors of Chesley individually, not WSBC. Chesley is trying to use the ABC

Action to pay his other creditors and collect the remainder of WSBCs assets for himself,

never paying any portion of the Kentucky Judgment and avoiding Relators judgment

lien that has priority over Chesleys creditors.

73. This is an extraordinary circumstance identified by this Court as justifying

a writ of prohibition. See supra 66.

74. Judge Winkler has already acted, and is reasonably expected to continue

to exercise judicial or quasi-judicial power to administer the ABC Action without regard

to his lack of jurisdiction, thus facilitating Chesleys further abuse of the judicial process

to avoid paying the judgment against him.

75. Unless Judge Winkler is prohibited from exceeding his jurisdiction,

Relators will suffer irreparable harm. Chesley will continue to control and dissipate all

assets, including those that are the subject of the McGirr Action as fraudulent transfers.

Relators lawful right to enforce and collect their judgment pursuant to Ohio law is being

denied.

76. Because Judge Winkler is without jurisdiction whatsoever to act, the

availability or adequacy of an appellate remedy is immaterial. State ex rel. Stern v.

Mascio, 75 Ohio St. 3d 422, 425, 662 N.E.2d 370, 373 (Ohio 1996).

24
 77. Regardless, no suitable, adequate and expedient remedy is available at law

to avoid the irreparable harm which will result from the violation of lawful jurisdictional

authority.

78. Relators are entitled to a Writ of Prohibition preventing Judge Winkler

from acting in a judicial and/or quasi-judicial manner with a patent and unambiguous

lack of jurisdiction and authority.

79. Relators are entitled to a Writ of Prohibition preventing Judge Winkler

from continuing to hear the ABC Action.

PRAYER FOR RELIEF

Relators request and are entitled to a writ of prohibition. Based on the foregoing,

Judge Winkler patently lacks jurisdiction or authority to continue to hear the ABC

Action. Relators are entitled to a peremptory writ of prohibition barring Judge Winkler

from asserting jurisdiction over the ABC Action. The ABC Action should be dismissed.

Relators also ask this Court to grant such other relief as this Court may deem just

and proper. Costs should be taxed to Respondent.

25
Respectfully submitted,

s/Brian S. Sullivan
Brian S. Sullivan (0040219)
DINSMORE & SHOHL LLP
255 E. Fifth Street, Suite 1900
Cincinnati, Ohio 45202
Phone: (513) 977-8200
Fax: (513) 977-8141
Email: [email protected]

Attorney for Relators

26
STATE OF OHIO
SS.
COUNTY OF HAMILTON

Brian S. Sullivan, being duly cautioned and sworn, deposes and states as follows:

1. My name is Brian S. Sullivan, and I have personal knowledge of the facts

contained in this affidavit.

2. I am one of the attorneys of record for the Relators in the case pending in the

Hamilton County Court of Common Pleas, Probate Division Case No. 2016003659.

3. The facts pertaining to the proceedings in the Hamilton County Court of Common

Pleas before Probate Judge Ralph Winkler as set forth in the Complaint for Writ of Prohibition

are true and accurate based on my personal knowledge.

4. The materials which are included as exhibits to this Complaint for Writ of

Prohibition were all generated and issued in connection with the aforementioned litigation and

related litigation. The copies which were issued are maintained in the ordinary course of my law

practice.

FURTHER AFFIANT SAYETH NAUGHT.

Br n S. Sullivan

Subscribed and sworn to before me, a Notary Public, this / 44- day of April, 2017.

Not ry Public

Sarah B. Cameron,Attorney At Law

NOTARY PUBLIC - STATE OF OHIO
My commission has no expiration date
Sec.147.03 R.C.
 EXHIBIT 1

Wind-Up Agreement & Associated Documents 6 Z)

 CONFIDENTIAL WSBC - 1

:
w.IJ.rp-uP AG-,RU0M4NT t
I

This WS{D-UP AGREEMENT (the ooAgreemenf') is made as of April 15, 2013 (the i

"Effective Date") by and between STANLEY M. CHESLEY (the 'oransferor"), and THOMAS iI
F. RBHME (the "Transferee"). The signatories to this A.greement are collectively refened to as
te'?arties,"
I
1

'WHBREAS, the law firm of 'Waite, Schneider, Bayless & Chesley Co., L.P.A. (the I
I
"Corportion') is an Ohio legal professional association formed and maintained under Chapter I
I
1785 ofthe Ohio Revissd Code. t
I

I
WHEREAS, Trsferor is the sole shareholde of the Corporation and serves as ts I
President.

IVHERAS, Transferee is te secretary of the Corporation and an attomcy in good

standing and licensed to practice law in the State of Ohio.

WHEREAS, effective Aprii 16, 2013, Transferor is retiring from the practice of law, and
tenderng to the Ohio Supreme Court the notice necessry to effeotuate such retirement.

WIIER.EAS, under Seotion 1785.05, a professional association may issue ts capital stock
only to persons who aro duly licensed, certificated, or otherwse legally authorized to render
within the state of Ohio the sanle professional services as that for which the association was
organized,

WHEREAS, undcr Section 1785.07 of the Ohio Revsed Code, a sharcholdcr or

professional association may sell or transfer that shareholder's shaes in the asocation only to
another individual who is duly licensed, certificated, or otherwise legally authorized to render
within thc State of Ohio thc same professional ssrvices that for which the associaton ws
organized.

WHEREAS, under Opinion2002-12 of the Board of Commissioners on Grievances and

Discipline of the Supreme Court of Ohio, an attorney m&y not practice in a legai professional
association in which a non-afforney has an interest.

IVHEREAS, Transferor desires to transfer, on the terms and conditions set forth below,
his shaes in the Corporation to the Transferee to be held in trust so that the Corporatior may
avoid a premature or involuntary dissolution and Transferee may conduct an orderly wind-up of
the Coqporation for the benefit of its employees, creditors, and Transferor.

NOW, THEREFORB, in muhral consdetation of the promises and performance of the

othsr, snd for other good and valuabie consideration, receipt and sufficiency of which are hereby
acknowledged, Transferor arrd Transferee hereby agree as follows:
 CONFIDBNTIAL WSBC - 2

i
!

i
I
i
!

Section 1. TrAnsfer,.n$d Assisnm.e"nt of Shares in -qFanv. I

i

Transferor hereby transfers and assigns his 225 shares in the Corporation (the I
I

"Shares") to Transferee to be held in trust for the exclusive ptu?oses of winding up the i
I
I
Coporation for the benefit of its employees, creditors, and Transferor. I

Secton 2. Besigntion.
I
I
t
I
i
Trasferor hereby resigns from all positions with the Corporation, including that I

of President and an employee. j

I

Sectlon 3. Considefation,

As Transferee is holding the Shares in trust, no considcration is paid for the

Shgres.

Section 4. Tlindin&-Vn of Operations.

4,1, \Yind-Up. As contemplated under Section 1701.88 of the Ohio

Revised Code, Transfereo agrees and shall proceed.with winding up the Corporatio'l's affairs. It
is the intention of the Parties that the winding up of the Corporation's operations be conducted in
zuch a way as to rna.ximze protection of the Corporation's clints' interest, ncluding ptotecting
the confidentiatity of all privileged communications and othenise maintain as appropriate under
the Ohio Rules of Professional Conduct all client files. As Bart of the windng up of the
eorporatiorffi arsferee -shall-pro ceed-t'o l*'

(a) terninate or negotiate the ternination of all executory, non"client

agreemetrts;

(b) resolve, sesure, satisfy, and/or negotiate ail cEdit' owed by the
Colporation;

(c) as appropriate, assist in hansfening slients of the Corporation to new legal

counsel;

(d) identify and ascount for all assets reasonably to be olvned, used, or in the
possession of the Company, of every kind whatsoever srid wheresoevel located, including but
not limitcd to furniture, books, ppers, computers, data processing records, evidence of debt,
bank accounts, savings accouuts, brokerage accounts, acrtificates ofdeposit, and stocks, bonds,
debentues and other securities;

G) terminate employees;

( terminate all employee benefit programs and provide for their proper
dispostion;

)
 CONFIDENT'IAL WSBC - 3

(g) liquidate corporate assets and distibute proceeds to creditors as required

and fhe remainder to Transferor; provided, however, Transferor my not receive or partcipate in
any legal fees relating to his own efforts or ilrose of other atbomeys except for services performed
prior to the Effective Date and may not participate under any circumslances in any legal fees
earned from the efforts of any attorney undsrtaken after the Effective Date; and

(h) cause Corportion to maintain professional liabil insurnce coverage or

report endorsement coverage insurance for a period of time not less than the applicable statute of
limitations for any legal services provided by Colporation or any of its current, former ot retired
individuat attorneys.

4,2. Use of Namg" Pending the dissolution of the Corporation, Transfeor

aulhorizes Transferee to continue to us the name of Transferor pursuntto Rule l.l7 of the
Ohio Rulcs of Professional Conduct. Flowever, any specific reference to Ttmsferor shall
identiS Transfeor as "Retired."

4,3. Dissolutlon gf the orpoJation. Upon conclwion of the winding up

of the Corporation's operations, Transfere shall dissolve the Cotporation pursunt to Sestions
1701.S6 and 1701.87 ofthe Oho Rsvised Code.

Sectlon 5. Indernnificatluu Ey Th Cornotg[i.op-

5.1. Genqral Indemn{g+tion. The Corporation shall defend, indemnify and

hold Transferor harmless from and againsf any and all claims, litigation, liabilties, and
cllgationrof-every-kind-and-description;eontingent-or-othorwi.setarising frora-or-relati-ve-to-{a).- -
the busiuess, operation or ownorshp of.the Corporation, irreqpeotive of when asserted; and (b)
any and all actions, suits, proceedings, damages, assessments, judgments, costs and expenses
(including resonable attomeys' feos), related to ny of the foregoing.

5.2. Dnvis Litigaldq!. In flrc case Jaile,.$ahneider. Beylgs & Chesley Co.
L.P.\, v. AIlr L. a.yis, U.S. District Court, Southem District of Ohio Case No. 1:11-cv-00851,
the Defendant has sought to join Transferor as an indivdual defendant. The Corporation shall
eontinue to opposojoinder ofTransferor as a defendant in such case and, ifjoinder ofTransferor
is nonetheless granted, shall indemnify and hold Transferor hannless of any claims asssrted in
such ncton.

Section 6. Successors and Agisns. Transferor may not assign this Agreement.
Except as othcrwise expressly provded in this Agreement, tho terms and provisions of this
Agreement shall bind the heirs and executors of Transferor; provided, however, Transferor
reserves the rigbt to amend this Agreeme,nt, including substituting a new trustee, provided the
shares in the Corporation, if not dissolved, ate held by an attomey in good standing licensed to
practice in the State of Ohio.

Section 7. qptrottins Lw. The various provisions of this Agreement shall be

construed under, and the respective rights and obligations of the Parties shall be detennined with
reference to, the laws of the State of Ohio.

3
 CONFIDBNTIAL WSBC - 4

Section 8.ep_tipq. The captions of the several Sections of this Agreernent are for
reference purposos only, and do not constitute a part hereof. Such captions shall be ignored in
construing this A greement.

Section 9.
ounternart.. This Agreement may be exeouted in several counterparts,
each of which shall be deemed to be a duplicate original, and all of which together shall
constitute one and the same instrument" which shall be binding upon all the Parties hereto,
notwithstanding the fact that all Parties did not sigr the same counterpart, This provisiori shall
also apply to any and all amendments or modificatons to this Agreement.

Section 10. gsrp[gnce With Anplicable Law. It is expressly understod ttat the
tenns and conditions of this Agleement are subject to all applicable statutory provisions, ethical
rules, case law, and advisory opinions relating to tbe subject matter of this Agreement (the
rtApplicable Lav/), In the vent an issus arises as to the propriety of any provison or condition
of this .{greement, the Parties shall meet and amend this Agreement as necessary to ensure fill
compliance with the Applicable Law"

IN WITI\IESS ]/IIEREOF, the Parties have executed this Agreennent 10 be effective on

the date set forth above.

M. Thomas R. Rehme

Waite, Schneider, Bayless & Chesley Co

L.P.A.

fJ
By: Lktc{,
{ea"/
Its:

949-00:435 197v.2

.t
 CONF'IDENTIAL WSBC - 5

WAIVEII OT THE NOTICE OF ANNUAL

MEETING OF THE BOARD OF DIRECTORS OF
WAITE, SCHNEIDER, BAYLESS & CHESLEY CO., L,p.A.

I, the undersigned, being the only Director of Waite, Schneider, Bay less &

Chesley Co,, L.P.A., do hereby waive the notice required by law of the time and place of

holding the Annual Meeting of the Board of Dilectors of said cor oration, for the purpose

of electing offcers, and for the transaction of any and all other business pertaining to the

affairs of the corporation, which meeting I do heleby agree shall be held at 1:30 p,m. on

the 1 5tr' day of Apri l, 2013 at 1 5 13 Fourth and Vine Tower, Cincinnati, Ohio 45202, for

said purposed, and for the transaction of any other business which may come before such

meeting.

Dated this 1sfl' day of April,2}I3.

THOMAS F, REHME, PRESIDENT

 CONFIDENTIAL wsBC - 6

WAIVER OF THE NOTICE OF ANNUAL

MEETING OF THE SHAREHOLDERS OF
WATTE, SCHNEIDER, BAYLESS & CHESLEY CO,, L.P.A.

I, the undersigned, being the only voting shar eholder of Waite, Schneider, Bayless

& Chesley Co., L.P.A,, do hereby waive the notice requiled by law of the time and place

of holding of the Annual Meeting of Shareholders of said corporation, for the purpose of

electing a Board of Directors and othel business, which meeting I do hereby agree shall

be held at 1:00 p.m. on the 15tl'day of Apri1,2013 at 1513 Fourth and Vine Towe,

Cincinnati, Ohio, fol said purpose, and for the transaction of any other business which

shall com e before the meeting,

Dated this 15th day of 4pri1,2013.

Number of Sharps- Shareholder

250

,4
4.h O
THOMAS F. REHME
 EXHIBIT 2
Kentucky Order (Aug. L, 2ot4) (T q)
 ,.riii l
: , i.iii il1u i jiiiil:,
c tliM \,t {.} , \i ir".i.L, I' r.. il' l( r il T' t i c li'ti
tr {:xtNl r,l x i i'-{. iI'n' fl (} t } }d3t iii,, ii i.;i,i.:t
\yt$i(}i\ :t irt,i
C,{ Sll 'r:.}. f,}s'c}. "$(}4 36 ;:t.t.,.',i,,
\4If ,$l.F;D .4tBTl{}'1"}." *t ;r!. T}.,,4.TNT'TF'FS

V"

ST,.tI"N1L,HY lt4l. {'{SIT-,,1.{V, ef n, IiFNI]AN.FS

{tRf)H;Tr,
'l'his Cor;r t:ri-rrJttcl:r':d i hr:itritr :r tliis 'irirlter -'r Jri, 15,?.$1.4.on Piaintif's' Jvlotion for

Partial S*lamat'y JlrJg.r:en1 as t,:.l)ererrh;rl ifailT;:'i, I, fjlle;lei,,("(hes1.r:"). 'I'he lllaintifs were

reprelenteci br Fl,n, Ani"leia T'irrri. 'f"h l.ielecir.l:,,',:11: .rl'e r{rlt}tr(.,i)nt{xl 3\, I.:!rlp. Slherrl G. Sycler

and ilon, Franl. \,'. .T:trnron., J1' '.'he (1,;rur"i li,r"'j'rl lr:).,ie',\iiri'l Flainl.iflt'N4ofion, Chesley,s
Res.lo;rsr:o Plail:iJTl'' f{r:rTr,, }iavir-.r.; Tir:arri i:;rir..,,1::nrirni: !:oirr r:;run:;el, n being i1 all ways
suffi c.i,:r:Li ly {.',, i 1 a1r;i . r, i n,:l s s f 'i l ur:r :

'I'ltis Ccuri. i'ry r. \:{;:*'cir 'ii,2{\01:Ori'err.ii: $ltnir:r

iit.a.lis.lud.;e Wiiliam Vy',.ikrr, previor.rsly

grank*<1 iiu:r't'Irr,t'V jrrr.lgnir:nr: r-...irjnfl lirji;rujar"l.li Wiij'il j. r.liilijni, Shir{eV .,.a.ilen Cunl:ingham, .lr.

and 4eltoirrie Miillr.. ir" rn lll;ri*T:itil;'i:rcactr cL ll:i,;t,::ir,i:r,.,r iiui3,,;l*irns in thc:ir r.en:esentation of

injurie;i: I'ilaintilli st:f'f'ei:erJ a.s i re:liili cf ii:gr:;,;r-.inr il-r* "fi:n.i::li*r-r" ciict rlrri. The {-lour1: awarcled

damagr:s in the rimni of fi,12. rriiliit (bv {_)i'rier.*f.;\r.rgr.:st j,..0A.7) nci rulecl the Defenclants

were jr:ntly and ser'.'i:*illy Iibit: i:c, th,,.: 'firrtiffi;. 'lh,: iupr**rr Crs.i r.rl'l(er.rtrcky
atfrrmecl the
partial $ummary .ji-rd4rLrenf agai:ist {lliir-rn. .iirtril.iiigiir.i.i .t,. :dilili. iriciuding that each wls

jointly anc sevetilil,'irable Tbl'lhe:t-!rI{iilrri.:i crv-/i:ii" i}ia.ini:iii"'s llo,,,y;lsk ris

{lourto orcier summary

judgment on thr:,ir i:rczicir ol' lichciar;, *lainii; iiga61r1 {*llei;i,1,i" lhat Ci,resley be jointly anrl

1.
 s(j'irc)rall'i liabL:, pritb *llion, Cu:nn,th:llt:l i,.n(i '\'1iis: r''ti rhc rmor.rri.:j r-r$,er r:o pinin{if1s, n that

Cirerley rlisgcr:g* ali fbr:s irr: coilec;ferj jn thc r;i.,.i i;,1.rr.

'l-h.e K.:nir.ll:k-"r'
$1 4.$ccr:i.1:$rr insi.iti.'::i oJi;,:i*li u.i) i,,rocceclini-is relaing to Chesk:y,s

actions in thr: {it't,'rJ- matter in Kneiu:'!t, llct't.;jrtnr:i.li'it't,t,. {..lhr:,!.e\, f(FA File l:17g5. The T'rial

Commissionr:l r::onCi.tfecl ; hea.rii'tr: enrJ f'ourd tl;ril l.lli:s!.:,.v t;ir-1 r,inJ; lesl .illhr l8) clitj.er:enf ethics

pt:acri<:e 'f law in lenti.k,, :rnd tir ne ra..'i ll11.5l:i-{jtli(i.i}ii rn restirutiol tr: the GuarrJ case

clietlts. 'l'he ll,rlr;1 'r'f {icrr+nirl.r"r: rf .!li:riti:,,:fi., r;r;-i,i;1! i;',r: i r;;;L[ { ]rntitsi<l6er,s l,l.eport. The

and li:llawed th: lcarr:1's r(crfttTrr{:llJ,:lfir:rr tirrl (.':,esk:\_,b,(: trjrj.n:.sltq:ntii,elirhn"rerl, .l.he Supreme

Courf <Jir-l not cr"rr'{hat {.jhesl:;,,' prt,y f.ff*ituti*n. {rzytt.r:tv :lc,.ls,r,n v Lilte.:;,{e:,,,39j l.W,3d 5g4

ffiv' 2.aL:t)

Plaintif'f'; a-ril.ic thi'it ill.lt-]tr1!/.!li.r-l;nt:nT ili;,:i::r;x'i.:it(j ii,i ir) lli.eiL breach. r:f ticl.ciary
cluty

clairns ljrrough ihe dt:';rine of isrix: pre;tnicin or ,;cliiat*ial esfoplel. Issue

rreclusion would bind
Chesley tcr the f:lriai an<l le:'ai rlc::t'.:rtni;liie.rlri r::rrr; in fhc riil.liplina.;7
rr6cr:,;cliugs befbre the
Tria} Con:imissit-i:,,:t', Ih.c tlr:anl cl {-i:t'el'nors, aLlri fitr:':i,.rpl'*.rnr,f-'6urf f K.e.:r.i;t-lclc.;r regarrling the
settle;::r:,n;,f the (iu<tre{nlatter tl:at resrifr,:<j in tris iilsl.arlri:nr. lJireslrly clisagrr:es.

'fhe T'rial Co'inlnissioner

fb,und, :tnrli!v: i:';*,,,r* {ionrI iatir:c{, that Chesley violated the

f'ollowing specific.:rrivisions of {CI. 3. t.l0;

S(-:l. 3.1'3^i'5(a) lly ;u]t:*rl.ing *\t)t: lli70 inilJion ir iifor.cy's J,es, v,,hich exoeccled the

amounl e:stablished by clcnt tiitrls au.i t>'i.tl.ri.t1s i-r.'itJi ,-;c,c()]rsel, anC r.i,hich were r:therwise

unrea;oriable.

:
 $C'R. - l.1"''.5c) ilv l.:;irt't'" f-'o ll:nviil,; l.ri;.ri,'i;; ,"vitir *'i1..ritt*]:1 sif.,l-l,jnt(:nl r:fithr: outcorrre of

the n-r:lttt:1, as :j ifrc re.r;if;;ng: kr thr: t:l*:nl arlii lhi: nietlxiil cf .s cleterrnination. 'fhe
';,.';':11

contracit.rrl coriitfZr'1il,;y l*.e'r::onlr^"i<:;l br'ihrl cii,.lr-'ls w*r:it *ii.hrr',r fttt:'.1t)o at: 33 l/3a/o
:lus expeses

of up ta 3'%. .k fit'c7; contilirlil'jirc.i lt 'r n,;li,ilily cbrrleii li:r;he clients. Cltr:sley's contractual

agreernsn{ wth,:ir,;il; cc-.r*:re! r.l'it:i f.lr i11/s t r,:.i;1,;.r'11 sr-'.cr:elt;(iri sel.tlernerrt rlf the case, rvhich

shoild lare bi:,,:ii S1:,9,:ll.'t:l riii i:)r.1 rrflt i.Iit: S?li .ni!li:rr uhis he l{:r:ivccl. I-{e was paid

$7.ii5ii,0rl iu r:yc.,s:r oi'his pr,-.:r:r r,:e.

S;tR 3.1-lr) 1 5{e)(l) 1,.',r rii';i<linrr fi:r:'; ';jthillt r}nirjr r'f'r:ljerf.s.

SCR 3.130-!,,1{cXl) by kntwirrp,iy ratii;ing spr:i;if io lnir;conduct of'other lawyers.

Sf.lll 3.11i)-i,'dlg) tly rr'l:r'rlr(:l-rtinr tr;,r.,{)'r,1rii( i:iirr::r:.:; in rn.al:ing: *n f{lrcj}ate settlement

claims. Ches]i:.(' ws las,:.; r.:rJi;rLsi:i l-rlis.r;:l'ri. ,-. i-;is r,l,9rrfir1i r,vith (ialliorr, Cunninghain and

Mills an,J thei'e,f,:r* h,:rt tile rruc rir;f.ierl a'il,rr?r it,ifh:'+f,rrqjirig th* rec.uircmr:nts ot'SCR 3.130-

1.8(g)"

SCR 3, I3ii-.,-1(a) b'z rnni,:i* a I;re rr.'ierf ii:r.rl r:'i. rnaierial fac{. to tTre h.iL:r.ina.i.

$Cl 3.1,,{{i'*i.1(a) l-," tni<rt:t . als: rtle)}1*r. l:i rirt,:riel l?lci in ernnection lvith a

disciriinary nLaite :.

S{: 3"1:tJ r:i,-1ir:) {rl,:nv 5(,}l.3.11}t-11.4i:)) l},eng:r!1in;;r 6:r;r1d.1 in.olving,.lishonesty,

fraucl,,Jeceit or m isr*prese'nta.iit-rr r.

Issue preclus;it:;'t, als< kr1'1.'n as ceila-te:^.i {:r$lopp*i, "aiiiws le usc of rn earlierjudgment

by orre rrot a pa].tY r:o lire oililirual ric{iofi t.,- pt:et:i',:t,itt rr:lit,iglltir:,n ci'maers litigated in the cariier

actiott." h:{iller v. . linin. tiffic*: of't'oi.rrs,leil i,v,:cj 8'i (i;15,^ 2i l). A nol-party i' the fbnner
"Ej"

actin nay ass6::rt les judical;r, ft cl{:}se ccLsiri r: issue :reclusicn, a.gainst ir. party to the fbrmer
 aciion;rs ion,;:.c.i fire paltr, f.ajlrlf rhrn:r rr,::.-- jliri.icatr is piearit:<l ha<l a reali.rtically full ancl fir

op:orlttt:rity to pres'*.nf hjs e:asr:.,U irriotinq,k:i;:'t:'r. (':rr*rrrorv,ea-!.llt,?4 ij.W,2d 317 (Ky. 1gg7).

Adclticn.lly, llle $ripr,:me: f,)r:ltrt l:i.ls Cflrr::;se:f .,lir:ther a.dmini.o:irat\/{: a!.rx.X:ies actirrg in a

judici':r! capacit.v air etiitleti it, rltit: i:rrr'{ rr}; iuiiirata e:fhcr i;s ilrtl;nrelts o.f (t.our:. fncling that

tlrey clo. Ky. lla, A,,:;,,'rc 11. .{-{trri:: lril) lt,Vi. jll ,1i4 (l.V. llf}.

Clmsle',v's l'tila.til.tg hcfir:"tz 1!r' l'tinl C,l;:*ll'lirs;ir;rn,et v,iis lrpl.J November 5-6 anrl 12-13, ?-A0g

be:fr:i:e.llirlge R.cr:l .rl*sser a:rri r:ortirrecL f,c $i:u1:el:rber TiJ-15 ancl 2.{)-.14,2010 bet'ol.e.}udge

V/illi,tm i,. Gt'ha:r. l-lhesl.::l'r/r:,r i'(::tl'ef,,nte{i ,ni v;:itrrs ti'l:r+r bv Kenf \tr/estberry, Esq.,.James

Gary, Ilsrj,., Ft'alir. l:nlrx, lii. p-l,rrr., Sr:c,ti {_],r..a,, Lj,;,1,, Vlsrk lvilir:r. Lsq,, Sher.irl Sny,:ler, Esr. and

F{on. Su:r,'lt DIr:t1, I}tir:r'tn 1.hc hei::"i:r;g,, lire te:si:nnv of tjvr: c:rt of state u,itnesses was pro.vided

by virieo tepc;sificlis, i:nlclurJini:44 e:<llibits. [.]uriri; r;he rcreral <i1a;rs the liear:ng r^as held, a total

of 4.1 u,itness.es )-ir/r Iesfirnion:,' r:ifl:er. in rr:non *r: by cferrosilcn. witl.. fhe .Irial Commissioner
consideing 12t cjlhibits. Adritirnaii", the'i'r'ial orr,rnissrioncr allowecl time tirr fhe parlies to

subrriil b;:ir;fs a'r tilr: cr:ltrcllsiun c'l f.b,e f k:a.ri:.r;1,, 'l'lLc {laurf tlilcls Cheslr:,:arJ a relistically full

ancl fbir t:'.r:portr.rt:.i11/ flil 'J-'riiil {lonrmis:iic,ner

1-$
;ote.!e:t: hi r,'rss hc:Jcre

Cl:;:la.in ie:':-..e,n'rsi tntst f:r: l;:1; fi;r ls:suc li'tclu:;i.rs',t lrt il'crirte as a. brr to furthcr litigation:

"(1) at lea.st one pt'ty to be bouird in l-re sr:cqirir-l r:ase niusl hav: lcen a rarty in the first case; (2)
the issue l: the sr:r.;Crl:iEl r":ase ntusl lle fh.<: sattf: i:isit a:s Ilre f.irr_.X case; (3) tlrc is;,,:e rnt.st havr: been

actr'rall'r litigatetJ:, ('1i.) thr: iij,sur,:',,'r; ciuljly iirx.!rr:ij. il. ff;r.ri.;rct:rr;6rl (5) th.e clecision cl* the

issue itr thc pri0r'acilio:i musi havr: L:er:n nr,,e;siir:t,rt: the *i:'s jurlgrnet
an<l adverse to the party

to be bound." Id. or-iotitrg Yea.nrn v. L'rmnzcttu,t:t.lr i:k:tltti prtlic.y jltt. gg3 S.W.2ct 45g (y*y.

r 998).

4
 "i'!ir Ccu;"i 1'inrJti f}:es.;r el'::lclnt:r hnle l)*rlr, mel lil'h rr:ard to i}lai:t1ft'llotion in this

matt:r atC the iiniirrq: in I{!:1.4 v {-'hs.tlr:.t. fjlir::ler' ',vr..r ii },?rj:\ bcrurd b,thc, KB,A. mattr:r, 'l"he

facts at:tit t:ircr-l;::,,ri.anct.l i..:sur: irr lhe in:lfnnt \4c1icri.,;rr Lhr):.;e at itsne iri the K,EA,ruatter. 'l'he

hearirrglmidFJo.tlrrri:er5.6a:icj Il?-3,2:00a*rl .i:p,l*rntx,r I-^I:ia.ntf 20-?4,20i0,ardreviewed

by the ll:e.rd o'Ciovenrors ancl the Sr.rprenle C<ur1 of Iren{.rcky, 'I'he T'rial Cominissionerma.de

fctilal findings ari<'r !e1al (:oncr.#ilr: rr,hic?t v,',;l'",;: uf'e:'l;i: t {-liresle\/" at-rcl rvliic}r lvere afrmed

the ilrstant lVlr.t1ic,n. ''lrs f.<:tr.lal fnriing:i artd lr,:qal {{t()lltii.-)it:,: tri, qltr-'lriizJ Cornmissioner, the

Boarrj of (ior',:l:nl'i:ll:.rl lhi: Sil[l'rll'rr':4"1+r-i lil.;enr.ii;.y'r,tt::i''. i1c{]es:iilry flr l.ire orr{.come cf the

KB.u\ r:;1f eri.

'l'hs (lon:'l nds {llt,:l:t'it: zr: rl hr fi,:l f'r:1ii-rl t:''lilrTi-lrd Ir:{,,aj ccr..clusions
in the
KF],4 rritf1er" 'l-'l:t: i';,1'er;."e t"_'cli.t filli'rJ {!'-:* r., r.'r:fr:ritli l.,iCl lln agrr.:etl.rent ,Vjth GalliOn,

Currriirrghtrn a1,;i Milts, {l;.esl';::i'ri1.;rte;J ti:. irrr!. itd:-r;!l.;ll(i:! ln{i: wiil r.}rrc of th,J attorneys

teprer:.enting tf:.:' i)'{rir,r;iJ1.; in tJl: t'tt.:r"} ni1li::r. ih" i.11rri-i-.1, ls;l;t;:nr:<'i the: same ethical

respon:;ibilities ng riialli':ll, {'itnnir-;rha:n ;-'inrl I'."{ilis:, ;rlcl jl,: iurr;i rrtjcnslbilit.ie:; h, would have
 nefir.rior.l;,: sch,r:.e.: c1,tris co"cEl.ir;*1. /:L l-i-ic (i:..1.i iiilcl: iiirt lrc fli-mrine issrres of material ct

accerntin.t e.cef;s 'bes in fhe 'ir.,:rn:t:nt ti fi.4ii.i.{i21.8i. t,.i.1s1!r;.y3 rronrJr.rr:t ca.rsecl Pla-intiff} to

rci):vt: t:ttly a pcrli,i+rr cf'tjle riettlii,:l't| nrolir],i, ii:t:'y ',1,*,:e,-=ntillr.r. to.

Plaintiffi ait;c as-:l.s 1 (-lnrril io ol:L:r'rlrrf {-ll*sie},rs r:intl. and s:v'emlly liable with

Ga-llir'rn, Cunnigli*n a.nd I,[ills i:' thr': rn;:,i'i onrj i. ]i]lrrirrliffs The Srrpreme Cotlrf of

K<xttr;,1..:y rffi.l:rnr:-l .ir,r,lp.* \I/eh.r's finclln: irr iiriir rni.itci ttrll rili.!,{ion, {-unnirrg,!:am ancl Mils q,ere

joirrtly triC sev,:rtlt' Iiahle t* F'lr::tifii..'ihe i',1,r'r1i- (,t.r,,.i fi,ir:id tl.raf {allioll" Curmingham and

Mills brerche<l ai:rr:une),..client cortrac;ts arxi lhi:r,.:.iirre jr:int ancl several liability is not precluded

by KIS 4i1.itl?., 'ill.rc Sui'*rte riso li;.ri,:i t'l::r,'r. t\, {.he n:ril'rr:el in whic}.1 [iallion" (]r-lnnungham
ancl L,1[ilfs cornhinr:rJ their elT.rri.r, in t.bc,l]rlr^i]hr:ii l:r1igali,:r, ;.\1q,,i ep,:toecl in i jcint enterprie, or
joint erd'*,,'*ntu.rc, ;iri inf'ourra.l ;a;re.r::hi;r exlsliir [c'l ,; iimiei! ';nrpr:rie anil rJlrr.lli*. fbr rhich

joint. irnd- s*r,e'rill lir:ility is propi:rli, s,-qe::si:ti I'grlgr l{.lt.fi }al,.;..1;;.'..4k.bl;tt t,. Ohesl:ey.4l3 S.V/.3d

589 (lty. :2013).

'l'he SuJ:ie,:',:ili:: (l{iuT1 r--11"gr1ai tiie l.'rlrni.l;i :le::l';rt:; c,l' a (l)

.joint enler,crr.ise: an

agreerne:;.1" expl'(liii i' it-ni:lir,:rt" l1ii+iill ih:' il'lr:;rri'r:ts r:rl'lhr: fiLf;; (?) a c6igrnon putpose to be

carried oiif by lirr:: gr:or.rp; {3rt q:r.'.irinliiilil' q-'.i'-.rer.:unar'),, i;ilcie;t in thaf oilr:poge amoitg the

nteinlb{,rsr:. iltd (t1' ;ru ,,clu,'rl r;ihf 1o. ! vilir.:r-: .ti '.i',,:. dirr:i;iis: llf' le entcrpise. ,ki.. citing Aufl'v.

Ro,vertt;erg, I(y., 4l){; fi. \hi.').ci',!2. (i')7,i}. 'li.rc .:-.r;lrle Cri.

arJoptecl tl:c f.rndings f the Trial

Conrnissjoner ill liil r'. (.lhs!r:v, rnci t;ijs i'l,-ri'i j1'x1d a-i:rr,,r,: that issur: pi:ecluson bars the
fu.her litigation <:Plantifls' l:.'eii-'l-; of f!Eur-,ia"iy ri.r::,,, clainrs *t;itinst 1..-hesl<;:r.

/:
 'l*ir:is Col;"r r'l;'';,, find," titl,t nc i'ir;'."'- r:r'{"tir*l':i:rJ }tct e:ti:,its, ,lrrl as e matter of law
;1r:tritir-u,:

Cheslcy is jotnrlr.,:,nC sc.yernllr, liilbll:';1,11\ {.'t}liivrr, {r.,nrrinthi anrl h4.i}ls f>r the $42 million in

da.mnes ,?.!vr:.rri*il ti:r: Pla.inti.ffl rlg';Jn:rt {'eii1t', tl;nsislorn rln6l }4i1i..; by fhis Court's Order of

Augirst "l ,TQ{J" r.:crlr:", 1;i1.1';r:,,1 ri:t 3i ({)'ir''v'!i,(:i r(;l'?rf".q'?},ri'}r f:r: Pla.intif-'s irr tl'e uard matter

when hr: ]:t{ji'{:(i :l'r,: iris fbe.eii'iric,n cr:,uti1::f ii'ith {-}aili*n, Llunrrinltarn and ltzlills. Chesley

hor,ihe" r.vorld -tl:ilxc':ht'wr:il rr,l h;',t'; i.lii:1'.,i',;1f lht,'; fit': pr,llits. {lhersley inaintainecl a

voice in tils r*.1nnt'erial <;,:ntrol oi'the enlcrplii,r: 'ri;c {,,:i:r,i ii*ielcr* fin,:js that pursuant to K.RS

3ri2.22.0, -jhe,si'-t,',1 ;,oirril-v 3r.! sr:r,'rr:r1;.''!!i ,i-rilir:'rr Cl:i1r-it j-'hart a.nrj llilis fbr the damages

the Flairitil:..fs sui::{': :;:cl.

liFEtr.E*"{}i,{l,.['fS.-.{.:.f:{.El}3'r'i'{-}ft}"l':i.]$ 't,t'lX.} iNJG}ll} that Plrrintif's'Motion

f-or Ilarti.1 Sum,-.'0r.,' ,.iclqnr,:r.:i il; 'i:i!dl''T\'['.tif] a:r T-, Pr;:lii'.i:i'l"j.reac.lr. of Firiuciary clairns against

Stanle;, \4. Clre.',,1,"- i'.

'T IS FLfi{ }.Ff }::IR T-e"i*k {}{tF:ftfi:Ir FI,fT"}.}tilt}fif] that Star-rley M. Chesley is

jointi"l aitei sev'e.:,iy litble r,,ili: .,efniinn'ig'iirrriiirri'r i. f{iicri. Shirk:,v z\llen Cunningham, Jr.

and Meibourne ir,{ri1:i, .!r. fclr the c;tistin.r:tlnul;i iFrrorjrt ';t4:l rniliiorr orverJ to Plaintiff's.

f'F Ili t"$i:lLit)fV C{.{}PJli?.fi}B '{FJl-.1 ,,,1,}r-i'{l.':j:|'} lili',r }Jlir1i'}la1{irir frr Paftial
SUmrna..,, .iUClr:r,:lii itS _rf rJi,cr.'rit",SCtit:1:1. :S F_l,llr11 i.:i"

'.J '"f
,- .'

,''-' ,/ ii,.r i;f .li

l]T-[1[] iiris ".':---.-j-.--- .'
.'t' "').1 j,,+

..-..- -

.i'.. j." iiri.. i I l.l,\i1'.1 L" n;L

I'J{l:{ }i{F (if {.{:'?j{',' {-'{}U[LT'
co)fi'f()
ALt, A'f'l ORN Ir'/iri (r:ir i.lif-lOF-Lt

ii.. t

.-jii ,J,-,,.,r. i 1
 EXHIBIT 3
Kentucky Order (June 23,2ol5) (tT n)
 {} /*h
| :.i
00N E ctR CUtt;r911,
T c0 UR T
COMMONT#EILTII Olt KENTUC KY JUN ? 3 206
BOONA CIRCUIT COURT DII.JIJi
tlfri\
DIVISION TfI
CASE NO.05-CI-00436

NIlLDllliD ABIIOT'I', ct al. PLAIN'l'llrF'S

V.

STANLEY IU. CltnSLEY, et nl. DIIIIIINDAN'I'S

oRpll13

This matter comes bef'ore the Court on the Plaintil's Motion to'liansfer Benelcial

Interest in Property I'lcld in "frust. T'he Court having read the memorandums fled by the parties,

reviewed the fle, and being in all ways sulficiently advised, hereby fincls as fbllows:

Tliis Court enterecl.judgment against Defendant Chesley onAugust 1,2014,,tnding him

jointly ancl severally liable as a matter o1'law for the $42 million in damages previously awarded

to Plaintiffs agair,st Defenclanr's (iallion, Cunningham, antl Mills. Said Judgment wrs macle final

pursuant to Cllt 54,Q2 and Def'endant Clhesley clid not post a supersedeas bond to secure a stay of

enlbrcemerlt pendin g appeal.

As part o1'post-judgment discovery, Def'endant Chesley disclosed the Wind-[Jr

r\greernent fbr his frrmer law frm, Waite, Schneider. Bayless & Chesley" Co., [,.P.4,

("WSBC"'). The Wind-ljp Agreement provicles that Delbnclant Chesley r,vould transt'er his shares

in WSBC to Thomas F. Rehme to hold in trust f'crr the exclusive purposes of ivinding up WSI3C

fbr the bettef rt of its entployees, creditors, and Chesley. Iler the Agreentent, Mr. ITehnre is

autlrorizecl to liquiclate corporate lssets ancl distribute proccecls to creditors as recuired and the

pay out the retnaiudel to Def'endant Clhesley as long as Det-endant Chesley cloes not receive any

legal fes other thatr for services perfbrmed prior to the ellbctive date of his retirernent.

!t
:r.',f:ll,.,1T

-'1r-
O( J' ,
 ' (3

Both prior to ancl afler Detbndant Chesley was disbarred in Kentr-rcky and his retiLemet

of'his Ohio bar license. he transf'errecl more than $59 millicln clollars l'rom his
rersonal accounts

to WSBC. $I .322,000 of that mount was transf'erred on or at'ter the date ol'the Wincl-Up

Agrccnre nt,

Defbnclant Chesley still owns a beneficial interest in WSBC. Plaintifls argue that this

irterest is sr"rbject to execution f'or tlre purpose of satisfying Plainti[f's Juclgment against

Def'endant Chesley. l'o this end, PlaintilTrequests that the Court onler that Det'enclant Cfiesley's

beneficial interest in WSBC be transferred to Plaintifl-s ancl that any distributions that wc.rul<l be

nraele to I)efnclant Chesley be made to the Plaintiflb through thei counsel.

Def'endant Chesley objects, arguing that'WSBC is an Ohio legal prof'essional associrtion

frrnlecf ancl maintained uncler Chapter 1785 of the Ohio Revised Clocle ancl, theretbre, an Order

such as the Plaintif'is requesting exceecls this Court's jurisdiction. T'he Court disagrees.

'l'here is no disrute that this Court has personaljuriscliction

over Defenclant Chesley, FIe is

a paffy to the case at hand and a valid judgment has been entered against him, a.iudgment which

tlie I'laintifTs are within their rights to.seek the Coul"t's assistance to cclllect.

The law is clear that when the Jr"rclgrnent state has personaljuriscliction over the judgment

clebtcrr, that state may exercise that jurisdiction to take action on that juclgment. See Estute.r o,/'

Llngcrr ex rel. Strachnrun v. Pulesliniatr Authrtrity, 715 F'.Supt.2t1253,262-64 (D.R.l. 20i0). The

Iestatement (Second) Contlict of Laws S 55 (1971) states that, " a state has power to exercise

.iuclicialjuriscliction to order persotr. who is subject to its.juclicial jurisciictio. to clo, sr not tJo,

an act in tlie state. although the carrying out of the clecree may atfect a thing in rrother state."

Frtrthermore. K.R.S, S 426.3S4 gives the Cour"t the authority to ent'orce the surrencler of money,

2
 @ @

securities. or any other property of the defndant in the execution and enforcement of a

udgment,

I'f IS HBREBY ORDERED AND AD.IUDGED as fbllows:

1. Detbndant Chesley shall direct that his benefcial interest in the shares of WSBC be

transferred to PlaintilI's within lburteen (14) clays of the date of this Order and all

distributions pursuant to said interest are to be made to Plaintif through their counsel;

2. Deli:ndant Chesley is hereby Ordered to direct Thomas F'. Rehrne to make all
payments derived 'om Chesleyos inte rest in the shares of WSIIC payable to the

Plaintiff-s tlrrough their counsel, I-lon. Angela l;ord;

3. If for any reason, including but not limited to any action by another court in any other

jurisdiction, monetary payrnent(s) is/are made to Cheslcy f'om his interest in WSBC,

Chesley and his attorney shall imnrecliately turn over saicl paymcnt(s) to Plaintilb'

cottnsel, Angela Ford;

4. Det'endant Chesley ancl his counsel are to provide a copy of this Order to 'fhomas li.
Rehme.
nn r.
DATED this LJ __ clay ot'June,20l5.

JA R.S ND,
CIRCUTT COURT

COPIES TO: AI-L AI"I'OINYS OF RIICORI)

,r)iclrai //l!' '

LJ

I
their ackl cofqr
This day <>l
DI i'lt'iE IJ RAY
l Bl.lE cl llT^at5-
/'oi '"'l i
t) ()
 EXHIBIT 4
Kentuc Order (Sept. 25r 2ot5) (t.[ 17
 oNE CtRCU|T/D|STRtcr coljR
sEP 2 5 20t5
COMMOI\"WEALTII O[' KENTUCKY Y, CLERK
BOONE CIRCUIT COURT
DIWSIONIII
cAsE NO.0s-cr.00436

MILDRED ABBOTT, et al. PLAINTIFF'S

STANLEY M. CHESLEY, et al. DEF'ENDANTS

ORDER

This matter is before the Court on the Plaintif' Motion to Execute. The Courl,

having reviewed Ptaintiffs' Motion and Memorandum, Supplemental Memorandum, Defendant's

Opposition, Plaintiffs' Reply, the Court file, and having heard argument from counsel, and the

Court being in all ways sufficiently advised, finds as follows:

This Court entered Judgment against Defendant Chesley on August 1,z}I4,fnding him

jointly and severally liable as a matter of law for the $42 million in damages previously awarded

to Plaintiffs against Defendants Gallion, Cunningham and Mills. The Judgrnent against

Defendant Chesley was made frnal pursuant to CR 54.02,and Defendant Chesley did not post a

supersedeas bond to secure a stay of enforcement pending appeal. This Court entered an Order

on June 23,20\5on Plaintiffs'Motion to Transfer Beneficial Interest in Property Held in Trust,

which ordered Defendant Chesley to ditect that any dish{butions orpayments payable to him

through his law frrm'Waite, Schneider, Bayless & Chesley, Co., L.P.A. ("WSBC"), from his

interest in 'WSBC or pursuant to the Wind-Up Agreement winding up WSBC's business be paid

to Plaintiffs through their counsel in satisfaction of the Judgment against him. No payments have

been made to Plaintiffs pursuant to this Coutt's June 23, 20i5 Order. Additionally, this Court

has granted multiple motions to compel against Defendant Chesley and in favor of Plaintiffs

t
 (

See Order (Feb' 13, 2AIl

egarding Defendant Chesley's incomplete discovery responses.

Ordet (Mur,27,2A); Order (June 9,2015)'

plaintiffs have obtained documents showing that despite the above Orders, Defendant

requests. This includes

Chesley failed to identify fee income responsive to Plaintiffs' discovery

al, v. Rochtell Int'l Corp', Case No'

fees Defendant Chesley may receive ftom Merilyn Cook, et

and any
1:g0-cv-001gI-JLK in the united states District court for the District of colorado,
Case No. 1:04-CV
additional fees he may be entitled to from In Re Fannie Mae Securities Litig',
("Fannie Mae
-01639 in the United States Dish,ict Court for the District of Columbia

instant
Litigation',). The Court has concerns that after this issue was raised in the Plaintiffs'

Motion and after the Court conducted a Hearing on the Motion on September 8, 2015, Chesley

then supplemented hs objections and Responses on Septemb er l6,20l5to include potential

income inthe Cook matter.

Defendant Chesley claims that he no longer controls WSBC pursuant to the \Mind-Up

Agreement dated April 15,2014, Hamilton County Court of Common Pleas Judge Robert P'

Ruehlman agrees with Chesley as noted in his August26,2015 Order when he found,'oMr.

Chesley owls no shares of WSBC and has only a contingent remainder interest in the Wind-Up

TVSBC are separate and

Agreement trust holding the shares of rilSBC. Plaintiff Mr. Chesley and

independent entities." Judge Ruehlman went on to Order that WSBC and Rehme, as ttustee, are

..to disregard and not effectuate any of the Kentuc Ordets" that apply to them.

This Court is not aware what documentation was submitted to Judge Ruehlman before his

Order of August 26,2015,but the documents submitted with the instant Motion paint a different

picture of the current relationship among WSBC, Rehme, and Chesley. Those documents show

that Chesley continues to maintain control over'WStsC and to direct where money is paid. In

a
 Fonnie Maelitigation
October 2l,hedirected payment of over $16 million in fees from the
conhol of the operating
into two separate accounts. Plaintif argue that Chesley remains in
Documents show he has signed
account for WSBC, signing every check drawn on the account.
payments t his
bank documents and a tax document on behalf of WSBC and has directed

to Frost Brown
attorneys in this matter from a V/SBC account in the amounts of $164,145.88

also show that

Todd and gl42,56l.t2to Benton Benton Luedke in october 2014. Documents
tobacco litigation through the
Defendant Chesley is entitled to control the payee of fees from the

Castano Trust and in Decembe r Z}I he directed those fee payments into a WSBC account while

he had directed previous payments to personal accounts'

Chesley disagrees, arguing that Plaintiffs were incorrect in assefiing he signed

all sixty-

four of the checks they subrnitted that were drawn on WSBC's Fifth Third Bank
account.

were signed
Chesley responds that he only signed nine (14%) a1d that a majority of the checks

by Steven Homer, a CPA at'WSBC, whose signature is "easily confused'o with Chesley's "on
This
small copies of checks because both start with the letters 'sto and have a capital 'c'."

admission that Chesley signed the nine checks does not help his argument thathe and WSBC
are

separate entities.

As this Court stated in its June 23 , 20L5 Ordero it has personal j urisdiction over

Defendant Chesley and may exercise that jrnisdiction to take action on the Judgment
entered

againsthim. See Estates of Ungar exrel. Strachmonv. PalestinianAuthorty,7lsF. Supp.2d

Z51,26Z-64(D.R.I. z}fi);Rsstatement (Second) of Confliot of Laws$ 55 (1971); see also KRS S

426.384.

This Court now finds that the V/ind-Up Agreement is a sham, and thai Defendant

Chesley continues to control and dircct \MSBC. Tls Court may disregard a corporate ent

5
 I

,,( 1) domination of the corporation resulting in a loss of corpomte separateness and

when there is

corporation would sariction fraud or

(2) circumstances under which continued recognition of the
Properties, LLC,360 S'!i/'3d
promote iqiustice." Inter-Tel Technologies, Inc. v, Lnn Station
the [ind-Up Agreement or to the
152,165 rr!y.2012).Chesley is operating without regard to

wsBc's continued existence. He is exercising the right to control wsBc's

supposed purpose of

checks. The court finds he is

activities, including directing the payment of fees and signing
period, to prevent
utilizing wsBC and its existence during what is supposed to be a wind-up
The court finds he is taking
Plaintiffs, his judgment oreditors, from executing on their Judgment.
including fees from the
action to render himself insolvent while directing assets to \MSBC,

Fannie Mae Litigation and tobacco litigation, and the transfer of $59
million from his personal

ccounts to wsBC, chesley is engaging in what the supreme

court in Inter-Tel rechnologies

described as
,,'a.
intentional scheme to squirrel assets into liabil'freo corporations while

(quoting Sea-Land Services, Inc' v'

heaping liabilities upon an asset-free corporation .u' Id. at168

pepper sourceog4lF,2d5rg,524 Oifth cir. 1991)). This courtrecognizes thatit shouldnot

disregard the corporate entity lightly, but it also should not "hesitate in those cases where the

separate corporate entity''l

circurnstances a(o exeme enough to justify disregard of an allegedly

Id. tl6g.In light of the evidence submitted by Plaintif, the Court finds that the'Wind Up

Agreemet is a sham and that in real Chesley retains control over WSBC

ITISHEREBYORDEREDANDADJUDGEDasfollows:

1. The Plaintiffs Motion is GRANTED. Defendant Chesley shall immediately

transfer his ownership interest in WSBC to the Plaintiffs through their

undersigned counsel. This Court's June 23,2015 Order temains in

full effect' As

directed in that Order, De.fendant Chesley and his attomeys shall immediately
tum

4
 payments made to Defendant
ove to Plaintif,counsel any and all monetary

ChesleY from his interest in WSBC;

Trustee of the castano Trust that

2. Defendant chesley shall immediately direct the

from the castano Trust shall

all payments to which he and/or wsBc e entitled

be paid {ireotly to Plaintif' counsel; and

of Merlyn cook' et al' v

3. Defendant chesley shall advise the court in the matter

in the united states District

Rochaell Int,l corp., cas No. 1:90-cv-00181'JLK,
to which he and/or
court for the District of colorado that all payments or fees
their undersigned
v/sBc are entitled shall be paid directly to Ptainliffs ttuough

counsel.

DATED Ur{auYof SePtemb et20l5'

R. SCHRAND,
CIRCUIT COURT
COPIES TO: ALL ATTORNEYS OF RECORD

DNNNE thtii I
notco

Thls

5
 EXHIBIT 5
Dismissal of Sheriff Case (T zo
 AFTAB PUREVAL
HAMILTON COUNTY CLERK OF COURTS

COMMON PLEAS DIVISION

ELECTRONICAT,I,Y FLED
.fanuary L7 , 2OL7 11 : 51 AII
AFTAB PUREVAJ
CLerk of Courts
HamLLon CountY' oho
CONFIRIIIATION 59 02 89

STANLEY M CTIESLEY
vs. ^Ls06294
JUDGE
HAMILTON COUNTY MEGAN SHANA}IAN
STMRIFF JIM NEIL

FILING TYPE: FILING

PAGES FILED: 1

BFR2OO

ELEcTBoNtcALLY FILED 01/1712017 11:51 / ZZ1 I A 1506294 / CONFIRMATION NUMBER 590289

 COIJRT OF COMMON PLEAS
HAMILTON COUNTY, OHIO

StanleyM. Chesley Case No. A1506294

Petitioner Judge Shanahan

DTSMISSAI

Hamilton County Shctiff

JirnNeil

Respondent

The parties dismiss this csse withott prejudice.

Respectfully submitted,

/s/ Tncent E. Mtt.t.et /s/ James W.

Vincent E. Mauer (003899?) James W. Hatper
Frost Brown Todd, LLC Hamilton County Prosecutor's Office
3300 Great American Tower 230 East Ninth Street, Suite 4000
301 East Fourth Street Cincinnati, Ohio 45202
Cirrcirurati, Ohio 45202 (sr3) e46-315e
(s13) 651-6785 (sl3) 946-3018 (fax)
(513) 651-6981 (fax) j ames. [email protected]
[email protected]

C ouns el. for P etiti ot' er Couns el.f'or Respondent Hantilton. Cotmty
Stanlq ltl. Chesley SheriffJim Nel

0118087.0619701 48354896-0576v1

ELEoTRONIoALLYFILED 011171201711:sl / zzl I A 1506294 / CoNFIRMATION NUMBER590289

 EXHIBIT 6
CityBeat Article (T zo)
 Kontucky appellate court 10 Chesley:You owe $42 million 3/2s117,1oi27 AM

Kentucky appellate court to Chesley: You owe

$z million
Another court loss for the former King of Torts, who is still a wanted man in Boone
County
JAMES MCNAIR . MAR 20,2017 9 AM

The Kentucky Court of Appeals has unanimously

upheld a $Z million civiljudgment against
disbarred lawyer Stan Chesley of lndan Hill, the
latest turn of affairs in a slow-moving legal
battle that dates back to the early 2000s.

The 36-page opjni-on was handed down'March

10 and ratifred a summary judgment issued by
Boone County Circuit Judge James Schrand in
0ctober 2014. ft represents another vindication
for the lawsuit's 382 plaintiffs who were flrst
harmed by the effects of fen-phen weight-loss
pills in the 1990s, then duped by Chesley and
three other lawyers who negotiated a $200
million out-of-court legal settlement, only to
keep $Z million more than they were entitled lo.

Fen-phen was a plpulaf-dlc!-suppl-e!0cnt in the

1990s untif rhe U.S. Food & Drug Administration
ordered it off the market because of the

Stan Chesley

http://www.citybeat.orn/news/artcla/20855275/Renlucky-appolale-courl-to-chesley-you-owo-42-nrillion Page 1 of 3
 3123/17,10127 AM
' Kentucky appellal oourt lo Chesley: You owo $42 million

potential for heart and lung problems. Tens of thousands of lawsuits were filed against the
product maker, American Home Products. The suit frled in Boone County was settled in 2001.

Of the $zOO miIion settlement, however, plaintiffs received only $ze.s million, the Court
of
Appeals opinion says. The attorneys kept $t OO million and put $ZO.S million into a sham
nonprofrt that they created. The contingency fee agreement capped the lawyers'take at $60'8
million. Lexington, Ky., lawyer Ang-elalml filed suit on behalf of the plaintiffs in 20a4 to recover
the excessive money pocketed by the lawyers.
Court
Chesley, whose conduct in the case led to his 2013 disbarment by the Kentucky Supreme
Court.
and his retirement from practicing law, has the option of appealing to the state Supreme
His lawyer SrVISyrr
in the case, of Frost Brown Todd in Louisville, could not be reached for
comment Friday. Ford said she didn't think that the Supreme Court would accept the case for
review.

Although the Court of Appeals opinion says Chesley received S20.5 million and should
have -
been paid 912,8 million he was held jointly and severally liable for the full $a2 million. Ford said
-
that the amount due continues to grow.

"Because Chesley chose to fight his former clients for so many years, the interest owed is
signifcantJ, she said. "The outstanding judgment, with interest, is now over $70 million."

The 382 plaintiffs are scattered across dozens of states, including Ohio, but Kentucky has the
most, Ford said. For now, she is focusing her collection effort through the federal court in
Cincinnati, Last week, she said, she filed a motion for a parlial surnmary judgment against
Chesley.

the
Meanwhile, an outstanding warrant for Chesley's arrest remains to be served. Schrand issued
warrant in october 2015 after chesley did not appear at a show-cause hearing related to the $42
million judgment. The Boone County Sheriff's Department said that Hamilton County authorities
refused to serve the warrant. Chesley fled suit against Hamilton county Sheriff Jim Neil to block
service, and Common pleas Judge Robert Ruehlman issued a temporary injunction. Ruehlman,
though, withdrew fror.n the case without saying why. His replacement, Judge Megan shanahan,
dismissed the suit in JanuarY,

That means the 17-month-old warrant against Chesley can now be served in Hamilton County.

Pago 2 of 3
http://wwucilybeat.com/news/artlcle/20855279/kentuoky-appallale-court-to-chesley'you-owe-42-millon
Kentuoky appellate oout to Chesleyi You owe $42 million 3123117,10:27
^M

"lt leaves it where it was under any other circumstance," said James Harper, an assistant
prosecuting attorney in Hamilton Counly. "The sheriff should treat whatever warrant is served on
him (Chesley) in the normal fashion."

Hamilton County Sheriff spokesman Mike Robison said Boone County would have to fle notice
asking Hamilton County to serve the warrant. Apprised of that requirement, the Boone County
Sheriff's director of extradition, Jim Beach, rep[ied, "We have, and they wouldn't do it. I'll call them
again Monday and see."

CONTACT JAMES McNAIR: jmcnaif@citybeat,com, 5i 3-91 4-2736,.@imanews- on Twitter

rotn rHE coxuERsATtoH!

A
This site requires you to gin or register to post a comment.

Posted by thebossla dy1229 Mar 21 2017 23:38

It is only Fair to treat him s any other Criminal. He put his pants on like everybody else.
ffi Please do right and make him do the process in jail as any other criminal would let's
please put some faith back into the judicial system

http://www.ctybeat.con/news/artiole/2D855279/kentucky-appellale-court-to'chesly-you-orve-42-nrillion Page 3 of 3
 EXHIBIT 7

Sanctions Order in Domestication Action (T zz)

 j'i,ill$
*#tJ' * l: t'i:h4t"{*N I
[:r\' i'Fifd

rld. Mi:rti1i'l lr . *i"ill.l,u'

1',ii:r {.i,.i:fli4 jt'{r'rLl. l.}liilVl, lcf liCl
'i{.} j}t-l il;$ ptJlliiljrr | l'{} rlvtL-
COURT OF COMMON PLEAS lli.t-(l $tl !Jl',,r), J ::ii-i^1..i" l."il;: '{Xlf {}
:; r:;1)* ; i I Jl" irL,*.1.
HAMILTCIN COUNTY, tHI0

MILDRE A.BB0T' et 1.' Case No. LX1600448

Plnintiff/Jtrdgnent Judge Megan E. Shzurahan

Creditors, (Visiting Judge Richard A. Niehaus)
v,

STANLEY CI{ESLIY, DNCISION AND ON,ER

DefenclanJudgment
Deblor.

"lhis case is before this Coutt on Plaintiffs' tttotion f'or sanctions against Defudant,

Stmly M. Chesley (hereafter "Chesley") anc{ his counsel, Terry Serena ("Selena"), pursuant tn

R.C. $ 2323.51, and against Serena pursua:rt to Ohio Civil Rule .ll. 'fhe Court, having duly

considered the arguments raised in tlie nrotion, memoranda, and reply, ancl having heard the oral

argumenf of counsel and thc tcstinrony ptesented at the hearirg, finds that an awarcl of attorney's

fees is waranted.

R.C. $ 2323,51prevents parties fi'om using the juclicial process tc lramss one another.

Stata ex rel. ,1. Richard Gater Co,, L.P.A. v. Kessler, gT Ohio App'3cl 7&2,785,647 N.E.2d 564

(2cl Dist.l994). Uncler Ohio Rev. Code $ 2323.51(3)(1), a court may award court costs,

reasonabls attorney$' fes, and othsr resonable expenses to ny pay adversely affected by

anothsr pnrty's frivolous concluct. Moore v. City of Clevelnd, 20t)4-Ohio-360, 11 10 {8til

Dist.2004). Upon a frnding of frivolous conchtctn court may awarcl ttorney's lees against either

ap*rty, his counsel of record, or both. R'C. $ 2323.51(BXl)'

 ..frivolous corrduct" includes conduct that "obviously serves melely to
Urrder the statute,

harass or maliciously injure another pay . , . or is for another irnptoper puryose, irrcluding, but

nol Linrited to, causing unnecessary delay or a needless increas in the cost of litigation,"
or "is

extension,
not wa*a*tecl under exisring law, cannot be supported by a good faith argument for an

nodification, o reversal of existing law, or cannot be suppor{ed by a good faith argllment for the

establislunent of new law," R.C' s\ 2323,51(AX2XaXi)-(ii)'

judgment was
The Court fincls tlrat the objection to the dornestication of the Kentucky

frivolous becausc it was not supporled by the iaw, was intendecl to delay Plairitiffs from

collecting their judgrnent and causccl a needless increase in the cost of litigafion,

This case has a tortured history. The parties to this mattel have been in litigation for

over a decade, Chesley is an attorney who was permanently disbared in the state of l(entucky.

plaintiffs are formcr clients of Chesley, one of several lawyers who represented the victims of

the diet drug phen Fn ir case 05-CI-00436. In 2014, the Boone Circuit Court awarded

summary judgment to Chesley's former clients by arnending the original judgment errtry to

include Chesley arrd to hokl him joiutly and severally liable with the other lawyers. This

clecision is ou appeal before the Kentucky Appeals Court in Case 2014C4001984'

At no time. has Chesley filed a surety bond to keep the juclgment l'orn being executecl

upo'. Instead, he filed in Oio a cornplaint for declaratory judgment and restraining order against

lris l'ormer clients ancl their.attorney, Angela Fold, in case 4I500067;hc frled a case against his

judgrnent creditors in case 4160250S; he appealed a discovely orcler in a proceeding opened to

conduct discovery iu case M1501179; he requested and received a rest'aining order to

prevent

by the
the Hamillon County Sheriff from taking him into custody after beiug held in contempt

Boone Circuit Court in case 41506294. Concurently, in federal court, cleditors

are actively

2
litigating issues concerning frauclulent fiansfers which involve both Chesley and lfs former law

firnr in tlre case of McGh.r v, Rehme, Southern District of Ohio, case 1:16CV464, And in this
judgnrent-sonrething whicli
case, Chesley frled objectios to the domestication of the Kentucky

is typically a non'evnt in the corrsc of collection'

On April ZS, 2A16, the Kentucky judgrnent was filed in Harnilton County using the

procedures set o.tt in R.C, S 2329.021, et seq. On April 28, 2016, case 41602508 was filed by

Chesley to challenge the registration of this judgnrent by suing fol dsclaratory judgment and

injunctive relief. Case A1500067 rvas the subject of a motion for expedited relief for a wit of

prohibitiorr/rnffidamus before the Ohio Supreme Court against Judge Ruehlnran. The writ of

prolribitiorr was granted on June 21,2016, See, State ex rel. Iiord v. Ruehlman, Slip Opinion No-

2016-Ohio-352g. In that ruling, the court made clear its position on domestication of foreign

judgments. Neverteless, the Ohio Supreme Court's decision notwithstanding, Chesley filed his

callenge in this case which repeats many of the rguments made in other matters and addi-essed

by tlie Ohio Supreme Coutt,

Defendant's Objection in the present matter rvas to plairi{iffs' dotnestication of the

judgment omanating frorn Ahbrtt v. Chesley Case No. 5-CI-00436, Boonc County Circuit

Co*r. Defendant advanced the position that both the identity of the actual judgment creditors,

and the zunount of the judgments plaintiffs ate seeking to enforce, taking into account prior

offsets ar.ising from payments of other jointty and scverally liable parties, mrrst be disclosed at

the rhreshold of tlrc proceedings. The Boone Couuty Circuit Court, howevet, made a different

determination, which was that, under I(entucky law, a collective

judgment (i,e,, one that is

constituted of rnultiple individual judgments) need not specify the arnounts of the individual

component judgments in order to be valid.

J
 It is qetl-settled that a defendant carutot challenge the validity of the r-rndellying

judgme't upon domestioation-the court is exptessly prohibited fronr passing on the merits of the

underlying judgnrelt. Ses Mlliken v. Meyer,3l l U,S. 457,462 (1940): 'oln such case the fllll

faith and credit clause of the Constitution precludes any inquiry into the merits of the caus
of

principles on which
action, t5e logic or consistency o1'the decision, or the validity of thE legai

the j*dgment is based." Ciresley's rgumext was already made to arrd rejected by the Kentucky

courts. Ohio had no basis under any law to find otherwise, The Full Faith and Credit
Clause

requires state courts to honor forcign judgments without reexamining the merils of the clairns.

The only basis upou which a judgment rendered in one state can be challenged in
another state

judgment'
court is that the court in thq first state lacked jruisdiction to properly rencler the
(6th Cir,
Dugee v, l)uke,375 U.S. 106,. 110 (1963); see also Berke v. Northcutt,798 F,2d 468

1986). That is not the situation here.

Cliesley has attempted to litigate the sarne ssue ovel and over and over again, even after

tlre Ohio Supreme Court stated in Ford v. Ruehlmun,2016-Ohio-3529, at fl 66, "thc Ohio

Euforcemerrt of Foreign Judgments Act does not requirc judgment creditors to calculate anct

disclose their respective shares of the judgment, detail the amounts and clates on which they

recoverocl money from other sources, or disclose the alnount of money retained by their'

attorley," This notwithstanding, Chesley filed his objection in this case.

As stated bY the Ohio SuPreme Court:

Ohio as adoptecl the Unifornr Enfotcement of Foreign Judgments Act,

R.C. Z3Z1.02I et seq, The purpose of the ast is to give full faith and credit to
for.eig judgments aJ required by Article IV, Sectiqn 1 of the U,S. Constifution.
App ri. lrgur,149 Oliio App. 3d 486,2002-Ohio-4853,778 N.E.2d 59, 11 19
1itit Oist.)I fhe act sets forth flre procedure for domesticatiirg
foreign
judgmets, i.e., filing the judgment in Ohio to ensure its recognition and
enforcement.

4
 The first step in the process s to file a properly authenticated copy of the
judgrent with thelerk of any onilton pleas court, R.C. 2329'022. z\long with
ineloreign judgment, the cleditor or the creditor's attorney rnust file with the
judgnrent
clerk an ffruvit setting forth the name and last known address of the
judgment
debtor ad rhe judgnret credito. R.C, 2329.023(A). In addition, the
creditor or his ot hr afiorney rnust file a praecipe instructirrg the clerk to issue a
notice of the filing to the judgment debtor, which rrotice nrust include the name
and address of thJjudgrnent Creditor and the name nd address of the. creditor's
atrorney in Ohio, if any. R.C.2329.023(B). Finally, the law forbids execution or
other enforcernent of the foleign judgment until 30 days after the date of frling'
R.C. 232e,023(C).
state ex rel. Forct v. Ruehlnwn, slp opinion No. 201 6-Olrio-3529,\ 64, 65.

plaintif complied with th statute and the judgrnent has beeu domesticated.

judgment was
Tlre Court finds that the objection to the domestication of the foreign.

interposed for the purpose of delay and to ause a ncedless increase in the cost of litigation,

faith
Further, the objection was not waranted.under existing law, cannot be supported by a.good

for an extension, modification, or revesal of existing law, and calrnot be supported

by
argument

a good faith argtrnent for the establisirnent of new law'

For these reasotls, the Court inrposes a sanction of $10,000.00 against the Defsndant,

Stanley M. Chesley, payable to Dinsmore & Shohl LLP and Hochscheid & Associates, LLC,

withirr 30 days of the date of the errtqy of this oder. The Court imposes a sanction of $2,500.00

against Teny Selena, payable to Dinsmore & Shohl LLP ancl l{ochscheid & Assooiates, LLC,

within 30 days of the date ofthe entry of this order.

Te Court dcclines to enter any sanctions pursLlant to Ohio Civil Rule 11.

ENTRED J Niehaus

FTB OE ?O1T

5
Copies to:

Brian S. Sullivan, Esq.

bria rr. sullivan@d,ilsrnore.cqm

Christen M, Steimle, Esq.

chli sjen.s te inr I e()din.sm ole.com

Tabitha M. Hochscheid, Esq.

tnr hfa)hockschci d aw.com

Teny Serena, Esq.

tel'ty(l).sercn a lawl lc.sqnr

Nicholas. A. Zingarelli, Esq.

nick(?j)zingarel 1 i lal. com

6
 EXHIBIT 8
McGirr First Amended Complaint (ll za
 Case: l-:16-cv-00464-RHC Doc #. 93 Filed: L2lzLlt6 Page: 1, of 45 PAGEID #.2307

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

CONNIE MCGIRR
Civil Action No. r:r6-cv-464
MARYANN BAILEY
Juocn RoesRr H. CI.BI,AN
DEBBIE CARMAN-STATON

PATRICIA GAI]NCE

NORMA HALL
FIRST AMENDED COMPI.AINT

JOYCE HANLEY

ALICIA ROBERTS, Trustee for

ESTATE OF MARJORIE HULSE

LISA PEEI(

BRENDA RENTAS
on behalf of ANTHONY RENTAS

WENDY FITCH, Admin'x for

ESTATE OF SHEII. FITCH

MICHELLE SHARPE-ROBERTS

CORINA STEARNS

STBPHANIE CARTER, Admin'x for

ESTATE OF LINDATOLER

DEBORAH TURNER

BETTY JEAN WIDNER

,IOYCEA. BRO\ATN

CONNIE CENTERS

LINDA DTINAWAY
 Case: l-:16-cv-00464-RHC Doc #: 93 Filed: I2l21,lL6 Page: 2 of 45 PAGEID #'.2308

LUCILLB KREY

BILLIE JUNE ROBERTS

.AND.
SUSANADKINS

EFFIE ELIZABETHALSIP

.IUANITAALTON

CHIPALVEY, Admin. for

ESTATE OF JO ANN ALVEY

CARLq. BALDWIN

LBE BARTLBY, JR.

TERESA BAUMGARDNER

JANICE BIIR

LORI BOONB

SHARON BRO\ATN

ESTATE OF WATHALEE BRUMFIELD

c/o TRBNA BRUMFIELD obo
NATHANIAL BRUMFIELD

LESLIE BULLOCK-PENNINGTON

SHERzuE BUTLER

BUEL CANTRELL

CHARLOTTE CASON-CUSTARD

ROSEMARY CLICK

PAMELAS. CLIF-T

2
 Case: 1-:1-6-cv-00464-RHC Doc #: 93 Filed: t2l2LlL6 Page: 3 of 45 PAGEID #:2309

ALLBN COKER

TARA COLEMAN

DORIS CREECH

TRACY CURTIS

DORIS W. CHRISTOPHERSON (former,

Dabney)

MARY DAUGHTERY

JAN DEINEY

TBRESADUFF

CHARLOTTE ESTEPP

SUSAN EZELL

BEUI.AH FUGATE

BARBARA GAY

JAMES BENJAMIN GIBSON, Admin. for

ESTATB OF JESSB GIBSON

STEPHANIE GIST

DONNA GREEN

GERALDINE HALL

BARBARA HAMPTON

LEONA GAIL HANDLEY

REBBCCA HARRIS

BARBARA HELLMUELLER

3
 Case: 1:L6-cv-00464-RHC Doc #: 93 Filed: t212L1L6 Page: 4 of 45 PAGEID #:23L0

LOUISE DUVALL, Admin'x for

ESTATE OF GARY HENDRICKSON

MARCUS HIGHLEY

CHARLENB HILL

JANICE HILTON

LINDA HINKLE

BVELYN HOPKINS

SHBILA HUMPHREYS

DEBORAH JOHNSON, Admin'x for

BSTATE OF BMMA ISON

KATINA JACKSON

BETTY DAVIDSON, Aclmin'x fcrr

ESTATE OF EVELYN JACKSON

LINDA JAMBS

BRNESTINB LESLIE JOHNSTONE

GBRRYJONBS

BETTY ICUCK

JOY PERRY, Admin'x for

ESTATE OF MILTON LEWIS

ANGELA LEWIS-MULLINIX

SANDRA DEE LITTLETON

SHERRY LONG

MARYMARTIN

4
 Case: 1:16-cv-00464-RHC Doc #: 93 Filed: I2l21"lL6 Paqe: 5 of 45 PAGEID #:231"1"

BOBBIE MARTIN

LINDA MARTIN

IAVONNA MCDANIEL

SHEII/. LYNN MBBCE

WANDA MBTZGER

LINDA F. MILLER

SHANB ROMINES, ESQ.,Admin. for

ESTATE OF KATHYMIRACLB

DONNA MUDDIMAN-CORNISH

WANDA FAYE NEACB

DIANANEWLIN RIDDLE

LOWERNA PARKS

MYRTLE PARRISH

JOEANN PERI{NS-SPBNCER

STACY PERKINS

ANGEI. VAN VLYMEN, Executrix for

ESTATE OF NORMA PICKETT

TRENA PRESTON

SHARON RAINWATER

EVELYN RHODES

LEVETTA RIVERA

RENEE ROBERTS

5
 Case: 1.16-cv-00464-RHC Doc #: 93 Filed: I2l2LlL6 Page: 6 of 45 PAGEID #:2312

FETINA ROBINSON

PATRICIA N. ROBINSON

PHILLIP B. KING, JR., ESQ., Admin. for

JUSTUS SC}IAROLD ESTATE

MAXINE SEALS

CRYSTAL SEALS-GIBSON

MONICA SBXTON-NAPIER

LINDA CAUDILL, Admin'x for

BSTATB OF I-A.UREDA SHORT

LORET'IA DISHMAN (formerly Sidwell)

JAMBS WBSLEY SMITH, Admin. for

BSTATE OF SHARON SMITH

ROBERT S. STAUFFER, Executor for

ESTATE OF PAUL STAUFFER

KENNETH STEPHENS, Admin. for

BSTATE OF CONNIE STEPHBNS

LESTAIRENE STOUT

DONNA STROMOWSKY

FRED STURGILL, Admin. for

ESTATE OF CONNIB STURGILL

LISA SWIGER

SHARON TACKET:|, Executrix for

ESTATE OF ELIATACKET:I

LINDA TAYLOR

MARY TAYLOR

6
 Case, 1:l-6-cv-00464-RHC Doc#: 93 Filed: L2l2tlL6 Page: 7 o145 PAGEID #:23L3

MARGUERITE TOLER, Admin'x for

ESTATE OF ROYTOLER

JOETTATUCKER

BOBBIEWALI(ER

CHARLOT'IE BAI(ER, Admin'x for

ESTATE OF I.NE WALKER

WANDAWATKINS

CATHERINB WHITLOCK

GENEVA WILSON

DEBORA WRIGHT-MITSUI

TAMMYWRIGHT

SHBILAYATES

.AND -
ESTATE OF MILDRED ABBOT'I

RONNIE ABNEYAND CAROL BARNES,

Co-Administrators for
ESTATE OF DANNYABNEY

LISAABRAHAM

ELiZABETH ADAMS

CATHY ADAMS (F/K/A KATH

PHYLLIS ADAMS

RUBYADAMSON

CIANTHAAKERS

GEORGE W. APPLEGATE, Executor of

ESTATE OF PHYLLIS APPLEGATE

CINDYARMSTRONG- KEMP

7
 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: t2l2llI6 Page: I of 45 PAGEID #'.2314

SUSAN ARVIN

CI/.RAATKINSON

LINDA BACK

VICKYBAILEY

JAMIE BAILEY

CHARLOTTE BAIGR

MARILYN BARNES

DEBRABAYS PLYBON

LINDA BEGGS

PATRICIA BELCHBR

LEISABBLDING

BLEANOR BBRRY

MARGIE BERRY

MARGARET BINGHAM

JOHN BI.CK, Admin. of

ESTATE OF EMMA BI-A.CK

SHARON BLAIR

CAROL BOGGS

JOIB BOTKINS

KATHY BOWLING

ANGIE LYNN BO\ATMAN

VIRGINIA BRADEN

I-A.DONNA BRAME

JAMES BRANHAM

KATHY BRANHAM

RUBY BRANHAM

8
 Case: 1:l-6-cv-00464-RHC Doc #: 93 Filed: I2121'l16 Page: 9 of 45 PAGEID #:2315

NORMA BREWER

AMY MARIA GLODO, Executrix of

ESTATE OFAI,MABROCK

BRIAN RENNER, Admin. of

BSTATE OF GLENNA BROCK POWELL
RENNER

BARBARABRO\^N{

ROBERT BALENOVICH, Admin. of

BSTATE OF EDITH BRO\AA{ING

BILLIE BRUMLEY-BRADFORD

KIMBERLY BRUMMETT

TBRESA BRUNBR

PATRICIA BRYANT

MAzuLYN BURGESS, Admin'x of

ESTATE OF WARREN BURGESSS

JANICE BURTON

TINA BUSH

DONNA S. CAMPBELL

LORETTA CANADA

TONYA CARTER

WALI-A.CE CARTER

LISA CAUDILL-TRUSTY

TONY CHILDRESS

GLORIA CI.A.RI(

WILLIAM CI/.RI(

SHIRLEY COLEMAN

DEBRA COLLIER

MARGARET COLLIER

9
 Case: L:16-cv-00464-RHC Doc #: 93 Filed: 12121116 Page: L0 of 45 PAGEID #'.23L6

LINDA COLVIN

PHYLLIS COMBS

RONNIE COOK

MARK CORNN

SANDRA COTTON GILLEY

NADINE COUCH

JOSEPH COWLEY

JO ANN COX

BARBARA CRAIN

DELORIS CRISWELL

PAMELA CROWE

GINGER DAVIDSON GIBSON

ELIZABETH DAVIS

SANDRA DAVIS

MAE BIDDLE-DAWSON

KARBN DEAN

REGINA DESPAIN-KLIESSENDORFF

JUDY DILE

AL DOSER

BELVA DOTSON

TAMI EDWARDS ENGLE

AMANDA EDWARDS WOOD

MARTHA ELLIOT

SAUNDRA ERP

SARAH ESTES

10
 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: 12121,11,6 Page: LL of 45 PAGEID #:2317

MBLISSA FAYB BBAMON

JANET FENTRESS

VICKIE D. FIANNERY

BERNITA FLYNN

TARA FOSTER-GIFFORD-MCCUTCHEN

RHODA FRANKLIN

TIMOTFTY FRANKLIN

FREDA FRIZZELL

NAOMI LOIS RUSHING, Executrix of

ESTATE OF CI-A.RA FULKS

KEN GAYHEART

JONI GIBSON

GI-A.DYS GILBBRT

ROSEMARY GODBY-SIMONS

JOYCE GOFFWELLS

STEPHEN F. BAKBR, ESQ., Personal Rep.

ofESTATE OF DBBRA GOODB-CRUZ-
MIRANDA

JOYCE GORDON

TAMMIE GRANT

AMY GRAY

SHBRRY GREEN

ALLIE HALL

RHONDA HANCOCK

DEBRA HARRISON

JOY HASSLER-MILLER

YOIANDA HAT'DEN

11
 Case: 1:1-6-cv-00464-RHC Doc #: 93 Filed: 12121'116 Page: 12 of 45 PAGEID #:23L8

BARBARA HBIZER

WANDA HBLTON

VICKIE HENRY

KAREN HILI.A.RD

JACQUELINB HOCKER

MYRA HOOD

VICKY HOOD

LORA HOOVBR

CHARLENB HORN

MARY HORNING

LINDA HOSKINS

CLOYD HOSKINS

MARILYN HOWARD

DONNA MARLENE HOWSER-

NAKAGAWA

CHARLOTTB HUGHF"S

MARCIA HUGHBS-HARNESS

MARGARET MBSARIS (F/K/A HIINT)

WANDA HUNTBR

BRENDA HIJTCHCRAF-I

LORENE HUTCHERSON

KATHERINB HUTCHISON

DELLA JACIGON

MARYANN JACKSON

DBBBIE JEFFREY

GARNET JOHNSON-COLBMAN

72
 Case: 1:16-cv-00464-RHC Doc #: 93 Filed: L2121,11-6 Page: 13 of 45 PAGEID #:23L9

KATHYJONES

BEUTAH JONES

JUDYJONES

LINDAJONES

TROYJONES

BBTTYJORDAN

APRIL IGLTNER NTIXOLL

PATRICIA KENNEDY-STUTZ

GERALD KING

KATHERINE KING

PATTIE KITTS

LINDAI,RKINS

BMILY LEWIS

ANGET-A. SHACKLEFORD, Admin'x of

BSTATE OF LINDA LONG

KATHY LOVAN-DAY

CHARLOTTE LUSH

LINDA MALONE-MCGOWAN

PAUIA MANN

PAMEI-A. MARLOWE

MAI,NEI MARRO

CONNIE MASON

JONI MCCI-A,NAHAN

ROBERTA MCGUIRE

TAMMY MCGUIRE-ROBINSON

JACQUELYN MCMURTRY

13
 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: LZl2l-lI6 Page: 1,4 of 45 PAGEID #:2320

LINDA L. MILLER

DBLORES MILLER

MARIE MILLER

ROBERTA SUE MILLER, Personal Rep. of

THB ESTATE OF MICHAEL MILLBR

MICHAEL L. MILLER, Admin. of

ESTATE OF NELLIE MILLER

LBSLIE MINTON

BEVERLY MITCHELL

EUDORA MONTGOMERY

RHONDA MOORE

MARGARET MOORE

APRIL MORzuS

MARY NAPIER

ELIZABETH NBAL

LINDA NBVELS

WILMANOB

KATHYNOLAN DINSMORE

GLBNORA PACE

RECIE PENNINGTON

JEFF PERKINS

HELEN PBRKINS

DORIS PHBLPS

SONJA PICKETT

BRIAN POWELL

MARY P'POOL-HOLLAND

SUZANNE PRICE

t4
 Case: l-.1-6-cv-00464-RHC Doc #: 93 Filed: L2l23,lL6 Page: 1-5 of 45 PAGEID #:2321"

RITA PROFIT'T NORMAN

LYNNE PURSBL

BILLIE REESE

TEENA NICHOLSON/HOPE SMITH,

Co-Executrix of ESTATE
OFARLIE RHODES

MBLISSA zuLBYMEECE, Admin'x of

ESTATB OF RAYMOND RILBY

ODENA ROADEN

PATRICIAROBERTS

CAROL ROGERS

VINA ROSE

CATTry ROSE

I.RRY ROSEBERRY, JR., Admin. of

ESTATE OF I,ARRY ROSEBBRRY, SR.

MARY SAMS

KATHY SANDS

THOMAS SAPP

MARGARET BRANHAM
ESTATE OF LISA SEXTON

MARGARET SHARON

JANET SHORT-ROBERTS

P. BRIAN COUCH, Admin. of

ESTATE OFADA SIZEMORE

APRIL SI/,T'TEN-JONES

CAROLE SLONE

ELAINE SMITH

BARBARA SMITH

15
 Case: 1:l-6-cv-00464-RHC Doc #: 93 Filed: I2l2IlL6 Page: 16 of 45 PAGEID #:2322

FREDA SMITH

DARCY SNOWDEN TALBBRT

PEGGYSPEARS

CORA STAPLETON

NANCYSTEPHENS

LBLAND STBVENSON,
ESTATE OF SHARON STEVENSON

MARLENB STEWART

ESTATE OF LORETTA STIDHAM

BETTYSTONE

CRAIG SUDDI-I"TH, Trustee on behalf of

MARJORIE SUDDUTH ESTATE

MARCELI. HAYS, Personal Admin. of

BSTATE OF PRISCII-A TAFOLI-A

ESTATE OF CHARLES TAPLEY

ELI-A.TAYLOR

JEANNE THOMAS

NANCYTHOMPSON

KAREN THOMPSON-MCCIAIN

JAMES G. THURMAN

ELIZABETH TRENT

JENNIFER TRIMBLE

PATRICIA TURNER

DRUCILI-A. TURNER

VALORIE TURNER

LINDAVANCE

LIN DA VANNARSDALL-CO LLINS

t6
 Case: l-:1-6-cv-00464-RHC Doc #: 93 Filed: 1,2l2LlL6 Page: 17 of 45 PAGEID #:2323

DBBBIEVOGT SCHNEIDER

LORAINE WALLEN

CINDY WALTERS

LORRAINE PII.R GALLION, Admin'x of

ESTATE OF MARTIN WARD

ELIZABETH WASHBURN

CHERYLWATSON

JUDYWHITAKER

KIM WHITB

PATRICIAWHITE

JOYCE WHIT
TODD WILLIAMS, Executor of
ESTATE OF GLORIA WILLIAMS

BETHANY WILLINGER

MELODYWINER

CONNIE WOLFE

BILL WOMBLBS

ESTATB OF ARTIE WOODS

FERN WOOTEN

EDWINAWRIGHT

ROGER DALE WRIGHT

SANDRA WRIGHT

KAREN YOUNG- COFFIELD

KASANDRA I(AHLI ZEMAN-BALENTINE

(F lKlA SANDRA ZEMAN)

Plaintiffs,
vs.

THOMAS F. REHMB, et al.,

17
 Case: 1.1-6-cv-00464-RHC Doc#: 93 Filed: L212L11"6 Page: 18 of 45 PAGEID #:2324

Defendants.

Plaintiffs, for their First Amended Complaint against Thomas F. Rehme, Waite,

Schneider, Bayless & Chesley Co., LPA, and Stanley M. Chesley, state as follows:

THE PARTIES

1. Plaintiffs Connie McGirr, Mary Ann Bailey, Debbie Carman-Staton,

Patricia Gaunce, Norma Hall. Joyce Hanley, Alicia Roberts, Trustee For Estate Of

Marjorie Hulse, Lisa Peek, Brenda Rentas, On Behalf Of Anthony Rentas, Wendy Fitch,

Admin'x For Estate Of Sheila Fitch, Michelle Sharpe-Roberts, Corina Stearns, Deborah

Turner, Betty Jean Widner, Joyce A. Brou'n, Connie Centers, Linda Dunaway, Bilie

June Roberts (members of Group r, as defined below), - AND- Susan Adkins, Effie

Elizabeth Alsip, Juanita Alton, Chip Alvey, On Behalf Estate Of Jo Ann Alvey, Carla

Baldwin, Lee Bartley, J., Tcrcsa Baumgardner, Janice Blair, Lori Boone, Sharon Brown,

Estate Of Wathalee Brumfield c/o Trena Brumfield Obo Nathanial Brumfield, Leslie

Bullock-Pennington, Sherrie Butler, Buel Cantrell, Charlotte Cason-Custard, Rosemary

Click, Pamela S. Clift, Allen Coker, Doris Creech, Tracy Curtis, Doris W. Christopherson

(formerly, Dabney), Mary Daughtery, Jan Delaney, Teresa Duff, Charlotte Estepp, Susan

Ezell, Beulah Fugate, Barbara Gay, James Benjamin Gibson, Admin. For Estate Of Jesse

Gibson, Stephanie Gist, Donna Green, Barbara Hampton, Leona Gail Handley, Rebecca

Harris, Barbara Hellmueller, Marcus Highley, Charlene Hill, Janice Hilton, Evelyn
Hopkins, Deborah Johnson, Admin'x For Estate Of Emma Ison, Katina Jackson, Betty

Davidson, Admin'x For Estate Of Evelyn Jackson, Ernestine Leslie Johnstone, Gerry

Jones, Joy Perry, Admin'x For Estate Of Milton Lewis, Angela Lewis-Mullinix, Sandra

Dee Littleton, Sherry Long, Mary Martin, Linda Martin, Lavonna McDaniel, Sheila Lynn

rB
 Case: l-:16-cv-00464-RHC Doc #: 93 Filed. I2l21,lL6 Page: l-9 of 45 PAGEID #'.2325

Meece, Wanda Metzger, Linda F. Miller, Shane Romines, Esq., Admin. For Estate Of

Kathy Miracle, Donna Mudcliman-Cornish, Wanda Faye Neace, Louverna Parks, JoeAnn

Perkins-Spencer, Stacy Perkins, Angela Van Vlrmen, Executrix For Estate Of Norma

Pickett, Trena Preston, Sharon Rainwater, Evelyn Rhodes, Levetta Rivera, Renee

Roberts, Fetina Robinson, Patricia N. Robinson, Phillip E. King, Jr., Esq., Admin. For

Justus Scharold Estate, Crystal Seals-Gibson, Monica Sexton-Napier, Linda Caudill,

Admin'x For Estate Of Laureda Short, James Wesley Smith, Admin. For Estate of

Sharon Smith, Robert S. Stauffer, Executor For Estate Of Paul Stauffer, Kenneth

Stephens, Admin. For Estate Of Connie Stephens Donna Stromowsky, Fred Sturgill,

Admin. For Estate Of Connie Sturgill, Lisa Swiger, Sharon Tackett, Executrix Estate Of

Ella Tackett, Linda Taylor, Mary Taylor, Joetta Tucker, Bobbie Walker, Charlotte Baker,

Admin'x For Estate Of Lane Walker, Wanda Watkins, Catherine Whitlock, Geneva

Wilson, Debora Wright-Mitsui, Tammy Wright, Sheila Yates (members of Group z as

defined below), - AND - Estate of Mildred Abbott, Ronnie Abney and Carol Barnes as

Co-Administrators for The Estate of Danny Abney, Lisa Abraham, Elizabeth Adams,

Cathy Adams (flkla Kathy), Phyllis Adams, Ruby Adamson, Clantha Akers, George W.

Applegate, Executor of the Estate of Phyllis Applegate, Cindy Armstrong- I(emp, Susan

Arvin, Clara Atkinson, Linda Back, Vicky Bailey, Jamie Bailey. Charlotte Baker, Marilyn

Barnes, Debra Bays Plybon, Leisa Belding, Eeanor Berry, Margie Berry, Margaret

Bingham, John Black, Admin. of the Estate of Emma Black, Sharon Blair, Carol Boggs,

Joie Botkins, I(athy Bowling, Angie Lynn Bowman, Virginia Braden, LaDonna Brame,

James Branham, Kathy Branham, Ruby Branham, Norma Brewer, Amy Maria Glodo,

Executrix of the Estate of Alma Brock, Brian Renner, Administrator of the Estate of

Glenna Brock Powell Renner, Barbara Brown, Robert Balenovich, Administrator of the

r9
 Case. 1:1-6-cv-00464-RHC Doc #: 93 Filed: 12121,11-6 Page: 2O of 45 PAGEID #'.2326

Estate of Edith Browning, Billie Brumley-Bradford, Kimberly Brummett, Teresa Bruner,

Patricia Bryant, Marilyn Burgess, Admin'x of the Estate of Warren Burgess, Janice

Burton, Tina Bush, Donna S. Campbell, Loretta Canada, Tonya Carter, Wallace Carter,

Lisa Caudill-Trusty, Tony Childress, Gloria Clark, William Clark, Shirley Coleman,

Debra Collier, Linda Colvin, Phyltis Combs, Ronnie Cook, Nadine Couch, Joseph

Cowley, Jo Ann Cox, Barbara Crain, Deloris Criswell, Pamela Crowe, Elizabeth Davis,

Sandra Davis, Mae Biddle-Dawson, I(aren Dean, Regina DeSpain-I{iessendorf, Judy

Dile, Belva Dotson, Tami Edwards Engle, Amanda Edwards Wood, Martha Elliot,

Saundra Erp, Sarah Estes, Melissa Faye Beamon, Janet Fentress, Tara Foster-Gifford-

McCutchen. Rhoda Franklin, Freda Frizzell, Naomi Lois Rushing, Executrix of the

Estate of Clara Fulks, Ken Gayheart, Joni Gibson, Gladys Gilbert, Rosemary Godby-

Simons, Joyce Goff Wells, Joyce Gordon, Tammie Grant, Amy Gray, Sherry Green, Allie

Hall, Debra Harrison, Joy Hassler-Miller, Yolancla Haydett, Barbara Heizer, Wanda
Helton, Vickie Henry, Karen Hillard, Jacqueline Hocker, Myra Hood, Vicky Hood, Lora

Hoover, Charlene Horn, Mary Horning, Linda Hoskins, Cloyd Hoskins, Marilyn

Howard, Donna Marlene Howser-Nakagawa, Charlotte Hughes, Marcia Hughes-

Harness, Margaret Mesaris (flk/a Hunt), Wanda Hunter, Lorene Hutcherson,

Katherine Hutchison, Della Jackson, Mary Ann Jackson, Debbie Jeffrey, Garnet

Johnson-Coleman, Kathy Jones, Beulah Jones, Judy Jones, Linda Jones, Troy Jones,

Betty Jordan, Gerald I(ng, I(atherine l(ing, Pattie Itts, Linda Larkins, Emily Lewis,

Angela Shacldeford, Admin'x of the Estate of Linda Long, Kathy Lovan-Day, Charlotte

Lsh,Paula Mann, Pamela Marlowe, Maanei Marro, Connie Mason, Joni McClanahan,

Roberta McGuire, Tammy McGuire-Robinson, Jacquelyn McMurtry, Linda L. Miller,

Delores Miller, Marie Miller, Roberta Sue Miller, Personal Representative of the Estate

20
 Case: 1:16-cv-00464-RHC Doc #: 93 Filed: L2121-lL6 Page. 2t o 45 PAGEID #.2327

of Michael Miller, Michael L. Miller, Administrator of the Estate of Nellie Miller, Leslie

Minton, Beverly Mitchell, Eudora Montgomery, Rhonda Moore, Margaret Moore, April

Morris, Mary Napier, Elizabeth Neal, Linda Nevels, Wilma Noe, Kathy Nolan Dinsmore,

Glenora Pace, Recie Pennington, Jeff Perkins, Helen Perkins, Doris Phelps, Sonja

Pickett, Brian Powell, Mary P'Pool-Holland, Suzanne Price, Rita Profitt Norman, Lmne

Pursel, Billie Reese, Teena Nicholson and Hope Smith, Co-Executrix of the Estate of

Arlie Rhodes, Melissa Riley Meece, Admin'x of the Estate of Raynond Riley, Odena

Roaden, Patricia Roberts, Carol Rogers, Vina Rose, Mary Sams, Kathy Sands, Thomas

Sapp, Margaret Branhan, Administrator of the Estate of Lisa Sexton, Margaret Sharon,

Janet Short-Roberts, P. Brian Couch, Admin. of the Estate of Ada Sizemore, April

Slatten-Jones, Elaine Smith, Barbara Smith, Freda Smith, Darcy Snowden Talbert,

Peggy Spears, Cora Stapleton, Estate of Sharon Stevenson, Marlene Stewart, Estate- of

Loretta Stidham, Betty Stone, Craig Sudduth - Trustee on behalf of Marjorie Sudduth

Estate, Marcella Hays, Personal Admin. of the Esttate of Priscila Tafolla, Ella Taylor,

Nancy Thompson, Elizabeth Trent, Jennifer Trimble, Patricia Turner, Drucilla Turner,

Valorie Turner, Linda Vance, Linda Vannarsdall-Collins, Loraine Wailen, Cindy Walters,

Lorraine Pilar Gallion, Admin'x of the Estate of Martin Ward, Elizabeth Washburn, Judy

Whitaker, Kim White, Patricia White, Joyce Whitt, Todd Williams, Executor of the

Estate of Gloria Williams, Bethany Willinger, Melody Winer, Bill Wombles, Estate of

Artie Woods, Fern Wooten, Edwina Wright, Roger Dale Wright, Sandra Wright, and

Karen Young- Coffield (members of Group 3 as clefined below) are citizens of the

Commonwealth of Kentuc<y.

2. Tara Coleman (a member of Group z) is a citizen of the State of North

Carolina.

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 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: t2l2LlL6 Page. 22 of 45 PAGEID #:2328

3. Geraldine Hall, Linda James, and Bobbie Martin (members of Group z),

and Ginger Davidson Gibson, Stephen F. Baker, Esq., Administrator of the Estate of

Debra Goode-Miranda, Linda Malone-McGowan, and Carole Slone (members of Group

3) are citizens of the State of Florida.

4. Louise Duvall, Admin'x for Estate Of Gary Hendrickson (a member of

Group z) and Linda Beggs, Mark Cornn, Sandra Cotton Gilley, Larry Roseberry, Jr.,

Administrator of the Estate of Lorry Roseberry, Sr., and Connie Wolfe (members of

Group 3) are citizens of the State of Indiana.

S. Linda Hinkle (a member of Group z) and the Estate of Charles Tapley (a

member of Group 3) are citizens of the State of Louisiana.

6. Sheila Humphreys (a member of Group z) is a citizen of the State of West

Virginia.

T. Stephanie Carter, Administrator for the Eslal.e t-f Lincla Toler (a rttenrber

of Group r) and Betty Kluck, Marguerite Toler, Admin'x for Estate of Roy Toler, and

Patricia Belcher (members of Group z) and Timothy Franklin ancl April Keltner Nuxoll

(members of Group 3) are citizens of the Commonweaith of Virginia.

8. Diana Newlin Riddle, Loretta Dishman (formerly Loretta Sidwell), and

Lesta lrene Stout (members of Group z) and Rhonda Hancock (a member of Group 3)

are citizens of the State of Tennessee.

g. Myrtle Parrish (a member of Group z) and Cheryl Watson (a member of

Group 3) are citizens of the State of Georgia.

10. Maxine Seals (a member of Group z) and Al Doser, renda Hutchcraft,

and I(aren Thompson McClain (members of Group 3) are citizens of the State of Illinois.

11. Lucille Krey (a member of Group r) is a citizen of the State of Nevada.

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t2. Margaret Collier (a member of Group S) is a citizen of the State of

Massachusetts.

13. Vickie D. Flannery and Bernita Flynn (members of Group 3) are residents

ofthe State ofTexas.

L4. Patricia Kennedy-Stutz and Kasandra Kahli Zeman-Balentine (flkla

Sandra Zeman) (members of Group 3) are residents of the State of Alabama.

15. Cathy Rose is a citizen (a member of Group 3) of the state of South

Carolina.

16. Nancy Stephens (a member of Group 3) is a citizen of the State of

Oklahoma.

LT. Jeanne Thomas (a member of Group S) is a citizen of the State of

Arkansas.

18. James G. Thurman (a member of Group 3) is a cilizen of Lhe State of

Pennsylvania.

tg. Debbie Vogt Schneider (a member of Group 3) is a citizen of the State of

Mississippi.

2c. The Estates of Mildred Abbott, Artie Woods, Loretta Stidham, and Charles

Tapley atl hold judgments against Chesley. Their administrators will be substituted

upon receipt of such information.

2r. Defendant Thomas F. Rehme ("Rehme") is a citizen of the State of Ohio.

He is secretary of the law firm Waite, Schneicler, Bayless & Chesley Co., LPA, and under

a Wincl-Up Agreement with Stanley M. Chesley, he has possession of Chesley's shares of

the firm.

1r)
 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: 12l2Ll1-6 Page: 24 of 45 PAGEID #'.2330

22. Defendant Waite, Schneider, Bayless & Chesley Co., LPA ("WSBC") is a

company organized and existing under the laws of the State of Ohio. Its principal place

of business is in Cincinnati, Ohio.

2g. Defendant Stanley M. Chesley ("Chesley") is a citizen of the State of Ohio.

JURISDICTION

24. This Court has jurisdiction over this action under zB U.S.C. $ rggz(a).

25. There is complete diversity of citizenship between Plaintiffs and

Defendants because Plaintiffs are residents of different states from that of Defendants,

who reside in Ohio.

26. The amount in controversy exceeds $75,ooo for each of the first One

Hundred Twenty Four (rz4) listed Plaintiffs. These Plaintiffs include the original twenty

Plaintiffs ("Group 1") and one hundred and four additional Plaintiffs ("Group e"). Each

of these Plaintiffs hold a judgment against Chesley in excess of $75,ooo, frortt tlte Bootte

County Kentucky Circuit Court, Mildred Abbott et al. u. Stanley M. Chesley, et al., Case

No. oS-CI- oo436 (the "Abbott Action"). These Plaintiffs collectively hold approximately

ZZ% of the total judgment against Chesley. Each Plaintiffs judgment is set forth in the

attached Exhibit A. Accordingly, all Plaintiffs in Groups r and z are diverse and satisfy
the minimut amount-in-controversy requirement, and so this Court has cliversity
jurisdiction over them.

27. Two Hundred and Fifty Plaintiffs who are also judgment creditors of

Chesley from the Abbott Action are diverse from Defendants and hold judgments that

are less than g75,ooo ("Group g"). These Plaintiffs hold approximately t4.6% of the

total judgment against Chesley. Each Plaintiffs judgment is set forth in the attached

Exhibit A. The Court may exercise supplemental jurisdiction over the Plaintiffs in

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Group 3 pursuant to zB U.S.C $ rS6Z and Exxon Mobil Corp.u Allapattah Seruces,Inc.,

54S U.S. s46 (zooS).

28. Only eight of the 3Bz judgment creditors of Chesley from the Abbott

Action are not Plaintiffs here.

VENUE

29. Venue is proper in this Court pursuant to z8 U.S.C. 5 tsgt(bxt).

FACTUAL ALLEGATIONS

go. Plaintiffs are some of the plaintiffs in the Abbott Action, which is pending

before the Boone County Circuit Court in Kentucky.

91. The Abbott Action was filed in December of 2oo4. The Abbott Action
sought recovery of money from attorneys who had breached their fiduciary duties by

stealing money from their clients following a $zoo million dollar settlement.

82. Chesley was formerly a well-known attorney who specialized in class

action lawsuits. Chesley was one of the Abbott plaintiffs' attorneys.

93. Chesley was the sole shareholder, president, and sole member of the Board

of Directors of his firm, WSBC.

84. Chesley is one of the attorney defendants in the Abbott Action, along with

Shirley Cunningham, Melbourne Mills, Jr., and William Gallion. The I(entucky court

entered judgment against all defendants, except Chesley, in zoo7.

55. In zo1o, the I(entucky Bar Association began to investigate Chesley. In

2otr, the trial commissioner issued a report finding nine violations of professional

conduct and recommended that Chesley be permanently clisbarrecl from the l(entucky

Bar Association.

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 Case: 1.1-6-cv-00464-RHC Doc #: 93 Filed: 1"2121"11"6 Page: 26 of 45 PAGEID #.2332

56. On June 30, 2011, the Board of Governors of the Kentucky Bar Association

adopted the trial commissioner's report, 1B-o.

g7. On March 2r,2or3, the Kentucky Supreme Court disbarred Chesley.

The Wnd-Up Agreetnent

g8. Knowing that the Kentucky Supreme Court was likely to adopt the
Kentucky Bar Association's decision and disbar him from the practice of law in

I(entucky, Chesley knew he would no longer be able to "own" WSBC as a licensed

attorney, and decided to "transfer" his shares to another Ohio attorney.

Jg. On April 15, 2013, the day before resigning from the practice of law in

Ohio, Chesley entered into a Wind-Up Agreement. A true and accurate copy of this

Asreement is attached hereto as Exhibit B.

4c . Under the terms of that Agreement, Chesley transferred his shares to long

time friend and employee, Thomas Rehme.

4L. Under the Wind-Up Agreement, Rehme agreed to hold Chesley's zz5

shares in WSBC in trust "for the exclusive purposes of winding up the Corporation for

the benefit of its employees, creditors, and lChesley]." (emphasis added).

42. Chesley is the remainder beneficiary of WSBC's assets under the Wind-Up

Agreement.

43. However, Rehme was not, and never has been, well-equipped to carry out

the tas<s required to wind up WSBC. He was not familiar with WSBC's financial affairs,

nor was he familiar with its operations generally. Rehme was also not involved in any of

the litigation cases pencling in the office. He was not even a litigation attorney.

44. Instead, Rehme has always acted, and continues to act, at the direction of

Chesley and/or on Chesley's behalf. While the Wind-Up Agreement was an option to

z6
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wind up WSBC and pay creditors and distribute the remainder interest to Chesley, the

provisions of the Agreement were not followed and its most substantive terms were

breached by Rehme and Chesley.

45. The Wind-Up Agreement required Chesley to resign "from all positions

with the Corporation, including that of President and an employee." Under the
Agreement, Chesley had no control whatsoever over WSBC.

+6. Despite that clear provision, Chesley remained an employee, came to the

office most every day, received paychecks and distributions, used the same secretary he

had always used, had personal expenses paid from firm accounts, signed checks,

negotiated the sale of cars, signed a bank document as the Sole Member of the Board of

Directors in connection with a loan closing and signed the zor4 tax return as President

and roo% owner of WSBC.

47. Tasks requiretl undel the Wind-Up Agreement include negotiating all non-

client agreements identifying and accounting for all assets including financial accounts,

liquidating corporate assets and distributing proceeds to creditors. Rehme did few, if
any, of those things.

48. Rehme does not have the most basic knowledge of the operations of

WSBC, cannot identify the amount or whereabouts of income from cases that have

settled and has no l<nowledge of any steps taken to insure payment from cases from

which WSBC is entitled to receive future fee income. Thus, neither Rehme, nor anyone,

is working to ensure that WSBC's interests in fees from these cases are being protected.

49. Rehme has not carried out the basic tasks set forth in the Wind-Up
Agreement. Instead, Chesley remains in control.

Chesleg Retno:ns n Control

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So. Despite the existence of the Wind-Up Agreement and the purported

transfer of his shares in WSBC to Rehme, rendering Chesiey incapable of binding WSBC

in any manner, Chesley continued to control WSBC, such that the Wind-Up Agreement

was a fraudulent scheme, the primary purpose of which was to assist Chesley in avoiding

his creditors.

51. In the period leading up to the Wind-Up Agreement, Chesley transferred

gSg miliion from his personal financial accounts to WSBC, including $t,3zz,ooo after

the Agreement was signed. One court has found that Chesley is "utilizing WSBC and its

existence during what is supposed to be a wind-up period, to prevent Plaintiffs, his

judgment creditors, from executing on their Judgment."

52. In addition to the actions described in Paragraph 46, Chesley was an

authorized signatorv on WSBC's bank account at Northside Bank & Trust that was

opened in zot4. Using his signature authorization, from zor4 lo z<:16, Chesley wrole

checks to himself in amounts exceeding $z.S million.

53. Chesley also continued., with Rehme;s acquiescence, to control WSBC

assets, including approximately $5 million in vehicles. These vehicles were transferred

from WSBC to Chesley's wife for $S43,ooo and WSBC's financial statements show a loss

on the transfer of over $4 million. Years later, the vehicles were eventually transferred

bacl< to WSBC.

54. Chesley has also authorized, with Rehme's knowledge, payment of WSBC's

funds for his personal benefit. As an example only, Chesley owned Dickens & Crumpet,

LLC, whose assets included a condominium in Cincinnati, Ohio. Chesley directed that

expenses associated with the ownership of the condominium including its mortgage,

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 Case: l-:l-6-cv-00464-RHC Doc #: 93 Filed: L212L1L6 Page: 29 of 45 PAGEID #.2335

taxes and insurance be paid by WSBC. However, when the property was sold, no

amount was paid to WSBC.

Sb. Although Rehme described some of Chesley's actions as a "mistake," and

despite his knowledge of Chesley's actions, Rehme did nothing to stop Chesley. Nor did

he take any action to correct these "mistakes."

56. The fact is that Chesley has continued to control and use WSBC as he

always has, for his own benefit. And neither Rehme nor anyone else employed by WSBC

performed the tasks in the Agreement related to the identification of all assets and

Plaintiffs have not been paid as creditors.

The LInd.erlyng Abbott Actonn Kentuckg

57. On August r,2ot4, after Chesley's disbarment, the Kentucky court granted

the Abbott plaintiffs'motion for summary judgment against Chesley.

58. This judgment rendered Chesley jointly and severally liable Lo Lhe
plaintiffs of the Abbott Action for the $42 million judgment originally entered against

Chesley's co-defendants in the Abbott Action ("Kentucky Judgment"). A true and

accurate copy of the judgment is attached as Exhibit C.

Sg. Although the judgment is for one arrrount, $42 million, each plaintiff in the

Abbott Action has an indiviclual judgment, for an indiviclual amount, as reflected in

Exhibit A. As such, each plaintiff is an independent juclgment creditor of Chesley, with

the power to pursue his or her own recovery-or, to not pursue it at all. That judgment

is basecl upon the difference between what the Plaintiffs were allocated in the underlying

settlement agreement and what they were actually paid by their attorneys, after

contractual fees were paid. These amounts were disclosed in the Abbott Action record,

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were incorporated in the zooT judgment against Chesley's co-defendants, and were

similarly incorporated by the Kentuc court in awarding the judgment against Chesley.

6o. Chesley did not fite a motion to stay enforcement of the Kentucky
Judgment, nor did he post the supersedeas bond required to stay enforcement of the

Kentucky Judgment.

6t. Importantly, Chesley's transfer of his shares in WSBC pursuant to the

Wind-Up Agreement occurred a little more than one year before Plaintiffs obtained the

Kentucky Judgment.

62. At that time, there was a likelihood that Chesley would be subject to a
judgment.

65. Upon representations made by Chesley, Chesley did not have assets to

satisfy Plaintiffs' j udgments.

'the llo:rnltonCountg Actonto the Oho Suprerne Coutt

6+. After Plaintiffs obtained their judgments against Chesey, they began asset

discovery. While Plaintiffs were still investigating the extent and location of Chesley's

assets, Chesey sought to stop them.

6S. On January 6, 2oL5, Chesley filed a lawsuit in the Hamilton County Court

of Common Pleas, case no. Ar.5ooo67, against his former clients-the "Unknown

Respondents"-whom he identifies as the plaintiffs from the Abbott Action, and their

attorney, Angela Ford.

66. Plaintiffs are, thus, some of the Unknown Respondents'

62. Chesley asked the Ohio state court to enjoin any collection efforts on the

I(entucky Judgment, the domestication of the l(entucky Judgment and all asset

discovery in Ohio except as against Chesley.

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68. On January 7, 2or1 and January 14, 2015, the Ohio state court entered

temporary restraining orders which were so broad in scope that Ford, and all Ohio
attorneys, were prohibited from enforcing the Kentucky Judgment-even if they

followed Ohio law.

6g. Chesley thus sued his former clients and obtained an injunction that

prohibited his former clients from collecting on the final, enforceabe judgment they

obtained against him from a Kentucky court-even if they follow Ohio law.

70. On September 4,2or1, a Petition for Writs of Mandamus and Prohibition,

as well as a motion to stay the underlying case, was filed in the Ohio Supreme Court

requesting, among other things, a stay of the state court restraining orders.

7r. On September t7,2o1S, the Ohio Supreme Court stayed the Hamilton

County state court orders.

72. On June 2L,2tJr6, the Ohio Suprerne Courl issuet art opirtiotr classifying

Chesley's action as a "sham" and ordering the Ohio trial court to vacate its orders. The

Ohio Supreme Court recognized this lawsuit for what it was when it stated, "[d]enied

relief from the judgment by the I(entucky courts, Chesley has turned to the courts of

Ohio to thwart collection of the judgment and relitigate the case."

The Kentucky Court Executon Ord.ers

73. During the period Plaintiffs were prohibited from moving forward in Ohio,

Plaintiffs continued to move forward in l(entucky. Plaintiffs obtained two court orders

executing on Chesleys'interest in WSBC.

74. In furtherance of this goal, they first filecl a rnotion, in reliance on the
Wind-Up Agreement, to require Chesley to transfer his beneficial interest in WSBC,

rather than his ownership interest, in light of the Wind-Up Agreement.

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75. In reliance on the Wind-Up Agreement, the Court in the Abbott Action

issued an order granting Plaintiffs'motion to execute on Chesley's beneficial interest in

WSBC on June 2g, zoLS and ordered Chesley to: r) direct that his beneficial interest in
the shares of WSBC be transferred to Plaintiffs' counsel; z) direct Rehme to make all

payments derived from Chesley's interest to Plaintiffs' counsel. The order required
Chesley and his attorneys to turn over all monetary payments made to Chesley from his

interest in WSBC through other courts. The order did not order WSBC to do anything.

A copy of the order is attached as Exhibit D.

26. Counsel for Plaintiffs did not receive any funds.

77. After additional discovery, Plaintiffs filed another motion to execute on

Chesley's ownership interest in WSBC based on the Wind-Up Agreement being a sham.

28. In Kentucky, shares of a corporate entity are personal property subject to

execution by judgment creditors.

79. On September 25, 2oLS, the court in the Abbott Action issued an order

finding that the Wind-Up Agreement was a sham and that Chesley continued to control

WSBC and direct where money was paid, including fees of over $16 million, and was

doing so in a way to render himself insolvent while directing assets to WSBC, including

transferring $S9 million from personal accounts to WSBC. The Court ordered Chesley

to transfer his orr,mership interest in WSBC to the Plaintiffs' counsel and reiterated that

"Chesley and his attorneys shal immediately turn over" any and all monetary payments.

A copy of the Order is attached as Exhibit E.

8o. In its September 25, 2c1.5 order, the Court in the Abbott Action also

specifically ordered Chesley to direct the Tnrstee of the Castano Trust to pay all funds to

which he and/or WSBC are entitled directly to Plaintiffs' counsel; and to notify the Court

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in the Merilyn Cook, et al. u Rockwell Int'l Corp., case pending in the District Court in

Colorado that all payments and fees to which he and/or WSBC are entitled are to be

paid to Plaintiffs over as well.

8r. Despite this order, Plaintiffs' counsel still has not received any funds.

Rehme testified he was aware of the orders but refused to comply.

82. None of the provisions of the June 23, 2o1S or September 25,2cl5 orders

have been complied with by Chesley or his counsel.

8g. In its September 25,2or1 order, the Court in the Abbott Action also noted

the multiple motions and orders entered related to Chesley's incomplete discovery
responses, including those responses related to fee income.

8+. As a result of Chesley's failure to comply with these orders, the I(entucky

court set a show cause hearing. Chesley faiied to appear at this show cause hearing, and

the Kentucky court issued a civil arrest warrant.

8S. But Chesley managed to stop this as well.

86. On November 19, 2ot1, Chesley filed suit against the Sheriff of Hamilton

County and obtained a restraining order prohibiting any law enforcement officer from

complying with the arrest warrant unless certain prerequisites were satisfied.

82. The restraining order against law enforcement throughout the state of

Ohio remains in place. Plaintiffs are not parties to that action.

Chesleg Contnues to ControlWSBC Pag Ilbnself-While Plantftb

o,nd"
IIaue trot Receiued. any Fund"s or the Shares of WSBC Frotn Hbn
88. Despite their knowledge of the order, none of the Defendants complied or

made inquiries or disclosures to any Court.

JJ
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Bg. Rehme has admitted that he is aware of the l(entucky court's orders. He

further adrnitted that he has not complied with them, and he refuses to compy with

them. Even now, Rehme continues to disregard the orders, funneling cash to Chesley

and/or allowing Chesley to directly control the cash for himself as described above.

90. Rehme has been and remains complicit in the fiction that he is the owner

and decision-maker for WSBC. In reality, Chesley remains the real owner of WSBC, as

he continues to control it and make all critical decisions pertaining to WSBC.

gL. Although the Wind-Up Agreement was executed in zor3 for the alleged

purpose of winding up the firm, in zot6, according to Rehme, the firm is no closer to

being wound up, and Rehme, the purported trustee, can offer no explanation as to why

that is.

92. However, examination of the facts and circumstances shows why it is-
because Chesley continues to use WSBC as a way to funne all cash to himself from the

sale of assets and receipt of fee income and to avoid pa rng his judgment creditors.
Rehme and WSBC are complicit in the effort.

gB. Chesley tells WSBC's accountant how much to pay him-and he is never

denied. Chesley controls the distribution of all funds.

94. Chesley also uses WSBC to pay for his personal expenses, including his

personal legal fees. But Chesley's judgment creditors, including Plaintiffs, are not paid.

gS. Chesley also continues to receive fee income through WSBC. In one

example, in late 2or1, WSBC settled its lawsuit against Allen Davis, Case no. 1:11-cv-

ooBbr-JGC-TPK, pending in the Southern District of Ohio, which involved a dispute

over fees allegedly owed to WSBC by Mr. Davis.

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 Case: l-.16-cv-00464-RHC Doc #: 93 Filed: 1"212L1L6 Page: 35 of 45 PAGEID #.2341,

96. A portion of those funds were deposited in WSBC's bank account, and then

shortly thereafter, WSBC paid Chestey that exact same amount. Additionally, funds

from the Dauis settlement were used to pay Chesley, fund his retirement accounts and

pay for WSBC's sham litigation in the Ohio Supreme Court. Rehme had no knowledge

of the account the funds were deposited into.

gT. Between August 2or4, the date of the Kentucky Judgment and February

2016, $tg,4t6,4t9 was deposited into WSBC accounts. This amount excludes settlement

funds from the Dauis litigation and $8.4 million from Fannie Mae settlement funds paid

directly to Fifth Third Bank to pay off a loan for co-borrowers Chesley and WSBC.

Chesley disbursed gS.+ miltion to himself during this time period and paid $2.3 million

in legal fees and paid $r.g million to an LLC owned by his wife.

g8. Thus, Chesley has received and, according to Rehme, continues to receive

distributions from Rehme and/or WSBC in defiance of Lhe Kentucky court orders-even

though Rehme admits he is aware of these orders. Rehme simply refuses to comply with

them.

gg. Chesley continues to position himself in front of courts so that he can

continue to receive funds directly or funnel funds through WSBC to himself.

Chesleg's Other Tr o,nso,ctons

1oo. In addition to using WSBC as he pleases, Chesley has transferred other

assets in an attempt to hinder and delay Plaintiffs from collecting their judgments

against him.

1o1. For example, when he purchased his residence, he held it through an

entity, Agra, that he solely owned. Agra's assets were Chesley's residence and its

contents, valued at millions of dollars.

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7o2. In August zorr he transferred Agra to his spouse. In addition, Chesley

continued to pay the mortgage, taxes and insurance on the property and remained the

named insured until zor5.

1o3. Upon information and belief, Chesley has transferred other significant

assets valued at millions of dollars from his own name to others.

Wthout Court Intet'uenton, Chesleg, .ehrne, o:nd WSBC WU Contnue to

Duert ltcotne alnd Cs.sh Frotn LqudatedAssets Auay Frotn Plo:ntffs
Lo4. Defendants' past behavior demonstrates that they will continue to work
together to ensure that Plaintiffs do not collect their judgments against Chesley.

1oS. And current facts and circumstances show why this situation is critical.

ro6. Assets held by WSBC, under the purported control of Rehme, are being

dissipated.

Lo7. Firm assets have been sold, including at least one vehicle worth a

significant amount of money that was recently auctioned and actions have been taken to

auction many others. Although this vehicle was titled in WSBC's name at the time of the

auction, according to Rehme, it was originally titled in Chesley's name. And Chesley

controlled all aspects of the auction.

LoB. Fee income due to Chesley and/or WSBC has recently been paicl into

WSBC and undoubtedly paid to Chesley.

1o9. Several matters have been identified as potential sources of income to

WSBC and/or Chesley, and recent testimony has revealed that no one, especially not

Rehme, is making sure that WSBC's interests are protected.

11o. Without judiciat intervention, nothing will prevent Chesley, Rehme,

and/or WSBC from continuing to transfer money between them, and out of the firm, in

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direct violation of the Kentucky court's orders and preventing Plaintiffs from enforcing

their judgment as the Full Faith and Credit Clause of the United States Constitution

allows.

Count I (against all Defendantsl

Fraudulent Transfer under R.C. rgg6.o
111. All prior allegations are hereby incorporated herein as if fully re-written.

LL2. Chesley has transferred assets out of his name and into others, including

but not limited to WSBC. For exampe, Chesley has transferred his shares in WSBC to

Rehme, his interest in Agra to his spouse, profit from Dickens & Crumpet to himself

despite expenses being paid byWSBC, and cash into WSBC.

113. These transfers constitute a fraudulent transfer uncler R.C. 1336.o4.

rr4. Rehme and/or WSBC have also transferred assets out of WSBC.

11S. Indeed, Chesley, Rehme, and WSBC have engaged in repeated transfers

into and out of WSBC, and to others, all of which constitute fraudulent transfers under

R.C. r336.o4.

rt6. Chesley transferred his shares to Rehme pursuant to the Wind-Up

Agreement in zor3. Plaintiffs obtained their judgments, in August zor4-within a

reasonable time following the transfer, but in any event, less than four years.

r7T. Similarly, the transfers of Chesley, Rehme, and WSBC all occurred within

a reasonable time of when Plaintiffs obtained their judgments.

rr8. Chesley, Rehme, and WSBC made these transfers with actual intent to

hinder, delay, or defraud his creditors. Indeed, a l(entucky Court has already found

Chesley's behavior to be with the intent to defraud his creditors. (See Exhibit E).

7rg. Rehme and WSBC received a copy of the orders.

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r2o. Chesley, Rehme, and WSBC received no consideration in exchange for the
other transfers made-or at a minimum, they have received less than the equivalent

value ofthe assets transferred.

L2t. At the time Chesley transferred his shares to Rehme pursuant to the Wind-

Up Agreement, and at the time of the other transfers, he did not have sufficient assets to

pay his debts. From 2orr-zol4 the year Chesley transferred his shares, Chesley's assets

decreased from $88 million to $rz million. This $rz million is insufficient to pay the

Kentucky Judgment, which Chesiey reasonably should have known was coming in light

of the liabitity judgment against his co-counsel in 2oo7, Kentucky bar proceedings and

the findings by the Kentucky Supreme Court.

L22. Similarly, WSBC does not have sufficient assets to pay Plaintiffs'
judgments.

t2g. At the time of the Wincl-Up Agreernenl, and Lhe olher Lransfers, Chesley

was embroiled in the Abbott Action-and had been since 2oo4.

r24. Based on the decision of the Kentucky Supreme Court in his disbarment

proceedings, he should have reasonably believed he would incur debt, in the form of a

civil judgment, beyond his ability to pay it as it came due.

725. Chesley continues to retain control over his ownership of WSBC, by virtue

of his relationship with Rehme. And Rehme continues to permit Chesley to control
WSBC.

tz6. Since Plaintiffs have received their judgments, Chesley has continued to

transfer money and other assets to Rehme and/or WSBC. And Rehme and/or WSBC has

continued to fraudulently transfer funds to Chesley in direct violation of the l(entucky

court's orders.

38
 Case: 1:16-cv-00464-RHC Doc #: 93 Filed: 1212Ll16 Page: 39 of 45 PAGEID #.2345

r2T. These transfers in and out of WSBC by Rehme and/or WSBC constitute
fraudulent transfers under R.C. 1336.o4 because, in addition to the information set forth

above, pursuant to the valid Kentucky court's orders, the assets of WSBC were subject to

execution orders and collection by Plaintiffs.

128. Rehme and WSBC had knowledge of the I(entucky Judgment and the

execution orders requiring the transfer of income and ownership of WSBC to Plaintiffs

and are therefore complicit in the ongoing fraudulent transfer of assets to Chesley.

Count II (against Chesley

Fraud
L2g. All prior allegations are hereby incorporated herein as if fully re-written.

13o. Through Chesley's execution of the Wind-Up Agreement, he represented

to the world that he no longer controlled WSBC, and instead that Rehme controlled
WSBC.

131. This representation was knowingly false, as he continued to control WSBC

by signing checks to third parties, purportedly binding WSBC, by signing checks to

himself by signing checks to pay for his personal expenses, and by signing a tax return

as sole owner, by signing WSBC corporate documents, including but not limited to

corporate resolutions, and submitting them to a financial institution.

rB2. Chesley has hidden behind the Wind-Up Agreement, arguing to other
courts that he has no control over WSBC that WSBC's assets are not his and that he has

no control over them. This representation is material, false ancl intencled to hinder and

delay the enforcement of Plaintiffs' judgments. Chesley made this representation-that

he and WSBC were separate and distinct-while continuing to use and control WSBC,

39
 Case: 1:l-6-cv-00464-RHC Doc #, 93 Filed: 1212111,6 Page, 40 of 45 PAGEID #:2346

with the intent to mislead Plaintiffs and other courts and to hinder and delay Plaintiffs'

collection of their judgments against him and his interest in WSBC.

133. Plaintiffs, as strangers to the details of Chesley's use of WSBC, were

justified in relying on his representations, and they did rely on his representations.

tB4. Plaintiffs have been injured by Chesley's misrepresentation, as Plaintiffs

have been precluded from collecting their judgments from WSBC's assets. Moreover,

WSBC's assets have been used or transferred, thus diminishing the pool from which

Plaintiffs can collect their judgments, all because Chesley represented that WSBC was

distinct and that he had no control over it and because he has failed to comply with valid

court orders.

Count III (against Rehme

Fraud
135. All prior allegations are hereby incorporated herein as if fully re-written.

Lg6. Through Rehme's execution of the Wind-Up Agreement, he represented to

the world that WSBC was no longer controlled by Chesley and was instead controlled by

him.

rg7. This representation was knowingly false, as he continuecl to allow Chesley

to control WSBC by allowing Chesley to sign checks to third parties, purportedly binding

WSBC, by allowing Chesley to sign checks to pay himself, by pafotg Chesley any amount

requested by him, by allowing Chesley to sign checks to pay for his personal expenses,

by paying Chesley's personal expenses out of WSBC funds, and by permitting Chesley to

sign WSBC corporate documents, including but not limited to corporate resolutions, and

allowing them to be submitted to financial institutions.

4o
 Case: 1:l-6-cv-00464-RHC Doc #: 93 Filed: I2l2tl1-6 Page: 41, of 45 PAGEID #'.2347

138. Rehme has tal<en the position, to the public, to Plaintiffs, and even to other

courts as it suits Chesley's interest, that WSBC and Chesley are distinct and that Chesley

has no control over WSBC or its assets, nor are any of them his. He has further refused

to comply with Kentucky court orders by relying on the purported separation provided

by the Wind-Up Agreement, all the while knowing such representations were false

because Chesley continued to control WSBC.

139. This representation is material, as Plaintiffs have been precluded from

collecting against Chesley's interest and ownership of WSBC and its assets to satisfy the

Kentucky Judgment.

r4o. Rehme's representations and conduct were intended to mislead Plaintiffs

into relying on it and to hinder their collection of their judgments against Chesley.

r4r. Plaintiffs have been injured by Rehme's representations and conduct, as

Plaintiffs have been precluded from collecting their judgments from WSBC's assets or

funds and assets under WSBC's control. Moreover, WSBC's assets have been used or

transferred, thus diminishing the pool from which Plaintiffs can collect their judgments,

all because of Rehme's representations that WSBC was distinct from Chesley and his

disregard ofvalid court orders.

Count fV (against all Defendants)

Civil Conspiracy
r42. All prior allegations are hereby incorporated herein as if fully re-written.

r4g. Chesley, Rehme, ancl WSBC participated in a malicious combination

resulting in the commission of a wrongful and unlawful act which caused actual damage

to Plaintiffs.

4t
 Case: 1-:16-cv-00464-RHC Doc #: 93 Filed: L2121,11,6 Page: 42 of 45 PAGEID #'.2348

144. Specifically, they engaged in a fraudulent scheme to hide or divert

Chesley's assets and to hinder, delay and bar Plaintiffs' collection of their judgments in

the state of Ohio.

t4S. Chesley, Rehme, and WSBC had a common understanding to move and

hide assets and engage in a pattern of wrongful behavior, including the defiance of court

orders, so that Chesley's judgment creditors, including Plaintiffs, could not collect their

judgments against him.

146. As a result, Plaintiffs have been damaged because they have been
precluded from collecting their judgments.

Count V
The Wind-Up Asreernent is a Sharn and Should be Set Aside, WSBC's
Conrorate Form Should B

L47. All prior allegations are hereby incorporated herein as if fully re-written.

148. Chesley has exercised and continues to exercise control over WSBC so

completely that WSBC had no separate existence or interest of its own. The interests of

WSBC, Rehme as the purported trustee of Chesley's interest in WSBC, and Chesley are

fundamentally indistin guishable.

r4g. The provisions of the Wind-Up Agreement were breached by the

signatories to the Agreement, Chesley and Rehme.

1So. Chesley continues to exercise control over WSBC, rendering the Wind-Up

Agreement a sham and WSBC his alter ego. Chesley uses WSBC to hicle or clivert his

assets, while also using WSBC to funnel cash to him and to pay his own personal
expenses, so as to prevent Plaintiffs from collecting the Kentucky Judgment from
Chesley-as they are legally permitted to do.

42
 Case: 1:16-cv-00464-RHC Doc #. 93 Filed: 12121-11,6 Page: 43 of 45 PAGEID #'.2349

1S1. Rehme enables Chesley to continue to control WSBC and ignores

Kentucky orders of which he has knowledge.

rS2. This Court should uphold the Kentucky and Ohio orders and find that the

Wind-Up Agreement was a sham and order Chesley's interest in WSBC transferred to

Plaintiffs as personal property subject to the execution orders in Kentucky.

1Sg. This Court should also uphold the Kentucky court orders requiring the

transfer of and income from that interest to the Plaintiffs' counsel in partial satisfaction

of their judgments.

rS4. These factual findings are res judicata.

15S. Accordingly, this Court should enter an order honoring the l(entucky
court's order and finding that the Wind-Up Agreement was a sham and WSBC is the

alter ego of Chesley.

WHEREFORE, Plaintiffs demand the following relief:

1. An order finding the Wind-Up Agreement is a sham transaction and upholding

the transfer of Chesley's ownership interest in WSBC to Plaintiffs and the transfer

of all income from that ownership to Plaintiffs' counsel;

2. An order finding that WSBC is an alter ego of Chesley as their interest are

inclistinguishable;

3. An order requiring Chesley to immediately transfer all funds he received directly

or indirectly from WSBC since June 23,2or1 to Plaintiffs' counsel as required by

the Kentucky orders;

4. A finding that Chesley, Rehme, and WSBC have fraudulently transferred assets,

engaged in a civil conspiracy, and that Chesley and Rehme engaged in fraud;

43
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S. An order pursuant to R.C. r336.o7(AXSXa) enjoining Defendants from further

distributing any funds or assets of Chesley owed to or held by WSBC and assets of

WSBC to anyone other than Plaintiffs' counsel until Plaintiffs' judgments have
been satisfied;

6. An Order requiring Thomas Rehme to immediately transfer all shares of WSBC to

the Plaintiffs or to the Court to hold in constructive trust for Plaintiffs'benefit;

7. An Order requiring an accounting of all funds and assets transferred into or out
of WSBC since August 1, 2o1o and all funds due WSBC or Chesley since that time

that were not initially transferred to WSBC or Chesley.

8. Imposition of a receiver or trustee to replace Rehme as trustee of WSBC and an

order prohibiting the payment of any expenses without court approval with the

exception ofbasic office expenses; and

g. Such other relief,legal and/or equitable, as this Court deems appropriate.

44
 Case: 1:l-6-cv-00464-RHC Doc #: 93 Filed. L2121-lL6 Page: 45 af 45 PAGEID #.235I

Respectfully submitted,

lsl Br,nS. SUIIuan

Brian S. Sullivan, Esq. (oo4oztg)
Christen M. Steimle, Esq. (oo86592)
Drxsnrnp & SHoul rlp
2SS E. Fifth Street, Suite rgoo
Cincinnati, Ohio 45202
Phone: (g13) 977-Bzoo
Fax: (Stg) gZZ-8t+t
Email: [email protected]
christen.steimle @ dinsmore. com
and

Angela M. Ford admittedpro hac uce

Chevy Chase Plaza
836 Euclid Avenue, Suite 3rr
Lexington, I(entucky 4o;o2
Phone: BSgz68zgz7
Email : [email protected]
Attornegsfor Plo:ntffi

CERTIFICATB OF SERVICE
I hereby certify that a copy of the foregoing FIRST AMENDED COMPLAINT
has been duly served upon All Counsel of Record by the Court's CM/ECF Electronic

Filing System this zr day of December, 2o16.

/s/ Bra.nS. Sulluan

1oS63165v3

45
 EXHIBIT 9
McGirr Motion for Partial Summary Judgment (U z6)
 Case: 1-:L6-cv-00464-RHC Doc #: 99 Filed: O3lI3lL7 Page: 1 of 38 PAGEID #:2734

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DfVISION

CONNIE MCGIRR, et al., Civil Action No. tL6-cv-464

Plaintiffs, : Judge Robert Cleland

VS

PI-AINTIFFS' MOTION FOR

THOMAS F. REHME, et al.,
PARTIAL SUMMARY JUDGMENT
AGAINST DEFENDANTS
Defendants.

Pursuant to Federal Rule of Civil Procedure 56, Plaintiffs Connie McGirr, ef a/.

(collectively "Plaintiffs"), move for partial summary judgment against Defendants on

their fraudulent conveyance claims. Specifically, there is no genuine issue of material fact

that Chesley's transfer of his firm, Waite Schneider Bayless & Chesley Co., L.P.A.

("WSBC") to Thomas Rehme ("Rehme") pursuant to the Wind-Up Agreement and

Rehme's subsequent transfers of WSBC constitute fraudulent transfers. In addition, there

is no genuine issue of material fact that Chesley and Rehme conspired to engage in the

fraudulent transfer of assets to allow Chesley to keep them out of the reach of his
judgment creditors. Finally, there is no genuine issue of material fact that WSBC is

Chesley's alter ego and has been operated as such in connection with Chesley and Rehme's

fraudulent transfers. Chesley and WSBC are the same entity under Ohio law.

Therefore, Plaintiffs request that the Court order Defendants and their agents,

assignees and related entities to deliver the shares of WSBC and ail of its assets, including

fee income and funds frorn the sale of assets, to the Plaintiffs'counsel or, in the alternative

to a Receiver appointed by this Court. In addition, Plaintiffs request that the Defendants

be ordered to turn over all funds received in connection with their fraudulent transfers
 Case: 1:l-6-cv-00464-RHC Doc #: 99 Filed: O3lL3lL7 Page: 2 of 38 PAGEID #:2735

whether received directly or through an agent, assignee, attorney or related entity or

financial account, since the date of the Wind-Up Agreement. Additionally, Plaintiffs

request that the Court specifically find that Thomas Rehme's transfer of WSBC to Trustee,

Inc. and subsequent assignment of WSBC to Eric Goering are fraudulent transfers and

are void. Further, the Court should order Thomas Rehme to direct his assignee, Eric

Goering, and their agents and attorneys to immediately turn over all assets, funds and

records. Finally, Plaintiffs request that the Court grant Plaintiffs a continuing

garnishment on all funds and a lien on all assets of WSBC and enjoin Defendants and

their agents, attorneys and assignees from further dissipating any assets.

This motion is supported by the attached memorandum in support.

Respectfully submitted,

Brian S. Sullivan, Esq. (oo4.oztg)

Christen M. Steimle, Esq. (oo86Sgz)
Dnvsvonn &Snoul np
2SS E. Fifth Street, Suite rgoo
Cincinnati, Ohio 452c2
Phone: (Stg) gZZ-8zoo
Fax: (StS) gZZ-9t+t
Email : bria n,s_rlliya.n-@ dlnsaarsssn
chrisr.sL-imle@dm"s:narc*""0m

/s/ AnoelaM.
Angela M. Ford admittedpro hac uice
Chevy Chase Plaza
836 Euclid Avenue, Suite 3rr
Lexington, Kentuc 40 So2
Phone: (BSg) z68-2923
Em ail : lst t'or:d-,lr*d.51ffi nl n I

Att orneg s for Plo,ntffs

2
 Case: 1:16-cv-00464-RHC Doc #: 99 Filed: O3lI3lL7 Page: 3 of 38 PAGEID #:2736

TABLE OF CONTENTS AND AUTHORITIES

MEMORANDUM IN SUPPORT......... ...6-s8

I. SUMMARY OF THE ARGUMENT 6-7

il. MATERIAL FACTS NOT IN DISPUTE 7'25

A. The Kentuc Judgment and Orders and Chesley's

knowledge that judgment would likely be entered
against him. .................8

Abbott u. Chesley, 4r3 S.W.3d S8g (Ky. zorS) I

Kentucky Bar Ass'nu. Chesley, 393 S.W.3d S8+ (Ky. zorg)........ 8

Kentucky Bar Ass'nu. Bamberger, SS4 S.W.gd SZ6 (Ky. zorr).. 8

Kentucky BarAss'nu. Helmers,3S3 S.W.Sd Sgg (Ky.zorr).......................8

Kentucky BarAss'nu. MlIs, gr8 S.W.gd 8g (Ky.zoro) .............8

Cunninghamu. Kentucky Bar Ass'n,266 S.W.3d 8o8 (Ky. zooS) 8

GaIIion u. Kentucky Bar Ass'n, 266 S.W.3d Boz (Ky. zooS)....................... B

Chesley u. Abbott, Case No. zot4-C-oor7z5-MR , 2or7 WL g+SgZg

(Ky. Ct. App. Mar. to, zotT).. .....................9

B. Chesley's execution of the Wind-Up Agreement to

continue WSBC's existence and his control of it. ..................9

C. The Kentuc Execution Orders

D. Chesley continues to control and use WSBC, ignoring

any form of legal separation. .......... ....... 13

E. As Chesley used WSBC's money as his own, without

objection from Rehme, he was also ridding himself of
assets. ....,..,.,.17

Chesley Asset Trnsfers n zott. ............ 18

F. The diversion of fee income due WSBC or Chesley

:::::::1:: ::":t::: :::::tT::l:T ::::::::3:::: le

3
 Case. l-:16-cv-00464-RHC Doc #. 99 Filed: O3l13lL7 Page. 4 of 38 PAGEID #:2737

The Dauis Case....... L9

The Castono Trust .20

Duke Energy 22

The Rocky Flats Litigation.. 22

G. Rehme's Transfers of WSBC Ownership and Probate

Action. 24

ilI LA\A AND 4N4LYSIS............ ... 25-37

Matsushta EIec. Indus. Co. u. Zenith Radio Corp.,475U.S. 574

(rs86) 25

Ander son u. Lib erty Lobby, Inc., 477 U .5. z4z (t9 8 6) 25

United States u. Toler,666F. Supp. zdBTz (S.D. Ohio zoog)..................25

St. Francis Health Care Centre u. Shalala, zo5 F.gd gSZ 6tl' Cir.
zooo) .....25

A. Defendants have fraudulently transferred assets to

prevent Plaintiffs from collecting on their judgment
against Chesley. ....,..,.26

Ohio Rev. Code $ 936.o4 ........26-27

Blood u. Nofzinger, Sg4 N.E.zd SS8 (Ohio Ct. App. zoo5) .......26-27

United States u. Toler, 666 F . Supp. zd B7z (S.D. Ohio zoo g) .26-27

Aristocrat Laketuood Nursing Home u. Mayne,7z9 N.E.zd

Z68 (Ohio Ct. App. 1999) z6

Ohio Rev. Code $ 1336.o7 z8

1. Transfer of WSBC ............ z8

Ohio Rev. Code $ tgg6.o4 ...............p4ssim

Ohio Rev. Code 5 1336.or .......29

, Transfer of Castano Trust pa,nnents .......................... 3 2

4
Case: 1:16-cv-00464-RHC Doc #: 99 Filed: O3lt3lL7 Page: 5 of 38 PAGEID #:2738

Ohio Rev. Code $ q36.o4 ...passim

Ohio Rev. Code $ 1336.01 oa

B. WSBC is the alter ego of Chesley because the Wind-Up

Agreement is a sham used to allow Chesley to prevent
Plaintiffs from collecting the Kentucliry Judgment. ............34
In re Fisher, 296 Fed. Appx . 494 (6rh Cir. zooS) ......34-35

United Stafes u. Toler,666F. Supp. zdBTz (S.D. Ohio zoog) .94-35

Taylor Steel, Inc. u. Keeton, 4r7 F 3d S98 (6th Cir. zoos) .............. 35

C. Defendants Chesley and Rehme conspired to hinder,

delay and prevent Plaintiffs from collecting on their
judgment against Chesley. ....... g6

Williams u. Aetna Fin. Co.,7oo N.E.zd BSg (Ohio 1998) .................... g6

Maxey u. State Fann Fre & Cas. Co.,68g F. Supp. zd g+6 (S.D.
Ohio zoro)......... S6

Aetna Cas. & Sur. Co. u. Leahey Constr. Co., zrg F.3d 5r9 16tl Cir.
2oo())........ ,,,,,,.,.37

CONCLUSION .......87-98

5
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MEMORANDUM IN SUPPORT

I. SUMMARY OF THE ARGUMENT

The material facts supporting this Motion for Summary Judgment on Plaintiffs'

fraudulent transfer claims are not disputed. Defendants Chesley, WSBC and Rehme have

engaged in conduct clearly designed to delay, hinder, and defraud Chesley's creditors
from collecting their judgment. Chesley created a Wind-Up Agreement that purported to

wind up WSBC's affairs, but he utilized it as a device to create the appearance of legal

separation between him and WSBC while he remained in full control of WSBC and
retained the benefits associated with being the sole owner. He did this by choosing his

long-time friend, Rehme, as trustee of WSBC-knowing that Rehme would continue to do

Chesley's bidding.

, And that is exactly what happened. After the Wind-Up Agreement was executed,

nothing of substance changed at WSBC. For almost four years, Chesley has continued to

exercise control over WSBC and money flowing through it, using it as his own personal

piggy bank. WSBC has continued to pay him or make payments on his behalf as he

requested. During this time and for the last twelve years, Plaintiffs have been seeking to

recover money Chesley and his co-counsel in the Fen-Phen litigation took from them.

They continue to wait for their money-even after obtaining a civil judgment against

Chesley in Kentucky more than two years ago, simply because Chesley and Rehme refuse

to cornpiy with the I(entucky court's orders.

The transfer of WSBC by Chesley to Rehme and Rehme's more recent transfers of

WSBC are frauduent transfers in violation of Ohio's Uniform Fraudulent Transfer Act.

Rehme allowed Chesley to continue collecting and transferring money, yet keep it out of

reach of his judgment creditors. Chesley's transfer of the right to receive payments from

6
 Case: l-:l-6-cv-00464-RHC Doc #: 99 Filed: O3lt3lL7 Page: 7 of 38 PAGEID #:2740

the Castano Trust was also a fraudulent transfer, specifically made for the purpose of

preventing Plaintiffs from collecting on their judgment. The undisputed proof makes

clear that WSBC is Chesley's alter ego and they should be treated as the same entity under

Ohio law. Additionally, Chesley and Rehme conspired to engage in these fraudulent
transfers. This Court should put a stop to all of it by entering partial summary judgment

for Plaintiffs and award the shares of WSBC to them and all assets and income due to

WSBC or Chesley, including from the sale of assets. In addition, this Court should order

Defendants to pay over all funds received directly or indirectly in connection with the

fraudulent transfers. Further, this Court should specifically find that Rehme's transfer of

WSBC to Trustee, Inc. and subsequent assignment of WSBC to Eric Goering are
fraudulent transfers and are void. Additionally, the Court should order Thomas Rehme

to direct his assignee, Eric Goering, and their agents and attorneys to immediately turn

over all WSBC funds and assets. Plaintiffs request that they be granted a continuing

garnishment on all funds and a lien on all assets of WSBC and request that the Court

immediately freeze all activity and expenditures by Defendants and their agents,

attorneys and assignees. In the alternative, the Court should require the shares of WSBC

and all assets and records be transferred to a receiver appointed by the Court who will
act to immediately protect Plaintiffs right to satisfy their judgment and end Defendants

unlawful acts.

il. MATERIAL FACTS NOT IN DISPUTE.

The folowing material facts are not disputed and support Plaintiffs' motion for

summary judgment:

7
 Case: 1-:16-cv-00464-RHC Doc #: 99 Filed: 03lL3lL7 Page: I of 38 PAGEID #:274I

A. The Kentuc Judgment and Orders and Chesley's knowledge

that judgment would likelybe entered against him.

1. In Decembey 2oo4, Plaintiffs filed a lawsuit against Chesley and three other

attorneys for breaching their fiduciary duties by stealing millions of dollars in funds

during their representation of Plaintiffs in fen-phen litigation. See Abbott, et aI. u.

Chesley, et al., Case No. o5-Cl-oo436, in the Circuit Court for Boone County, Kentucky.

The trial court entered judgment against all defendants other than Chesley in zooT jointly

and severally in the amount of $+z million. The Supreme Court of l(entucky affirmed that

judgment on August 29,2org. See Abbott u. ChesleU, 4r3 S.W.gd 589, 596 (Ky. zog).

2. While that appeal was pending, Chesley responded to disciplinary

proceedings relating to his conduct in the Fen-Phen litigation. The Trial Commissioner

issued his report and recommendations that were unanimously adopted by the Board of

Governors of the Kentucky Bar Association on June 14, 2orr. See Kentucky Bar Ass'n u.

Chesley,3g3 S.W.3d SB4, Sgg (zorg). In rendering its Opinion permanently disbarring

Chesley, the l(entucky Supreme Court stated that Chesley "knowingly participated in a

scheme to skim millions of dollars in excess attorney's fees from unknowing clients." Id.

at 599.

3. Chesley's co-counsel, three attorneys in Kentucky and one associate

attorney, along with the trial juclge in the fen-phen litigation were all also permanently

disbarred from the practice of law in Kentucky prior to Chesley. See Kentucky Bar Ass'n

u. Bamberger, BS4 S.W.Sd SZ6 (I9. zorr); I{entucky Ban" Ass'n u. Helmers, 353 S.W.gd

b99 (Ky. zou.); Kentttcky Bar Ass'nu. Mlls,3iB S.W.3d Bg (Ky. zoro); Cunninghamu.

Kentucky Ber Ass'n,266 S.W.gd 8oB (Ky. zoo8); Gallion u. Kentucky Bar Ass'n, 266

S.W.gd Boz (I(y. zoo8). Chesley's co-counsel were indicted in 2oo7, two were criminally

B
 Case: l-:16-cv-00464-RHC Doc #: 99 Filed: O3lL3lL7 Page: 9 of 38 PAGEID #:2742

convicted and Chesley was granted immunity. See United Sfafes u. Gallion, et al.; Case

No. z:o7-cr-ooo39 in the United States District Court for the Eastern District of
Kentucky.

4. After the Supreme Court's opinion disbarring Chesley, Plaintiffs moved for

summary judgment against him on their breach of fiduciary duty claims. The trial court

granted that motion and also ruled that Chesley was jointly and severally liable with his

co-defendants for the $42 million judgment against them (the "I(entucky Judgment").

See Order (Aug. t, zot4). Subsequent post-judgment orders made Plaintiffs' judgment

final pursuant to Ky. R. Civ. P. 54.02 and provided for pre-judgment and post-judgment

interest. See Orders (Sept. rg,2oL4; OcT. zz, zot4). The Court of Appeals of Kentucky

affirmed the Kentucky Judgment in all respects. See Chesley u. Abbotf, Case No. zor4-

C-ootTzS-MR, zorT WLg+SgZg (Ky. Ct. App. Mar. 10, zorT).

B. Chesley's execution of the Wind-Up Agreement to continue

WSBC's existence and his control of it.
5. At the time of his disbarment, Chesley was the sole shareholder, president,

sole member of the Board of Directors and registered agent for service of process of

WSBC. See Wind-Up Agreement (Exhibit ror). According to the Ohio Secretaty of State's

records, Chesley remains the registered agent for service of process for WSBC. See

us

(last visited Mar. 7, zotT).

6. On April rS,2or1,just weeks after being clisbarred in Kentucky and the day

before resigning from the practice of law in Ohio, Chesley entered into the Wind-Up

9
 Case: L:1-6-cv-00464-RHC Doc #: 99 Filed: 031131t7 Page: l-0 of 38 PAGEID #:2743

Agreement with Thomas Rehme, his longtime friend and the Secretary of WSBC. (Exhibit

tot, the "Wind-Up Agreement"). t

7. At the time Chesley transferred WSBC to Rehme, Chesley's assets were

insufficient to satis$r the Kentucky Judgment. See Exhibit r35 at SMC oo778 (showing

assets ofjust over $r4 million).

B. The Wind-Up Agreement does not include an exchange of consideration to

Chesley for the transfer of WSBC to Rehme. (See Ex. ror). Rehme does not receive a

salary for his role as Trustee of WSBC. (Deposition of Thomas Rehme (D.E. 6r), aI44:t9-

45:13).

g. Under the Wind-Up Agreement Rehme agreed to hold rooyo of Chesley's

shares in WSBC in trust "for the exclusive purpose of winding up the Corporation for the

benefit of its employees, creditors and Transferor [Chesley]. Rehme's specifically

enumerated responsibilities included identifying all assets, all debts, all accounts and

liquidating assets and distributing the proceeds to creditors and "the remainder to

Transferor." Chesley was required to resign "from all positions with the Corporation,

including that of President and employee."

10. The net economic benefit, after creditors are paid, goes to Chesley.
(Testimony of Marion Little (D.8. Sq) al67:tg-zt). According to Rehme, the purported

Trustee under the Wind-Up Agreement, and Steve Horner, the in-house accountant for

WSBC, all of WSBC's debts have been paid and WSBC has no creditors. (See Deposition

of S. Horner (D.E. 6S-6+) al55:15-24; Deposition of T. Rehme (D.E. 6t) al63:4-t4).

' Separately, Plaintiffs are filing a "Notice of Filing Exhibits" which identifies the exhibits admitted
into evidence at the preliminary injunction hearing in this matter and additional exhibits indentified herein.
Exhibit numbers in this Memorandum correspond to the exhibit numbers from the preliminary injunction
hearing.

1-O
 Case: 1:l-6-cv-00464-RHC Doc #: 99 Filed: 031131L7 Page: l-1- of 38 PAGEID #:2744

C. The Kentucky Execution Orders.

11. In light of the Wind-Up Agreement produced in discovery, Plaintiffs filed a

motion in the Kentucky action to execute on Chesley's beneficia interest in WSBC and on

June 23, zor5 the Kentucky Court grantedthat motion, ordering Chesleyto: direct Rehme

to make all payments derived from Chesley's interest in WSBC to Plaintiffs' counsel. See

Order (June zg, zotg).

L2. Following additional discovery, Plaintiffs filed a motion in the Kentucky

action to execute on Chesley's tooYo ownership interest in WSBC. On September 25,

zoLS, the l(entucky court entered an order finding that the Wind-Up Agreement was a

sham and that Chestey continued to control WSBC and direct where money was paid,

including fees of over $16 million. See Order (Sept. 25, zot5) at 2-3. The Court ordered

that "Defendant Chesley shal immediatelytransfer his or,vnership interest in WSBC to the

Pr ain'iffs'n'

'n :,::. :,, -::;':. ii.,,,ur n .ve*.

Plaintiffs' counsel any all monetary payments made to Defendant

Chesley from his interest in WSBC;

Defendant Chesley shall immediately direct the Trustee of the

Castano Trust that all payments to which he and/or WSBC are

entitled from the Castano Trust shall be paid directly to Plaintiffs'

counsel; ancl

Defendant Chesley shall advise the Court in the matter of Merilyn

Cook, et al. u Rocktuell Int'l Corp., Case No. r:9o-cv-oor8r-JlK, in

the United States District Court for the District of Colorado (the
"Rocky Flats Litigation"), that all payments or fees to which he

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and/or WSBC are entitled shall be paid directly to Plaintiffs through

their undersigned counsel.

13. The I(entucky court expressly found that Chesley was "utilizing WSBC and

its existence during what is supposed to be a wind-up period, to prevent Plaintiffs, his
judgment creditors, from executing on their Judgment." Id. The I(entucky court also

found that Chesley was "taking action to render himself insolvent while directing assets

to WSBC, including fees from the Fannie Mae Litigation and tobacco litigation, and the

transfer of $S9 million from his personal accounts to WSBC." -Id.

:^4. The I(entucky court noted that it could disregard the corporate entity when

there is "(r) domination of the corporation resulting in a loss of corporate separateness

and (z) circumstances under which continued recognition of the corporation would

sanction fraud or promote injustice." Id. at4 (citing Inter-Tel Technologies, Inc. u. Lnn

Station Properties, LLC,36o S.W.3 dr5z, 16S (Ky. zotz)). This finding was not necessary

for the court to find that the transaction between Rehme and Chesley was a sham and for

the court to grant Plaintiffs motion to execute on Chesley's ownership interest in WSBC,

as personal property subject to satisfaction of Plaintiffs' judgment. However, the court's

finding supports an alter ego ruling against the Defendants in this case.

15. The September 25, zoLS Order was the result of Plaintiffs' rnotion to

execute, on which both parties submitted written briefs and participated in oral

argument. WSBC received notice of the motion through Chesley, its registered agent, and

paid attorney's fees to oppose the motion.

t6. As a resut of Chesley's failure to comply with Kentucky court's orders, to

disclose fee income and to deliver fee income to Plaintiffs, the Kentucky court issued a

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Show Cause Order for Chesley to appear and explain his non-compliance. Chesley did

not appear and an arrest warrant was issued."

D. Chesley continues to control and use WSBC, ignoring any form

of legal separation.

tT. After the execution of the Wind-Up Agreement, Chesley supposedly had no

authority to bind WSBC. (Little Testimony (D.E. Sq) at gg:7-tz). Nevertheless, Chesley

continued to control WSBC, binding it and using it for his own benefit. Rehme allowed

Chesleyto continue to receive personal financial benefit from WSBC and Chesley's control

of WSBC went unchecked. Chesley remained an employee of WSBC and continued to

come into the offce nearly every day and to use the same assistant he always used. (Dep.

of Thomas Rehme (D.E. 6r) at 5: z3 - 6:rr-7:2.). WSBC continues to pay Chesley's

assistant, Melissa Mason-Hoover. See Exhibit ro5, Emplo)ment Records.

t8. WSBC has several other employees. Mr. Rehme and Steve Horner, a full-

time accountant who is the CFO of WSBC. WSBC pays all of Mr. Horner's salary, even

though he writes checks for Chesley from his personal accounts. See Exhibit rg5; see also

Horner Dep. (D.E. 6S-6+) 82:25-39:25.

Lg. Chesley continued to exercise control by writing checks to himself and

others from WSBC's bank account, signing his own name. See Exhibits 112 and u3. He

" Chesley filed suit against the Hamilton County, Ohio Sheriff and obtained an injunction preventing
all law enforcement frorn complying with the arrest warrant. See Stanley M. Chesley v. Hamilton County
Sheriff Jirn Neil, Court of Common Pleas, Hamilton County, Ohio, Case No. A15o6z94.
Chesley also filed suit against Plaintiffs' counsel and all together filed four proceedings to block enforcement
of the judgment against him, including the objections to the registration of the I(entucky judgment in Ohio.
See Stanley M. Chesley u. Angela M. Ford, Esq., et a/., Case No. A15ooo67, Court of Common Pleas,
Hamilton County, Ohio; Sfcnley M. Chesley, et aI. u. Probate Estate of Danny Lee Abney, ef crl., Case No.
A16oz5o8, CourtofCommonPleas,HamiltonCountyOho;MildredAbbott,etal.u.StanleyM.Chesley,
EX 16oo48, CJ t6oo6zt4, Court of Common Pleas, Hamilton County Ohio; In reWaite, Schneider, Bayless
& Chestey Co., L.PA., Case No. zot6oog65g, Court of Common Pleas, Probate Division, Hamilton County,
Ohio. Chesley and his attorney have been sanctioned in one of the cases while similar motions remain to
be heard in the other matters.

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signed a Resolution for a bank loan as the sole member of the WSBC Board of Directors

(Exhibit rgr) and a tax document on behalf of WSBC. See Exhibit 133. He received a I(1

for zor3 from WSBC as the tooyo owner. See Exhibit r38 at SMC orr73.

2 . Chesley negotiated with past employees regarding severance amounts still

owed-even after the employees first tried to negotiate with other WSBC employees. See

Exhibit ro3.

2r. Chesley continued to enter into fee agreements for amounts due to WSBC.

In fact, the day after he executed the Wind-Up Agreement, Chesley executed an

agreement on behalf of WSBC pertaining to the fees due from pending litigation-the

Dul<e Energy case-agreeing to accept less than what was otherwise owed to WSBC. See

Exhibit roz.

22. Chesley had WSBC pay either him or others on his behalf, without any

resistance from Rehme, the "trustee" of the firm. (Rehme Deposition (D.E. 6r) at 23:2-

1g). Neither Rehme nor anyone else questioned Chesley about these parments, their

amounts, or whether they were proper.

25. Chesley was an authorized signatory on WSBC's bank account at Northside

Bank & Trust from the date the account was opened in zor4 until zor5 - when discovery

was underway in I(entucky. See Exhibit 136.

24. During that period, Chesley wrote checks to himself in amounts exceeding

$2.5 million. See Exhibit 113. Chesley was also paid $5,399,78t.25 from WSBC from

Augnst zot4 through February zot6, the only dates Plaintiffs have records for thus far.

See Exhibit 136.

25. During this same time period, Chesley directed $8,423.948.23 in fees from

settlement of the Fannie Mae case be paid to Fifth Third Bank on a loan he co-guaranteed

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with WSBC. See Exhibit r3o. He settledthe Davis case for millions of dollars andhis

counsel deposited those funds into their IOLTA account and then distributed funds to

others as directed, including Chesley's personal attorneys and a $r.6 million transfer to

WSBC's pension plan which was deposited into Chesley's personal retirement plan. See

Exhibit 192. Over $z million ($2,555,128) in fees were paid from the Castano Trust. See

Exhibit ro7. The total fees paid to Chesley or WSBC after the judgment in Kentucky

against him total $zg,og;,495. See Plaintiffs Summary of WSBC Northside BankAccount

Records August zor4-February zo16 attached as Exhibit 188; See clso supporting records

Exhibits 196, 13o, t47 and to7.

26. WSBC also paid attorneys in excess of $2.3 million from Northside Bank for

the same time period, including payments for Chesley's oum personal attorneys. See

Exhibit r34.

27. WSBC's records in zor5 following Llte entry of the Kentuc Judgment
(August 2ot4to February zot6) show that WSBC, a non-operating law firm in zor5, had

a full-time CFO paid $r45,ooo, who also does work for Chesley and his family entities,

one part-time assistant who has worked for Chesley for years, earning $64,66o per year,

and an employee responsible for cars, who was paid $49,o25. See Exhibit ro5.

28. The firrn incurred massive expenses, including over $5o,ooo in telephone

expenses over $ro,ooo in fuel bills, over $45o,ooo in American Express payments for

charges made on behalf of Chesley and his family, and neariy $r7,ooo in fees for a condo

owned by Chesley and held in an Ohio limited liability corporation, Dickens & Crumpet,

LLC. See Exhibit 136 and rB8 (Northside Records and Plaintiffs Summary of WSBC

Northside BankAccount Records August zor4-Febu ary zot6; see also supporting records

Exhibits t36, t3o, r47 andtoT.

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29. Charges paid by WSBC show charges for items such as spas, expensive

clothing and accessories, orthodontia bills, plastic surgeons, college tuition to Amherst

College, restaurants, and veterinarian bills. Over $3o,ooo was paid to the Cincinnati

Reds. There are thousands of dollars in travel expenses for Chesley, his wife, their

daughter and her family, including hotels and airline tickets. See Sample Payments

Extracted from AmEx Statements paid by WSBC from September zor4 through

September zo16 (attached as Exhibit r89). These charges are clear evidence that Chesley

is using WSBC as his personal piggy bank, paying hundreds of thousands of dollars in

personal charges through WSBC.

30. Plaintiffs'summary of the American Express statements shows that WSBC

paid over $45o,ooo in charges from October zot4 to August zot6. Attached as Exhibit

r9o. The individual statements and proof of pavment are attached as Exhibit r9r.:

91. Chesley also fully controls vehicles that are titled in WSBC's name. See

Horner Dep. (D.8. 6S-6+) al4g:zg-44:3. That list included 93 vehicles although some of

them have apparently been sold. Nobody has been able to provide any reason why a non-

operating law firm owns those vehicles. Id. al4g:t9-zo.

J2. Chepley personally pays for maintenance and upkeep for this automobile

collection. See Exhibit rBS (Plaintiffs' Summary of CSH 1ooo15-1oooz3). Chesley

personally pays a mechanic, Dallas Scott, a monthly retainer. fti. However, WSBC pays

Matt Ladd $4g,oz; to maintain the cars or take them for maintenance. See Horner Dep.

(D.E.6S-64)^t 42-48; Exhibit ro5. WSBC paid for the maintenance even when the

vehicles were titled to Chesiey's wife. See Horner Depo. (D.E. 6g-6 4)at 43.

3 It is appalling that during two days of preliminary injunction hearing, neither Chesley, WSBC nor
their counsel disclosed that Chesley's personal use of WSBC was continuiug.

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3g. The automobiles are stored in a warehouse for which Chesley personally

pays maintenance, taxes and upkeep. See Exhibits rL4, t37.

g4. At least one of the vehicles has been sold, but none of the sales proceeds was

paid to Plaintiffs. Chesley negotiated the terms of the auction, but Rehme does not know

what happened to the sales proceeds. See Rehme Dep. (D'E. 6r) at 36:13-15; 37:7-13.

E. As Chesley used WSBC's money as his own, without objection

from Rehme, he was also ridding himself of assets.
gS. While Chesley is using WSBC as his own piggybank, a review of his financial

statements shows that he rid himself of a large part of his personal assets as early as 2011,

which was the same year of the Trial Commissioner's Report and the Board of Governor's

affirmance. See supra l 2.

56. On January r, 2oLL the combined assets of Chesley and WSBC were $rzo

million. Exhibit r35 and t38. On December 3t, 2or2, $gB million of the $rzo million
disappeared from the combined financial statements. Id. In the next 12 months another

$16 million went missing for a total of $rr4 million. /d.

57. As of the end of the calendar year 2ort, Chesley's personal assets exceeded

$Bg million and his net worth was $29 milion. ,See Exhibit r35 at SMC or5ro.

g8. One year later, at the end of the calendar year 2oL2, Chesley's assets had

plummeted to just over $t9 million. See Exhibit r35 at SMC ot5r6.

Sg. At the end of the calendar year 2o!5, Chesley's assets had further
diminished to just over $r4 million. See Exhibit 13b at SMC oo778. His net worth was

-$S.z million. See id. at SMC oo77g. This was also the year in which the Supreme Court

of Kentucky permanently disbarred him for defrauding Plaintiffs. See supra f z. That

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means that during the year he was disbarred and the Supreme Court of Kentucky found

that he had defrauded Plaintiffs, Chesley's net worth dropped by $26.2 million.

4c.. All while transferring his personal assets, Chesley paid personal expenses

through WSBC.

Chesleg Asset Transfers n zott

4r. In November 2011, Chesley transferred his interest in Agra, the entity that

owns his house, to his wife for $r. ,See Exhibit r7z. (Membership Interest Conveyance).

The real and personal property of Agra were insured for $zg,gg4,S7r based on appraisals..

See Exhibit r75 (Personal Homeowner Policy Declaration).

42. A commercial garage that houses some of the 33 cars owned by WSBC is

owned by Milford One, LLC, an entity or,vned by Chesley. That property is insured for

$So9,64g under the same policy as Agra. Exhibit r75. fn zott, Chesley conveyed Milford

One, LLC to his wife. Dep. of Steve Horner (D.8. 6S-6+) at 6rt7-63:zr:.

45. A tist of the 33 cars shows the year, make, model, VIN number and

estimated value for each car and a total value of $b43,oo o. See Exhibit ro8. The cars

were transferred to Chesley's wife. On November 21, zou Chesley's wife made a check

payabletoWSBCfor$b43,ooo. SeeExhibitrrr. Threeyearslater,onNovember26,2or4

WSBC made a check payable WSBC to Susan Dlott for $b4g,ooo. See Exhibit ru.

44. The Firemen's Fund Ins. Policy for zor5 for all 33 cars sets forth the total

"valulock" value for all of these same cars at a total value of $S.5 million. See Exhibit 11o.

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F. The diversion of fee income due WSBC or Chesley required to be

rraid to Plaintiffs by the Kentuchv Orders.

The Daus Case

45. WSBC was the plaintiff in a case in this Court's Eastern Division styled
Waite Schneder Bayless & Chesley Co., LPA u. Dauis, Case No. r:rr-cv-85r. On

September 4,2ors,thatcasewassettled. SeeExhibitro6. Astipulationof dismissalwas

filed by WSBC on September 24, 2oL5. ,See Davis Case at D.E. 258.

46. After discovering the settlement and the parties failure to comply with the

June 23, zor5 Order, one of the Plaintiffs herein filed a motion for disclosure of the

settlement agreement and for the turn over of the settlement funds. See Davis Case at

D.E. z6z.

47. In his Show Cause Order, Judge Carr noted that Chesley acted as the
representative of WSBC at trial and was also a witness and stated that he never would

have accepted a settement in the case "that enabled Chesley - or others acting on his

behalf or in concert with him - to evade the obligation to pay over the settlement
proceeds" to Plaintiffs. See Davis Case at Show Cause Order, D.E. z7t at z and 5. "I feel
tricked, and complicit, albeit unwittingly so, in chicanery, duplicity, and mendacity. No

judge should ever find himself in that situation." Id, at S. While Judge Carr ultimately

determined that he no longer had jurisdiction over the case to order the settlement funds

turned over, in doing so he stated that "Had someone told me about those documents, I

would not feel that, however unwittingly, I have helped a bandit to escape." See Davis

Case at Order, D.E. 295 at 11 (emphasis in original).

q8. The settlement funds were wired to the IOLTA account of.Zeiger, Tigges &

Little, LLP ("ZTL"), WSBC's attorneys in the case. ,See Exhibit ro6. $z million was

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withheld as attorney's fees pursuant to a purported contingency fee agreement but ZTL

did not distribute the balance to WSBC. Instead, it wired $t,672,828 to WSBC Defined

Benefit Pension Plan at Johnson Investment Counsel and those funds were then put into

a separate retirement account for Chesley. See Exhibit r9z (Disposition of Davis Funds).

ZTL also paid $416,zor and $z4,7gg3o to Chesley's personal attorneys in the l(entucky

case, Frost Brown and Benton, Benton and Luedeke, respectively. Id. An additional

groo,ooo was paid to WSBC and $b24,977 tolJnion Savings Bank and a cashier's check

was obtained for the remainder of $448,9S8.85 that was deposited into a new WSBC

operating account at Delaware County Bank where additional fees to Chesley's personal

attorneys at Frost Brown Todd, #25,555.49 and $37,ooo, and fees to his accounting firm

of $g9,r94 were paid. $16o,ooo was paid to WSBC. Id.

The Cs.stsno

49. Chesley is also the beneficiary of the Castano Directed Distribution Trust

("Castano Trust"), a trust created to distribute attorney's fees from the settlement of

tobacco litigation. See Exhibit rr9 and ro7. Chesley was a beneficiary of the Castano

Trust. Id. The terms of the Castano Trust entitle Chesley to quarterly payments of
g648,98z starting in zoor through October 2024, with a final distribution of $5B,Bzr on

January rS,2o2S for a total distribution of $35,747,855' Id.

bo. Chesley has always individually controlled where and how the distributions

from the Castano Trust are paid. The distributions were deposited into his personal

Johnson Trust Accorints from January 15, 2oog until Apri 20, 20LL. ,See Exhibit 116

(Johnson Investment Spreadsheet).

51. On April 29, 2otl Chesley refinanced a loan for which he and WSBC were

co-borrowers and pledged the Castano fee money as collateral. See Exhibit e7 and

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Exhibit rzo (Loan Documents and Securities Account Control Agreement). Chesley had

previously collateralized the loan with his personal investment accounts at Johnson Trust,

but he had transferred near all of the money out of those accounts and into WSBC. See

Exhibit 116.

52. The next ten quarter payments were wired by the Castano Trust to Fifth

Third Bank. See Exhibil tz6.

5g. On October L,2ot4 Chesley sent an email to his accountant, Denice Herlein,

and a representative of Fifth Third Bank, attaching the wiring instructions that would pay

off the Fifth Third loan with the Fannie Mae fees he directed to Markovits, Stock &

Demarco, the firm that assumed responsibility for the case. See Exhibit r3o. The email

set forth the two separate wire transfers, with $8.+ million to be wired to pay offthe Fifth

Third loan and $8.2 million to be wired to an account in the name of WSBC at Northside

tsank. .fd.

54. On December 4,2ot4, after the Fifth Third loan was paid in full, Chesley

designated WSBC as the beneficiary. See Exhibit r33.

SS. On January t6,2or1, the Castano Trustees by email requested that WSBC

be treated as the beneficiary of the January zor4 distribution and all future distributions,

nothwithstanding Chesley's earlier "irrevocable" instructions, but requested that the fees

continue to be deposited into the Fifth Third Commercial Loan Account. See Exhibit 132.

That account is the bank's general wire account. The etter also states that the wiring

instructions to Fifth Third Banl< remain unchanged. Id.

56. The directions to Fifth Third Bank came after the l(entucky Judgment was

entered and made final. See Order (Aug. t, zot4) and Order (Sept t9, zot4).

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57. There was no consideration for Chesley's transfer to WSBC of the right to

receive the Castano Trust distributions.

S8. Since the I(entucky Judgment was entered on August L, 2014, the Castano

Trust has paid approximately $6.S million to Chesley directly or through WSBC at

Chesley's direction.

Duke EnergA

Sg. Prior to Chesley's disbarment and resignation from practice, he and WSBC

were counsel of recordinWilliams D. Duke Energy Int'l,Inc., Case No. t:o8-cv-ooo46 in

this District's Eastern Division.

6o. In its Order granting the motion for attorney's fees in Duke Energy,Ihe
District Court awarded a fee of $tg,zg7,rzz.76. See Duke Energy Order (Apr. 25, zot6)

(D.E. z68 ar 4).

6r. Nevertheless, Chesley, who is supposed to be without legal authority to act

for WSBC, signed a letter agreement stating that WSBC would receive far less in fees in

Duke Energy. See Ex. roz; Little testimony (D.E. Sg) at g37-r2. Those fees are

considerably less than the proportion of the work on the case Rehme claims that WSBC

performed. Those fees have been paid into Court.

The Ro cku--Flats Litg o'ton

62. WSBC and Chesey were also involved in litigation in Colorado with a

settlement of $37S million. See Cook u. Rockwell Int'l Corp., Case No. 1:9o-cv-oot8r, in

the United States District Court for the District of Colorado (the "Rocky Flats litigation").

65. The District Court judge in the Roc Flats litigation issued an Order

denying Plaintiffs Motion to Substitute as Real Parties in Interest in that case, stating

that "Mr. Chesley is not a real party in interest in this case and is not likelyto become one"

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and that because neither a claim nor an award of attorney fees has been made in this case,

so WSBC has yet to become a real pay in interest." See Rocky Flats litigation at D.E.

z4gg at z. That Court noted that Chesley did not comply with the orders or request that

any attorneys fees owed to him or WSBC be paid to Movants and the orders are not self-

effectuating. Id. aI z-g. Finaily, the Court found that "unlike in the case before Judge

Cleland, neither WSBC nor Chesley is a party to this case. And Judge Cleland did not

order that any attorney fees oued to WSBC be placed on deposit with the court; he

ordered that WSBC deposit any fees t receiued." Id. at 3 n.2 (emphasis in original).

6+. Eric Goering, the trustee to whom Rehme purportedly "transferred" WSBC

in the Probate action that is the subject of Plaintiffs' most recent Motion for a TRO (D.8.

97 and g7-LTo g1-r4), is not impartial. In a letter sent to counsel on October 25, zot6,he

estimated fees due WSBC from the Rocky Flats Litigation in Colorado to be approximately

gzo million. Id. at Exhibit N. Before the Colorado Court, that number has fallen to a

lodestar fee of $4 million. Id. al Exhibit G. Plaintiffs have no confidence that Chesley,

through others, will not enter into agreements to create the appearance of a lower fee

award to WSBC just as he did in Dttke Energy. And Goering not only requested to depose

all of the Plaintiffs here as part of the ABC action but filed a petition for a Writ of
Prohibition in the Sixth Circuit challenging this Court's orders.

65. Clearly, the fees from the Davis settlement and the Castano Trust were

directed to whatever account Chesley or his agents designated to hinder, delay and

defraud Plaintiffs. The Rocky flats fees are being handled similarly. All of these fees are

also subject to the I(entucky Court's Execution Orders. This Court should protect the

interests of the Plaintiffs by immediately entering an Order requiring that all fees and

zi)
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expenses due Chesley or WSBC from all cases be paid to Plaintiffs' counsel or be paid to a

Receiver designated by the Court.

G. Rehme's Transfers of WSBC Ownership and Probate Action.

66. On August go,2cl.6, Rehme incorporated Thomas F. Rehme, Trustee, Inc.

(Trustee, Inc."), a for-profit corporation. SeeD.E.97, Articles of Incorporation, Exhibit

J. On Septemb er t, 2oL6 Trustee, Inc. transferred the WSBC shares to Eric Goering, the
trustee/assignee in the ABC action. Id., Deed of Assignment, Exhibit I(. These transfers

occurred after this Court's preliminary injunction hearing.

62. These transfers also occurred afler the I(entucky Court found that Chesley's

transfer to Rehme was a sham transfer and awarded the ownership of WSBC and fee

income to Plaintiffs. (June 2g,2oLS Order) and (September 23,2ot1 Order). As a result,

Mr. Goering has no standing to act as a trustee/assignee for WSBC because his

predecessors, Thomas Rehme and Trustee, Inc., had no interest in WSBC Lo Lransfer'. The

claims of both rest upon a sham transaction and are fraudulent transfers.

68. Even if Mr. Goering had a claim to Chesley's interest in WSBC, he has

already demonstrated that he will seek to deny Plaintiffs are creditors of WSBC or

successors to Chesley's interest and has asked the Ohio probate court for permission to

retain counsel because Plaintiffs "are not judgment creditors of the Assignor itself." Id.

at Exhibit E.

6g. These transfers are blatant attempts to remove assets so that Plaintiffs

cannot collect them in satisfaction of their judgment and are attempts to avoid the

jurisdiction of this Court. In addition, based upon a list of newly identified purported

creditors of WSBC in the ABC action, including the IRS, which has millions of dollars in

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liens against Chesley, the action itself is intended to allow Chesley to avoid Plaintiffs as

creditors and and continue to pay his personal expenses out of the assets of WSBC.

70. The Probate Court, like the Colorado Court in the Rocky Flats case, leaves

the issues related to Plaintiffs' claims of fraudulent transfers of assets of WSBC to this

Court to determine. SeeD.F,.97, Transcript, Exhibit D at 55:rr-56:5.

ilI. I-AWAND ANALYSIS

Under Fed. R. Civ. P. 56(c), summary judgment shall be granted if the record shows

"that there is no genuine issue as to any material fact and that the moving party is entitled

to judgment as a matter of law." The evidence and the inferences to be drawn from the

evidence must be viewed in the light most favorable to the nonmovanl. Matsushita Elec.

Indus. Co. u. Zenith Radio Corp., 47SU.S. 574, 587 (t986). Once the moving party meets

its initial burden, the burden shifts to the nonmovant to set forth specific facts showing

that there is a genuine issue for trial. And.erson u. Liberty Lobby, Inc., 477lJ.5. z4z, 256

(tq86). The nonmovant "must present 'significant probative evidence' to show that there

is more than 'some metaphysical doubt as to the material facts."' United States u. Toler,

666F. Supp. zd87z,88o (S.D. Ohio zoog) (quoting Mooreu. Philip Morrs Co.,8 F.3d

3gS, Sgg-4o (gttr Cir. 1993)). If a factual dispute is unnecessary or irrelevant, it does not

create a genuine issue of material fact. St. Francs Health Care Centre u. Shalala, zo5

F d gSZ, 943 (6' Cir. zooo).

In this case there is no genuine issue as to the rnaterial facts establishing that
Defendants engaged in repeated fraudulent transfers designed to hinder, delay and

prevent Plaintiffs from coilecting on their judgment against Chesley, that Chesley and

Rehme conspired together and that WSBC is the alter ego of Chesley. Accordingly,

25
 Case: L:16-cv-00464-RHC Doc #: 99 Filed: 03lI3lL7 Page: 26 of 38 PAGEID #:2759

Plaintiffs are entitled to judgment as a matter of law, with the availabe remedies provided

by Ohio law.

A. Defendants have fraudulent transferred assets to prevent

Plaintiffs from collecting on their judgment against Chesley.
Under Ohio's Uniform Fraudulent Transfer Act ("UFTA"), a transfer made or an

obligation incurred by a debtor is fraudulent as to a creditor if the debtor made the

transfer "with actual intent to hinder, delay or defraud any creditor of the debtor." See

Ohio Rev. Code g tg36.o4. Ohio courts recognize that since direct proof of fraud is

difficult, if not impossible, the court may draw "sound inferences" from the circumstances

surrounding the transaction to conclude that actual fraud is proved. Blood u. Nofzinger,

834 N.E.zd 3SB, 368 (Ohio Ct. App. zoo5); see also United States u. Toler,666F. Supp.

zd 87z,8gr (S.D. Ohio zoog). The UFTA has codified "badges of fraud" because
"fc]enturies of experience have revealed . . . that persons desiring to hinder, delay, or

defraud creditors by placing themselves in a collection-proof condition tend recurrently

to use the same or similar devices." Aristocrat Lakewood Nursing Home u. Mayne, Tzg

N.E.zd 768, 776 (Ohio Ct. App. ryg. The statutory badges of fraud that tend to show

actual intent to hinder, delay or defraud a creditor are as follows:

(r) Whether the transfer or obligation was to an insider;

(z) Whether the debtor retained possession or control of the property

transferred after the transfer;

(g) Whether the transfer or obigation was disclosed or concealed;

(+) Whether before the transfer was made or the obligation was

incurred, the debtor had been suecl or threatened with suit;

z6
 Case: L:l-6-cv-00464-RHC Doc #: 99 Filed: O3lt3lI7 Page: 27 of 38 PAGEID #.2760

(S) Whether the transfer was of substantially all of the assets of the

debtor;

(6) Whether the debtor absconded;

( Whether the debtor removed or concealed assets;

(8) Whether the value of the consideration received by the debtor was

reasonably equivalent to the value of the asset transferred or the

amount of the obligation incurred;

(q) Whether the debtor was insolvent or became insolvent shortly after

the transfer was made or the obligation was incurred;

(ro) Whether the transfer occurred shortly before or shortly after a

substantial debt was incurred;

(rr) Whether the debtor transferred the essential assets of the business

to a lienholder who transferred the assels Lo art insider of Lhe debLor.

Ohio Rev. Code $ rgS6.o+(8).

The creditor claiming the transfer was fraudulent is not required to demonstrate

the presence of each of these statutory badges of fraud and the creditor is not limited to

the statutory factors. Blood,834 N.E.zd at 368. If the plaintiff who alleges fraud "is abe

to demonstrate a sufficient number of badges of fraud exist, the burden shifts to the

defending party to prove that the conveyance was not fraudulent and that there was a

legitimate purpose for the transfer." Toler, 666 F . Supp. zd at 89r. Ohio courts find that

the existence of at least three badges of fraud are sufficient "to constitute clear and

convincing evidence of actual frauduent intent." Blood,834 N.E.zd at 368.

Upon finding that a fraudulent transfer has occurred, the Court has broad

authority to grant appropriate relief, including but not limited to any of the following:

DN
 Case: L:l-6-cv-00464-RHC Doc #: 99 Filed: O3lI3lL7 Page: 28 of 38 PAGEID #:2761.

(r) Avoidance of the transfer or obligation to the extent necessary to satisfy

the claim of the creditor;

(z) An attachment or garnishment against the asset transferred or other

property of the transferee in accordance with Chapters z7t5 and z7t6 of lhe
Revised Code;

(g) Subject to the applicable principles of equity and in accordance with the
Rules of Civil Procedure, any of the following:

(a) An injunction against further disposition by the debtor or a

transferee, or both, of the asset transferred or of other property;

(b) Appointment of a receiver to take charge of the asset transferred

or of other property of the transferee;

(c) Any other relief that the circumstances may require.

Ohio Rev. Code g rgg6.oZ(A). Additionally, in cases, such as this one, where the creditor

has obtained a judgment, the court may order that the creditorlevy execution on the asset

transferred or its proceeds. Id. $ 1936.o7(B).

In this case, the unciisputed material facts show that Chesley's transfer of WSBC to

Rehme and Rehme's subsequent transfers of WSBC are fraudulent transfers that this
Court should remedy by appointing a receiver to take charge of WSBC for the benefit of

Plaintiffs until the Kentuc Judgment is satisfied. This Court may also allow Plaintiffs

to ler,y execution directly on WSBC and its assets pursuant to Ohio Rev. Code $

rSS6.oZ(B). Additionally, Chesley's transfer of the right to receive the Castano Trust

payments to WSBC was itself a fraudulent transfer that this Court should void and further

direct that Defendants direct that the Castano Trust distribution payments be made to

Plaintiffs' counsel, as ordered by the l(entucky court.

1. Transfer of WSBC
Whatever Chesley clairns was his purpose in transferring legal ownership of WSBC

to Rehme, it is clear that in practice he did exactly what the Kentucky court described -
z8
 Case: l-:16-cv-00464-RHC Doc #: 99 Filed: O3lI3lt7 Page: 29 of 38 PAGEID #:2762

"utilizing WSBC and its existence during what is supposed to be a wind-up period, to

prevent Plaintiffs, his judgment creditors, from executing on their Judgment." See supro

I 13. That course of conduct demonstrates not only multiple "badges of fraud" as set forth

in Ohio Rev. Code $ 1336.o4, but an entity that is supposed to be ending its existence

being used at Chesley's direction to move his assets to put them out of reach of Plaintiffs,

his judgment creditors. This Court should not permit such a misuse of the corporate form

to the detriment ofjudgment creditors.

First, Chesley transferred the shares of WSBC to Rehme, its trustee and secretary,

who is unquestionably an insider. Ohio Rev. Code $ r336.or(G); $ t336.o+(BXt) (first

badge of fraud). Additionally, when the transfer was made, on April 19, 2org, Chesley had

been defending Plaintiffs'lawsuit against him in Kentucky for more than eight years. He

had just been permanently disbarred from the practice of law in Kentuc barely three

weeks earlier by a unanimous opinion of the Supreme Court of Kentucky, after

recommendation of the Trial Commissioner and recommendation by a unanimous panel

of the Board of Governors. See supra I z. Chesley's co-counsel and two additional

attorneys were permanently disbarred before him. See supra f 3. Indeed, this goes well
beyond merely a timing issue and well.beyond Chesley's knowledge that Plaintiffs made

the claims they did against him. Chesley knew that he had been permanently disbarred

for defrauding Plaintiffs of millions of dollars and he knew that a multi-million dollar
judgment against him was imminent. Ohio Rev. Code $ t336.o4(BX+) (second badge of

fraud). A transfer under the guise of winding up his solely-owned law firm provided the

perfect vehicle to allow him to conceal his assets. That is exactly what he has done,

delaying and hindering collection of the judgment against him for more than two years

after it was entered.

29
 Case, l-:1-6-cv-00464-RHC Doc #: 99 Filed: O3lI3lL7 Page: 30 of 38 PAGEID #:2763

Chesley also unquestionably retained possession or control of WSBC after he

transferred it to Rehme. Ohio Rev. Code $ tgg6.o+(BXz) (third badge of fraud). He writes

checks on WSBC's account, including checks to himself, and signs its tax documents. See

'111[ supra tg, 23-24. He negotiates severance for former employees . See supra T zo. He
directs where fees are paid and enters into agreements to lower fees from pending

litigation. See supra lTT zr, 25,48, bo-S5, 6r. He controls the dozens of vehicles titled in

WSBC's name. See supra Tll g1-34. Perhaps the most telling indicator of Chesley clear

intent is the fact that he utilizes WSBC as his own personal banl< account, including

charging hundreds of thousands of dollars in personal charges for him and his farnily

members for which WSBC pays the bills. See Tll supro 2g-go. WSBC pays the fees of
Chesley's attorneys in the Kentucky litigation. See tll supro 26, 48. Chesley writes checks

to himseif on WSBC's accounts and otherwise takes money that, pursuant to the Kentucky

execution orders, required to be paid to Plaintiffs through their attorney. See TI suprc

24-25. Rehme freely allows this blatant misuse of corporate funds (for a corporation that

is supposed to only be winding down) with no resistance. See ll supro 22.

Chesley has also removed and concealed assets, including fee income received or

about to be received. Ohio Rev. Code $ rgg6.o+(8)(7) (fourth badge of fraud). Despite

knowing of the June 23, z-r5 Order, that Plaintiffs'motion to execute was pending at the

time settlement was reached in the Dauis case and the September 25, zor5 Order was

entered the day after the stipulation of dismissal was filed, Chesley, the representative of

WSBC befole the Court, concealed the existence of both the Wind-Up Agreement and

Kentucky Orders from the trial judge in the Dauis case. Judge Carr stated that he never

would have accepted a settlement in the case "that enabled Chesley - or others acting on
his behalf or in concert with him - to evade the obligation to pay over the settlement

3o
 Case: 1:1-6-cv-00464-RHC Doc #: 99 Filed: O3lI3l!7 Page: 31 of 38 PAGEID #:2764

proceeds" to Plaintiffs. See Davis Case at Show Cause Order, D.E. z7r at 5. Chesley's

actions in the Dauis case can only be viewed as an attempt to remove or conceal assets

frorn Plaintiffs.

Chesley's handling of the Davis fees was also an attempt to remove assets so that

Plaintiffs cannot collect on them in satisfaction of the l(entucky Judgment. Chesley and

his counsel's diversion of $r,67z,BzB of this fee income to the WSBC Defined Benefit

Pension Plan at Johnson Investment Counsel for deposit into a separate retirement

account for Chesley and payment by ZTL of over a half million to Chesley's personal

attorney bills were also an attempt to remove assets.4 In addition, a cashiers check for

$++8,9S8 was deposited in a new account never disclosed in asset discovery in Kentucky.

Similarly, Chesley's agreements on behalf of WSBC to accept a lower amount in

fees in Duke Energy is an attempt to remove assets so that Plaintiffs may not collect on

them in satisfaction of the KentuckyJudgment. Notably, the existence of the Duke Energy

and Rocky Flats cases were also never disclosed as potential future income in asset
discovery in Kentuc.

Chesley's transfer of WSBC to Rehme also occurred shortly before a substantial

debt was incurred - Plaintiffs judgment. Ohio Rev. Code $ tgg6.o+(to) (fifth badge of

fraud). That transfer occurred a mere r5 months before the Kentucky Judgment was

entered, a judgment that Chesley knew was coming given the surrounding circumstances

of his disbarment and the judgment against his co-defendants. Rehme's transfer of WSBC

to Trustee, Inc. and then to Eric Goering as assignee in the ABC action are clearly

+ Under the June 2g, 2orl Order and September 25, 2or:. Order, Chesley and his counsel were
ordered to turnover to Plaintiffs' counsel any and all monetary payments made to Defendant Chesley from
his interest in WSBC.

31
 Case: L:i-6-cv-00464-RHC Doc #: 99 Filed: O3lI3lI7 Page: 32 of 38 PAGEID #:2765

attempts to remove assets so that Plaintiffs cannot collect them in satisfaction of their

judgment and are blatant attempts to avoid the jurisdiction of this Court.

At the end of 2ou, by Chesley's own accounting, his assets exceeded $89 million

and his net worth was $29 million. See supra T SZ. At the end of the calendar year 2013

(the year he transferred WSBC), Chesley claimed to be insolvent, with a net worth of -$S.z

million. See supra I gg. This evidence also demonstrates that Chesley became insolvent

in the calendar year that he transferred WSBC to Rehme. Ohio Rev. Code $

rg36.o4(uXsixth badge of fraud). Chesley's claimed assets and net worth steadiy

dropped as his disciplinary proceedings repeatedly turned against him and as Plaintiffs'

lawsuit drew near a judgment, culminating in him becoming insolvent in the year he

transferred WSBC. The Kentucky Court likewise found that Chesley was rendering

himself insolvent while moving and directing assets to WSBC. See \l t3.

Plaintiffs have shown a sufficient number of badges of fraud to constitute clear and

convincing evidence of actual fraudulent intent. The burden shifts to Defendants to prove

that the conveyance was not fraudulent. This Court has broad authority to grant relief for

the fraudulent transfer, including appointing a receiver for the benefit of Plaintiffs
(because WSBC itself has no creditors, see n ro) and allowing Plaintiffs to execute on

WSBC and all of it's assets pursuant to Ohio law.

2. Transfer of Castano Trust payrnents

Chesley's handling of the Castano Trust payments is itself a frauduent transfer.

There are multiple badges of fraud present that constitute clear and convincing evidence

of actual fraudulent intent in Chesley directing that those pa)..rnents be made to WSBC.

First, the transfer was to an insider, WSBC. Ohio Rev. Code $ t336.o4(BXt) (first badge

of fraud); g rgg6.or(G) (defining "insider"). Second, Chesley has retained possession or

AD
 Case: L:1-6-cv-00464-RHC Doc #: 99 Filed: 03ll3lt7 Page: 33 of 38 PAGEID #:2766

control of the payments after the transfer. Ohio Rev. Code $ rgg6.o+(B)(z) (second badge

of fraud). Chesley has always had the power to direct how those payments are to be made.

See IT 49-ss.

Third, the transfer of the right to receive the Castano Trust payments was made

not only after Chesley had been sued, but after the I(entucky Judgment was entered and

made final. Ohio Rev. Code $ tgg6.o4(BX+) (third badge of fraud); see n 56. Foufth,

Chesley received no consideration, let alone reasonably equivalent consideration, from

WSBC for the transfer. Ohio Rev. Code $ rg36.o+(BX8) (fourth badge of fraud); see I 57.

Chesley was also insolvent at the time the transfer was made, having made himself

insolvent by the end of 2oLg. Ohio Rev. Code $ r336.o4(Bxg) (fifth badge of fraud); see

T gg. The transfer also occurred almost immediately after Chesley incurred a substantial

debt - the Kentucky Judgment. Ohio Rev. Code $ tg36.o+(B)(to) (sixth badge of fraud);

see fl 56.

In addition to there being actual intent to delay, hinder or defraud Plaintiffs with

the transfer of the Castano Trust payments, that transfer was also a fraudulent transfer

under Ohio Rev. Code $ rg36.o+(A)(z). That section provides that a fraudulent transfer

occurs when the transfer was made:

(z) Without receiving a reasonably equivalent value in exchange for the

transfer or obligation, and if either of the following applies:

(a) The debtor was engaged or was about to engage in a business or

a transaction for which the remaining assets of the debtor were
unreasonably small in relation to the business or transaction;

(b) The debtor intended to incur, or believed or reasonably should

have believed that the debtor would incur, debts beyond the debtor's
ability to pay as they became due.

oo
.).)
 Case: 1-:l-6-cv-00464-RHC Doc #: 99 Filed: 03lL3lI7 Page: 34 of 38 PAGEID #.2767

Here, Chesley transferred his right to the Castano Trust funds without receiving

any consideration for the transfer, let alone "reasonably equivalent value." See n 57.

Additionally, Chesley had been engaged in behavior to rid himself of his assets beginning

in zorr. Review of Chesley's assets show that he had been moving assets out of his name

for years. See llT g1-4o. At the time he transferred the Castano Trust funds from his name

to WSBC's, he had insignificant assets to satisfu the $42 million judgment against him.

See n 4o. Therefore, Chesley's transfer of the Castano Trust funds to WSBC constitutes a

fraudulent transfer under 5 t3g6.o+(AXz).

The Castano Trust transaction has six badges of fraud associated with it, which

constitute clear and convincing evidence of actual fraudulent intent. Alternatively, the

transfer is fraudulent under $ tgg6.o+(AXz). Consequently, Plaintiffs are entitled to

judgment as a matter of law on that claim and this Court should order Chesley to direct

the Castano Trust to make those payments to Plaintiffs through their attorney, with no

ability to change those payments until and unless the I(entucky Judgment is satisfied.

B. WSBC is the alter ego of Chesleybecallse the Wind-Up Agreement

is a sham used to allow Chesley to prevent Plaintiffs from
collecting the Kentucky Judgment.

As this Court recognized in its Order granting Plaintiffs leave to amend their

complaint, Ohio recognizes alter ego claim. See D.E. 92 at tr; see also In re Fisher, z96

Fed.Appx.4g4, 5o5-o6 (6thCir. zoo8); UntedStatesu.Toler,666F. Supp.zdBTz,BB5-

BZ (S.D. Ohio zoog). The alter ego doctrine differs from piercing of the corporate veil.

Veil piercing asks that one party be held vicariously liable for another's debts, but the alter

ego doctrine asserts that the two "are the same entity and therefore liability is direct."

Toler, 666 F. Supp. zd at BB5 (quoting Fisher,296 Fed. Appx. at So6). Courts typically

34
 Case: L:l-6-cv-00464-RHC Doc #: 99 Filed: 03113117 Page: 35 of 38 PAGEID #:2768

look at the following factors to deterrnine whether to disregard the corporate fiction under

an alter ego theory:

(r) grossly inadequate capitalization;

(z) failure to observe corporate formalities;
(3) insolvency of the debtor corporation at the time the debt is incurred;

(4) shareholders holding themselves out as personally liable for certain

corporate obligations ;
(S) diversion of funds or other property of the company property for
personal use;

(6) absence ofcorporate records; and

(Z) the fact that the corporation was a mere facade for the operations of the
dominant shareholder(s).

Toler, 666 F. Supp. zd at 88S; see also Fisher,296 Fed. Appx. at 506; Taylor Steel, Inc.

u. Ke.eton,4t7 F3d 598, 6o5 6tt'Cir. zoo5). These factors are neither exc.lusive nor

exhaustive. Toler,666 F. Supp. zd at 886. Moreover, "'none of these factors is a

prerequisite to a finding that the corporate form has been violated."' Id. at 886-8Z

(qtroting Transition Healthcare Assocs. u. Tr-State Health Inuestors, LLC, 3o6 Fed.

Appx. z7g, z9o (6th Cir. zoog)).

The undisputed evidence in this case shows that Chesley and WSBC are alter egos

of one another. While this case is somewhat different in that the individual is the debtor

seeking to hide behind the corporate entity to avoid liability and payment of his debts, the

ater ego doctrine is no less applicable. The evidence shows that Chesley has rendered

himself insolvent and is using WSBC as his vehicle to hide and conceal assets. However,

he continues to utilize WSBC as his own personal piggy bank, pa)4ng personal expenses

with the company's supposed assets and directing where assets are moved. WSBC is not

an operating law firm and the oniy purported reason for its continued existence is

35
 Case: 1:16-cv-00464-RHC Doc #: 99 Filed: O3lI3lI7 Page: 36 of 38 PAGEID #:2769

collection of outstanding fees earned and expenses incurred prior to the time Chesley

"permanently retired" from the practice of law in Ohio. That limited reason for existence

is absolutely no reason for the expenses WSBC is incurring. To the contrary, the evidence

clearly shows that WSBC's reason for continuing to exist is to allow Chesley to treat it as

his own while rendering himself "judgment proof' for the purpose of delaying and

hindering Plaintiffs' collection of the Kentucky Judgment.

For these reasons, Plaintiffs are entitled to judgment as a matter of law on the claim

that WSBC is the alter ego of Chesley, allowing them to proceed directly against WSBC

and its assets.

C. Defendants Chesley and Rehme conspired to hinder, delay and

prevent Plaintiffs from collecting on their judgment against
Chesley.

Under Ohio law, a civil conspiracy is defined as "'a malicious combination of two

or more persons to injure another, in person or property, in a way not competent for one

alone."' Williams u. Aetna Fn. Co.,7oo N.E.2d 859, 868 (Ohio 1998) (quoting and citing

multiple cases). The elements of a civil conspiracy under Ohio law are: (r) a malicious

combination; (z) of two or more persons; (S) injury to person or property; and (+)

existence of an unlawful act independent from the actual conspiracy. Maxey u. State

Farm Fire & Cas. Co.,68g F. Supp. zd 946,9S4 (S.D. Ohio zoro) (citing Pappas u.

Ippolito, SgS N.E.zd 6to,6zg (Ohio Ct. App. zoo8)).

The malice element requires "'that state of mind under which a person does a

wrongful act purposely, without a reasonable or lawful excllse, to the injury of another."'

Willams,7oo N.E.2d at 868 (quoting Pickle u. Swinehart, L66 N.E.zd 227, 229 (Ohio

rg6o)). However, the "combination" portion of the first element does not require an
express agreement between or among defendants, "but only a common understanding or

S6
 Case: 1,16-cv-00464-RHC Doc #: 99 Filed: 03lI3lI7 Page: 37 of 38 PAGEID #:2770

design, even if tacit, to commit an unlawful act." Aetna Cas. & Sur. Co.u. Leahey Constr.

Co., zr9 F.3d 5r9, S38 (6il Cir. zooo).

Chesley and Rehme have conspired to hinder, delay and prevent Plaintiffs from

collecting on the Kentucky Judgment. Their common understanding has been that

Rehme will ostensibly hold the legal ownership of WSBC (as evidenced by the Wind-Up

Agreement), while Chesley actually continues to control WSBC and use its money
however he wishes to prevent Plaintiffs from collecting on their judgment. There is no

need for the agreement to be express - it is amply evident from the circumstances of the

transfer and subsequent events, Moreover, Rehme does not question Chesley about what

he does or how much of WSBC's money he takes. See fl zz.

The element of the existence of an unlawful act is present in the fraudulent

transfers described in this Motion and Memorandum. The injury to Plaintiffs is likewise

evident - they have been prevented for more than two years from collecting their
judgment due to Chesley and Rehme's machinations.

CONCLUSION

Chesley's transfer of WSBC under the Wind-Up Agreement was fraudulent and has

been usecl fraudulently ever since to hinder and delay Plaintiffs from collecting their

judgment against him. He continues to use WSBC and the money in it to benefit himself

and maintain his lifestyle while biocking Plaintiffs from executing on the money he is

using. Rehme aided and abetted his actions and entered into subsequent fraudulent
transfers of WSBC. Chesley also fraudulently transferred the right to receive the Castano

Trust payments to WSBC for no consideration to prevent Plaintiffs from executing on that

stream of payment. The undisputed evidence shows that WSBC is the alter ego of Chesley

and he is using WSBC as though they are one and the same. Finally, Chesley and Rehme

37
 Case: 1:l-6-cv-00464-RHC Doc #: 99 Filed: 03lI3lt7 Page: 38 of 38 PAGEID #:2771.

have conspired to hinder, delay and prevent Plaintiffs from collecting on their judgment

and Rehme's recent transfers of WSBC are in furtherance of the ongoing conspiracy. For

these reasons, Plaintiffs respectfully request that this Court grant this Motion for Partial

Summary Judgment and grant Plaintiffs the appropriate relief provided in the UFTA.

Respectfully submitted,

Brian S. Sullivan, Esq. (ooqoztg)

Christen M. Steimle, Esq. (oo86Sqz)
DnvsuoRn & SsoHL rrp
2SS E. Fifth Street, Suite rgoo
Cincinnati, Ohio 45202
Phone: (94) 977-8zoo
Fax: (StS) gZZ-9t+t
Email : brian.sullivan@ dinsmore.com
christen.steimle@ dinsmore.com

/s/ Angela M. Ford

Angela M. Ford admittedpro hac uice
Chevy Chase Plaza
896 Euclid Avenue, Suite 3rr
Lexington, Kentucky 4o;o2
Phone: 8592682923
Email: [email protected]

Att orneg s for Plo,ntffs

CERTIFICATE OF SERVICE

This is to confirm that a copy of the foregoing was electronically fiied on March r3,

2or7. Notice of this filing will be sent to all parties by operation of the Court's CM/ECF

electronic filing system, and the filing may be accessed through that system.

s/ Anoela M.
Angela M. Ford

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Articles of Incorporation for Thomas F. Rehme' Trustee, Inc.
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 Doc lD.-> l-tC Doc #:97-I Filed:01"1L2117 P :A ol4 PAGEID #:

By slgnlg nd dubmlltng thlr form to th Ohlo Socrotarf of Stato {hs undorsgnd horoby Gerdfles {ht ho ol h
haB the roqulslto authorlty tg oxoculo thlg documsnt.

Requlrod
Artlcles nd orlglnal
appolntmgnt ot sgent muBt
b slgned by lhe lncorp0rato(s),
F. Rshmo
lflhe lncorporator By
ls n lndlvldu|, lhn lhey
must slgn ln tho "slgnturg"
box nd prlnt his/her nm
ln lhe "Pint NmB" box.
Prlnt Nme
lf lhe lncor?orator
lB buslnoss entlty, not sn
lndlvldual, lhen pfease Prlnt
tho on{ly nms ln ths
nsnature" box, an
authorizsd roprerenlatlvo
ol lho buslness entity
lrlut sign h th ''Bf box
and print hlslbsr nmo and
lltle/authority ln lhe By
"Prl Nailo" box,

Prlnl Name

By

Prit NamB

Form 6324 Pago 3 ol 3 Lasl Revl8ed: gn4l2015

(
Page 4
 EXHIBIT 11

JOINT WRITTEN CONSENT OF SHAREHOLDERS

 EXHIBIT 12

\MSBC Deed of Assignment for the Benefit of Creditors (T S+)

 I I I lto'r

\ COURT OF COMMON PLEAS

PROBATE DIVISION
HAruILTON COUNTY, OHIO

IN THE MATTER OF: Case No 100

wAtTE, SCHNETDER, BAYLESS & Judge Ralph E Wlnkler
CHESLEY CO., L.P.A.
Maglstrate

wAtTE, SCHNETDER, BAYLESS & CHESLEY CO., L.p.A.

pFEp F ASSINMENT FqR THE. BENEFTT OF cRptToR

Ths DEED OF ASSIGNMENT FOR THE BENEFIT OF CREDTTORS rs made by

warte, schnerder, Bayless & chesley, co ,L p A (the "compv"), an ohro professronal

corporatton wtth a pnnctpal place of buslness rn the Crty of Clnclnnatl, Hamrlton

County,
Ohlo The Company, belng lndebted to credrtors and desrrous of provrdrng an orderly

process for the sattsfactton of lts debts and obhgatrons, and pursuant to
a resolutlon
adopted and passed by the sole shareholder of the Company, desrres to convey
all of rts
property ln trust for the beneflt of lts credltors rn accordance wlth
Ohro Revrsed Code
Sectlon 1313 01, ef seg

Now, therefore, the Company hereby grants, asslgns, transfers, and sets-over
to
Enc W Goertng of Ctnclnnatt, Ohto, an ohlo resrdent, who rs duly lrcensed to praclrce
law
ln the State of Ohlo (the "Asstgniee"), for the benefrt of all the Company,s credrtors, all nght,

tttle' and tnterest ln and to all property of any descrrptron, real and personal, rncludrng,

wtthout ltmttatron, accounts, .shts, chattet paper, nores, rrshts to

::::,t,**;,]
payment, tegat clarms, th,i{rfrfi8fitft,nor'Ent dared Apnf 15, 2013 (the ,,wrnd
up
Agreement"), rnsurance pro6{Par?eftshO3;sl8currtres, rntellectuaf property, equrpment,

02t{622. 92101 5
#,
furntture, fxtures, suppltes, motor vehlcles, and the proceeds, replacements, and

substltutrons therefrom, along wrth all deeds, books, records, certlftcates, and papers

relatrng thereto, belongrng to the Company, wherever the same may be sltuated, except

such property as rs by law exempt from executton, to have and to hold the same unto sald

Assrgnee ln trust, to sell and drspose of sald real and personal property, and to collect, sue

for, and demand, recetve and recover all such sums of money as may or may becorne due,

owng, and payable on any promrssory notes, debts, chose tn actlon, evtdences of debt,

clarms, and demands, and then n trust to apply the proceeds artstng from them as follows

First To pay the reasonable costs and expenses (tncludtng legal fees and court

costs) of executlng and admlnrsterrng the trust hereby created, tncludtng, wlthout llrnltatton,

reasonable cornpensatron to Assrgnee for hs servlces and payroll for Company employees

Second To pay the Company's credttors the sums that may be due and owtng to

them from the Company, provrded, however, that rf there shall not be sufftclent funds wlth

whlch to pay allsard debts, then the sard debts are to be pard ratably and ln proportton and

rn accordance wrth the pnorrtres as set forth rn Chapter 1313 of the Ohlo Revrsed Code

Third lf the proceeds shall be rnore than sufficent to pay and satrsfy every one of

the Company's credrtors, then to pay and return to the shareholder of the Company the

balance rematntng, tf any, after payrng all of the Company's credttors

The Company hereby nomrnates, constttutes, and appotnts Asstgnee the Company's

true and lawful attorney to execute the trust hereby created, glvtng and grantlng unto satd

Asstgnee fulf power and authorrty to do and perform every act and deed, and thtng

necessary rn connectlon wrth the executon of thrs trust as fully and to all lntents and

purposes as allowed by Ohlo Revrsed Code S 1313 01, ef seq and as the company mtght

026t162!.1 92011 J 2
or could do lf thrs asstgnment had not been made, wrth full power of substrtutton and

revocatron, hereby ratrfyrng and conflrmtng all that Asstgnee or Asstgnee's substttute may

lawfully do or cause to be done by vrrtue hereof, as contemplated by, among other thtngs,

the Wrnd Up Agreement

Further, the Assrgnee, tn pedormlng the dutres and oblgatlons created by thts trust,

shall have full and sole authorrty (r) to perform all acts of the Company necessary and

appropnate to defend the Company rn any lawsults or other proceedtngs, tncludtng retatn

counselas necessary to represent the Company tn any such lawsutts and proceedtngs, (tt)

to take such actrons as may be requrred to wtnd up and dtssolve the Company as

contempfated by, inter aha, the Wrnd Up Agreement, tncludtng, but not ltmlted to the

retentron of legal counsel and an accountant to prepare and frle any tax returns or other

legaldocuments, and (rrr) to othenuse perform any other admlntstrattve functtons as may

be necessary

Bond shall be requrred of the Asstgnee for the failhful performance of the Asstgnee's

dutles rn connectron wlth the executron of thrs trust as ordered by the Hamllton County

Probate Court pursuant to R C S 1313 11

IRemarnder of page tntentlonally left blank]

0'103I I 3
02614622-t
 lN WITNESS WHEREOF, the undersrgned rn hs capacrty as the sole
shareholderof

set hls hand

the shares of Walte, Schnelder, Bayless & Chesley Co , LPA, has hereunto

tns4 daY of sePtember' 2016

Slgned and acknowledged bY

Waite, Schneder, Bayless & Chesley Co', LPA

By Thomas F Rehme, Trustee, lnc , sole shareholder

Th omas F Rehme,ln hts acrty as Prestdent and

Sole Drector

STATE OF OHIO )

couNTY OF HAMILTON
)ss
)

Before me, the Subscrrber, a Notary Pubhc ln and for sald County and State,
personally tpp.ut"d, Thomas F Rehme, who acknowledged that he dld slgn satd
ls hts free
instrument a resrdent and Sole Drrector, and that executton of $ald lnstrurnent
the free and
and voluntary act an OeeO rndrurdually and as an offlcer and sole dtrector, and
olrnitw ac and deed of Watte, Schnetder, Bayless & Chesley Co , LPA

IN TESTIMONY wHEREOF, I have hereunto subsCnbed my name and afftxed my

Notanal Seal thls # ay of September, 2016

N P lc

DONALD JOHI RATTRTY

Atlomeyallw
Nolary Publlo, Steto lo
My Commnsnn llas llo Enredon
Dats, $wton 117. 0.R.C.

9220I t 4
Q26t4627-l
2c 16t10 s6 I
ACGFPTANCE BY ASSIGNEE

Erc W Goelng of Clncrnnatr, Ohro, an Ohto restdent, who ts duly ltcensed to

practrce law rn the State of Ohro, hereby acceptp the trust created by the above lnstrument,
and agrees to farthfully perform the same

Date 1/t nJ lr By E-*

EncW Goenng

STATE OFOHIO )
)SS
COUNTY OF HAMILTON )

Before me, the Subscber, a Notary Pubhc tn and for sard County and State,
personally appeared, Errc W Goenng of Ctnclnnatt, Ohto, an Ohto restdent, who
cfnowledg"O ne drd srgn sard rnstrument and that executron of sald lnstrument as hls free
and voluntary act and deed

IN TESTIMONYA/VHE REOF, I have hereu nto subscrtbed mY n afftxed my

of September, 2016
N ota rral Seal thrs
lflfav
I
(
Ir, (
N Pubhc

Publrc,
My ll Dato
eclron

t r8'
^r u rr qoJ,,,{l,11ff:1t

g 3: l0
?il6 SEP l2

(r:Xu'rl 5 5
0!6H62-l
2016t'03659
COURT ENDORSEMENT

The above deed was delvered to the Hamllton County Probate Court on
September le,Z0lA and noted ln the Court's

Judge

Prepared by

Donald J RaffertY (0042614)

Donald W Mallory (0070875)
Cohen, Todd, Klte & Stanford, LLC
250 E Ffih St, Surte 2350
Crnctnnab, OH 45202-5136
Phons (513) 333-5243
Fax (513)241-4495
Ematl draffedy@ctks com
Emarl dmallory@ctks com

fll-ED
t
r r rr'1 r^

o
llir,qli fl*l: ;nU

201S[P 12 Pil 3' I I

9220il t 6
t2614623.t
 EXHIBIT 13
Assignee's Inventory (tl g6)
e IN THE COURT OF COMMON PLEAS
PROBATE DTVISION
HAMTLTON COUNTT, OHIO

IN THE MATTER OF: Case No. zo16oo3659

WAITE, SCHNEIDER, BAYLESS & Judge Ralph E. Winkler

CHESLEY CO., L.P.A.
Magistrate Rogena D. Stargel

ASqI GNEE'S I Nr\TENTO RY

t0 0
&D
STATE OF OHIO )
)SS
couNTY oF FIAMILTON )

Now comes Eric W. Goering, Assignee in the above-captioned case, being first duly

s\ryorn and cautioned, and hereby states as follon's for the inventory required by R.C. $

1313.15:

1. ASSIGNOR
The name of the Debtor/Assignor is Waite, Schneider, Bayless & Chesley Co., L.P.A.

The Debtor's place of business is Fourth & Vine Tou'er, 1 West Fourth Street, Suite r5r3, in

the City of Cincinnati, County of Hamilton, State of Ohio.

2, A,SSIGNEE

The name of the Assignee if Eric W. Goering, Assignee. Assignee's address is

Goering & Goering, LLC, zzoW, Third Street in the City of Cincinnati, County of Hamilton,

State of Ohio.

g. II\I-\ENTORY

full and true inventory"g$fig6l#,Hr^"ffirrign_or on September 12,2cl6,the day

A
'""'il"'i *i ttlll<r-Ep' J''rD[
of the assignment by Assign"., rights, and credits of the Debtor
iflatd""ry|l TpBl,

026349s6-r

r4 5D
included in the assignment, the encumbrances existing on the properfy, and all vouchers

and securities relating to the properly, according to the best knou'ledge of Assignee, is:

1. Motor Vehicles - See Exhibit A.

z. personal Property - Miscellaneous office equipmentand computers;files and

items in four off-site storage spaces.

3. Bank Accounts

1. The North Side Bank &Trust CompanyAccount XXXX6o94 - $364,oo0.53 as

of August 3r, zo16

2, Fifth Third Bank Account XXXXX$8r6 - $r,Soo as of September t4, zot6

4. Receivables

1. gr,935,16r.ro held pursuant to April 22,2oL6 Order Granting in Part Motion

for Temporary Restraining Order and Setting Preliminary Injunction Hearing lnMcGirr, et

al. u. Rehme, et al,, No. r:r6-q,-oo464-RHC (S.D, Ohio) arising from l4illiams, et al. u.

Duke Energy Int'I,Inc., et al., No. t:o8-o'-ooo46 (S.D. Ohio)'

2. Castano Trust - Quarterly payments of $65O,oo0 from October t, zo16

through October 7, 2024.

g. Roclqy Flats Litigation - Preliminary motion to approve $375,ooo,ooo

settlement pending; fees to Assignor not yet determined.

4. Hanford Litigation - Not yet determined.

S. Freddie Mac Litigation - Not yet determined.

4, APPRAISAL
The value of the assets listed above is not yet determined. With respect to the motor

vehicles listed above, Assignee is seeking court approval for appraisal bytrvo disinterested

o23490-t
2
appraisers. Assignee will supplement this inventory with additional information as it

becomes available.

The above inventory information is true and accurate to the best of my knowledge,

recollection, and belief.

Eric W. Goering, Assignee

Sworn to and subscribed to before me this rst day of N ,2at6 by Eric W

Goering, Assignee.

ot

N
0hto
Dale
NO
My 147

026349s6-l 3
 WSBC
Automobile List
(correlated to ins. policy)

Year Make Model Number License # Titled N ame

2008 Cadrllac 1GYFK63878R253634 FKH2239 W9FC-
2410 erolet Corvette 1G1YN2DT145800131 LIZZIE 3 WSBC
2007 Maseratr Quattroporte ZAMCE39A87OO2B453 SOFIA WSBC
1 994 Rol t_s [o_yqe Corniche lV Conv SCAZDO2CTRCXSOO4T FKH2237 WSBC
1 995 Bentl Contrnental ry SCBZBO3C7SCX52337 FKH2238 WSBC
309t Rolls Royce Pha ntom scAl s68404UX07291 CAMILLA WSBC
2009 Audt R8 N002314 HEIDE WSBC
2008 Porsche 911 Turbo PoAD2993857831 88 LIESEL3 WSBC
2006 Mercedes Benz SLR McLaren WDDAJ76F16MOOO75O MARLIES WSBC
1992 Mercedes Benz 600 SEL WDBGA57E7NAO56477 FKH2243 WSBC
2003 Mercedes Benz CL6OO WDBPJ76JX3AO3241O SMCl WSBC
20 0 1 Be scBLC3l 861 CX05775 Srncr WSBC
2qq0 Bent Azure SCBZKZZEOYCX62O84 CRUMPET BC
1992 Martrn Vrr SCFCAMiSXNBLSO295 rt<uzzqz WSBC
2001 Martrn D87 scFAB42331 K401 563 FLC1627 WSBC
1991 Rolls Cornche lll SCAZDO2D7MCX3Os13 FKHN44- WSBC
Contrnental scBCR63W15CO24466 ELOISE2 WSBC
e0qq
2A07 BMW M6 Conv WBSEK93567CY78318 OLGA3 WSBC
2005 Mercedes Benz SL65 WDBSK79F65FOg193O ILSA2 WSBC
2009 Rolls Royce _ Dro c scA2D68549UX16235 SERENA
206 Land Rover RHS SALMF13466A217472 STANC3 WSBC
2004 M 57 WDBVF78J04A000668 INGRIDl WSBC
1 982 Rolls Corniche lV Conv SCAZD42A1CCXOs1 17 FKH2236 WSBC
2008 Ferrar GTB nbnEm WSBC
2003 Ferrar 360 Modena FKH2235 WSBC
2003 Martrn ursh scFAc233738501099 CLEMMY WSBC
1974 S rlver Shadow LRC19783 FKH2234
1972 J uar XKE Conv u1gq!55 scsr- WSBC
1979 Porsche 2S 9289200855 FRW4187 WSBC

924570
.\

J
A
 EXHIBIT 14
McGirr Motion for TRO (U g8)
 Case: l-:L6-cv-00464-RHC Doc #: 75 Filed: A911911"6 Page: L of 5 PAGEID #: L840

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

CONNIE MCGIRR, et al.,

Civil Action No. 716-cv-464
Plaintiffs,
Judge Robert Cleland
vs.

THOMAS F. REHME, et a1.,

TEMPORARY RESTRAINING
ORDER
Defendants.

This matter is before the Court on the motion of Plaintiffs for Temporary
Restraining Order against Defendants Thomas Rehme ("Rehme"), Waite, Schneider,

Bayless, & Chesley, Co., L.P.A. ("WSBC"), and Stanley M. Chesley ("Chesley"). (Doc. 7r)'

Having considered the evidence and arguments of the parties, and being otherwise

sufficiently advised, the court finds the motion to be well-taken.

The Court finds that the Rule 65 factors weigh in favor of granting a temporary

restraining order. To begin, Plaintiffs have proven a likelihood of success on the merits.

There is no dispute that WSBC filed a new action in the Hamilton County Probate Court.

(See Doc. Zo). This filing followed Rehme's attempt to transfer all assets of WSBC to a

new "Assignee," Mr. Eric Goering. The Court notes that this transfer was without

consideration, and that this transfer appears to be with the intent to frustrate the

judgment creditors. This new action puts WSBC's assets and transfers before another

court white these same issues are pending before this one. Important, this Court has

the power to order the same relief as sought in the probate court. The new Assignee is

akin to a receiver, albeit one that was hand-picked by WSBC and thus whose

impartiality Plaintiffs reasonably question, and Plaintiffs have already asked this Court

1
 Case: L:L6-cv-00464-RHC Doc #: 75 Filed: 09/3.9/l-6 Page: 2 of 5 PAGEID #: LB L

to appoint a receiver. This issue was discussed at length during the preliminary

injunction hearing.

It is not lost on the Court that WSBC appears to be forum shopping. The Court
finds the timing of this purported transfer particularly troubling, as this filing comes

while a motion for preliminary injunction is pending, after a two day hearing, and a

motion for leave to amend the complaint to assert new causes of action is also pending.

The purported transfer of assets and new litigation is nothing more than an attempt to

have an Ohio state court decide issues that are properly pending before this Court.

The Court further finds a significant danger of irreparable harm. The

concealment or dissipation of assets constitutes irreparable harm. NCR Corp. u. Feltz,

No. gr-4oLt, gL-4o33 and gt-4o58, rg93 wL tt}76, at x2 (6th Cir. Jan.2I, 19%);
Huntington Nat. Bank u. Guishard, Wilburn & Shorts,.LLC, No. z:rz-CV-ro35, 2oL2

WL S9oz9 16, aT*9 (N.D. Ohio Nov. 26, zotz). Plaintiffs argue that this new action gives

WSBC the power to dissipate its assets through use of the Assignee. Here, the terms of

the assignment and order filed by WSBC reveals that the new Assignee has the authority

to sell all of WSBC's assets for the benefit of its creditors. (Doc. 7o at r). But it is highly

unlikely that the new Assignee will recognize Plaintiffs as creditors of WSBC. Before

this Court, WSBC has repeatedly argued that Plaintiffs are not creditors of WSBC and
.court has expressly
have no right to any WSBC assets, despite the fact that another

ordered both that Chesley transfer his interest in WSBC to Plaintiffs and that Plaintiffs

can direct execute on the assets of WSBC. Plaintiffs' status as a creditor of WSBC is

squarely before this Court. Thus, through this purported assignment, Rehme/WSBC

has attempted to remove this decision from this Court, place it in the plenary discretion

2
 Case: L:16-cv-00464-RHC Doc #: 75 Filed: 09/3-9/1"6 Page: 3 of 5 PAGEID #: L842

of the new Assignee, who wili have unfettered authority to deny Plaintiffs' claim and sell

or liquidate all WSBC assets before a fair and impartial decision can be made.

Moreover, Chesley, who is integral to this dispute, is not a party to the probate

court litigation, and the fraudulent transfer claims current pending before this Court

are certainly relevant to the probate court litigation. Accordingly, the Court finds

without temporary injunctive relief, there is a significant risk that WSBC's assets will be

liquidated without recognition of Plaintiffs' claims and before a decision as to their

status can be made, and Plaintiffs will be left without any recourse. This factor weighs

in favor of temporary injunctive relief.

Considering the harm to others, the Court is not convinced that WSBC is at risk

for greater harm than that which was just described by the Court. As such, this factor

weighs in favor of granting the temporary restraining order.

Finally, the Court finds that, to the extent implicated, the public interest would be

served by deterring others from engaging in fraudulent transfer of funds. See Concheck

u. Barcroft, No. z:ro-cv-656, zoto WL 4tt748o, at *3 (S.D. Ohio Oct. 18, zoto).
Similarly, forum shopping will not be tolerated. See Mtanu. Int'l Fdelity Ins. Co., z3F.

App'x z9z, zg8-gg (6th Cir. zoor).

Accordingly,

IT IS ORDERED THAT, until further orderbythe Court:

1. The Defendants, including all agents and assignees of Defendants, shall

not assign, disburse, distribute, transfer or take any action related to any asset of WSBC,

including money, outside of basic office expenses;

3
 Case: 3":1"6-cv-00464-RHC Doc #: 75 Filed: 09/1"9/1-6 Page: 4 of 5 PAGEID #: 1843

2. The Defendants, including all agents and assignees of Defendants, shall

not negotiate or enter into any agreements pertaining to income due WSBC and/or

Chesley;

g. Chelsey, including his agents and assignees, shall not direct or through

anyone acting on his behalf or for his benefit take nor direct any money that could be

claimed by WSBC or anyone who may owe money to WSBC;

4. WSBC, including its agents and assignees, shall not assign, disburse,

distribute, transfer or take any action on any assets, including money, outside of basic

office expenses;

b. Rehme, including his agents and assignees, shall not, in his capacity as

secretary of WSBC and as Chesley's trustee under the zor3 Wind-Up Agreement

transfer records of any kind or enter any agreements on behalf of WSBC or authorize the

assignment, disbursement, distributi<-ln, Lransfer or take any other action on any of

WSBC's assets, including money, outside of basic office expenses;

6. WSBC, including its agents and assignees, shall not make any

assignments, transfers, distributions, disbursements, or other payments to Chesley or

on behalf of or for the benefit of Chesley;

7. Chelsey, for himself or anyone acting on his behalf or for his benefit shall

not enter agreements or take nor direct any money that could be claimed by WSBC or

any person or entity who may owe WSBC money; and

B. Rehme shall not, in his capacity as secretary of WSBC and as Chesley's

trustee under the zor3 Wind-Up Agreement authorize or facilitate any assignments,

transfers, distributions, disbursements, or other payments to Chesley or on behalf of

Chesley.

4
 Case: 1:16-cv-00464-RHC Doc #: 75 Filed: 09/1-9/16 Page: 5 of 5 PAGEID #: L844

Having carefully considered the facts of this matter, the Court finds that the bond

already posted by Plaintiffs in this litigation sufficient. No additional bond shall be

required.

SO ORDERED.

S/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE

Dated: September 19, 2016

I hereby certify that a copy of the foregoing document was mailed to counsel of record
and/or ro se parties on this date, September 19,2016, by electronic and/or ordinary
mail.

S/Lisa Waqner
Case Manager and Deputy Clerk
(313) 234-5522

5
 EXHIBIT 15
McGirr Extended TRO (Oct. 17, zot6) 6 ++)
 Case: L:16-cv-00464-RHC Doc #: 83 Filed: !0117l!6 Page: 1 of 5 PAGEID #: 1907

IN THE UNITED STATES DISTRICT COURT

FOR THE SOI.TTHERN DISTRICT OF OHIO
WESTERN DIVISION

CONNIE MCGIRR, et al.,

Civil Action No. t:t6-cv-464
Plaintiffs,
Judge Robert Cleland
vs.
EXTENDED TBMPORARY
THOMAS F. REHME, et al., RESTRAINING ORDER
Defendants.

This matter is before the Court on Plaintiffs' Renewed Motion For Preliminary

Injunction against Defendants Thomas Rehme ("Rehme"), Waite, Schneider, Bayless, &

Chesley, Co., L.P.A. ("WSBC"), and Stanley M. Chesley ("Chesley"). (Doc. 8z). The

current Temporary Restraining Order (Doc. 75), which was issued with notice to the

affected parties, and previously extended, with notice, is scheduled to expire today. The

underlying facts have not changed. The Court finds, based upon those facts, that it is

appropriate to extend the existing Temporary Restraining Order pending the court's

determination as to the Motion for Preliminary Injunction. The current Temporary

Restraining Order as set forth below, SIALL BE AND IS HEREBY, extended for

fourteen (r+) additional days.

The Court finds that the Rule 65 factors weigh in favor of granting a temporary

restraining order. To begin, Plaintiffs have proven a likelihood of success on the merits.

There is no dispute that WSBC filed a new action in the Hamilton County Probate Court.

(See Doc. 7o). This filing followed Rehme's attempt to transfer all assets of WSBC to a
new "Assignee," Mr. Eric Goering. The Court notes that this transfer was without

consideration, and that this transfer appears to be with the intent to frustrate the

judgment creditors. This new action puts WSBC's assets and transfers before another
 Case: L:l-6-cv-00464-RHC Doc #: 83 Filed: tAlITll'6 Page: 2 ot 5 PAGEID #: 1908

court while these same issues are pending before this one. Importantly, this Court has

the power to order the same relief as sought in the probate court. The new Assignee is

akin to a receiver, albeit one that was hand-picked by WSBC and thus whose impartiality

plaintiffs reasonably question, and Plaintiffs have already asked this Court to appoint a

receiver. This issue was discussed at length during the preliminary injunction hearing.

It is not lost on the Court that WSBC appears to be forum shopping. The Court

finds the timing of this purported transfer particular troubling, as this filing comes while

a motion for preliminary injunction is pending, after a two day hearing, and a motion for

leave to amend the complaint to assert new causes of action is also pending. The

purported transfer of assets and new litigation is nothing more than an attempt to have

an Ohio state court decide issues that are properly pending before this Court.

The Court further finds a significant danger of irreparable harm. The concealment

ordissipationofassetsconstitutesirreparableharm. NCRCorp.u,Feltz,No.gr-4o11,9r-
*2 (6th Cir. Jan. 2L, tggg)i Huntington NaL Bank
4o33 and 9t-4o58, 1993 WL 11876, at
*9 (N.D.
u. Guishard, WIburn & Shorts, tIC, No. z:rz-CV-rog5, 2or2 WL 59o29t6, at

Ohio Nov. 26, zorz). Plaintiffs argue that this new action gives WSBC the power to

dissipate its assets through use of the Assignee. Here, the terms of the assignment and

order filed by WSBC reveals that the new Assignee has the authority to sell all of WSBC's

assets for the benefit of its creditors. (Doc. To at t). But it is highly unlikely that the new
Assignee will recognize Plaintiffs as creditors of WSBC. Before this Court, WSBC has

repeatedly argued that Plaintiffs are not creditors of WSBC and have no right to any WSBC

assets, despite the fact that another court has expressly ordered both that Chesley transfer

his interest in WSBC to Plaintiffs and that Plaintiffs can direct execute on the assets of

WSBC. Plaintiffs' status as a creditor of WSBC is squarely before this Court. Thus,

2
 Case: 1-:l-6-cv-00464-RHC Doc #: 83 Filed: lL711..6 Page: 3 of 5 PAGEID #: 1-909

through this purported assignment, Rehme/WSBC has attempted to remove this decision

from this Court, place it in the plenary discretion of the new Assignee, who will have

unfettered authority to deny Plaintiffs'claim and sell or liquidate all WSBC assets before

a fair and impartial decision can be made.

Moreover, Chesley, who is integral to this dispute, is not a party to the probate

court litigation, and the fraudulent transfer claims currently pending before this Court

are certainly relevant to the probate court litigation. Accordingly, the Court finds without

temporary injunctive relief, there is a significant risk that WSBC's assets will be liquidated

without recognition of Plaintiffs' claims and before a decision as to their status can be

made, and Plaintiffs will be left without any recourse. This factor weighs in favor of

temporary inj unctive relief.

Considering the harm to others, the Court is not convinced that WSBC is at risk

for greater harm than that which was just describetl by ttre Court. As such, this factor

weighs in favor of granting the temporary restraining order.

Finally, the Court finds that, to the extent implicated, the public interest would be

served by deterring others from engaging in fraudulent transfer of funds. See Concheck

u.Barcroft,No.z:to-cv-6g6,zotoWL4tr748o,at*3(S.D.OhioOct.rS,zoro). Similarly,

forum shopping will not be tolerated. See Mitanu. Int'l Fidelty Ins. Co., z3 F. App'x z9z,

2g9-gg (6th Cir. zoor).

Accordingly,

IT IS ORDERED TIIAT, until further orderbythe Court:

1. The Defendants, including all agents and assignees of Defendants, shall not

assign, disburse, distribute, transfer or take any action related to any asset of WSBC,

including money, outside of basic office expenses;

3
 Case: 1:l-6-cv-00464-RHC Doc #: 83 Filed: I-I'ILTlt6 Page: 4 af 5 PAGEID #: 19L0

2. The Defendants, including all agents and assignees of Defendants, shall not

negotiate or enter into any agreements pertaining to income due WSBC and/or Chesley;

3. Chelsey, including his agents and assignees, shall not directly or through

anyone acting on his behalf or for his benefit take nor direct any money that could be

claimed by WSBC or anyone who may owe money to WSBC;

4. WSBC, including its agents and assignees, shall not assign, disburse,

distribute, transfer or take any action on any assets, including money, outside of basic

office expenses;

5. Rehme, including his agents and assignees, shall not, in his capacity as

secretary of WSBC and as Chesley's trustee under the zor3 Wind-Up Agreement transfer

records of any kind or enter any agreements on behalf of WSBC or authorize the

assignment, disbursement, distribution, transfer or take any other action on any of

WSBC's assets, including money, outside of basic office expelses;

6. WSBC, including its agents and assignees, shall not make any assignments,

transfers, distributions, disbursements, or other payments to Chesley or on behalf of or

for the benefit of Chesley;

T. Chelsey, for himself or anyone acting on his behalf or for his benefit shall

not enter agreements or take nor direct any money that could be claimed by WSBC or any

person or entity who may owe WSBC money; and

8. Rehme shall not, in his capacity as secretary of WSBC and as Chesley's

trustee under the zor3 Wind-Up Agreement authorize or facilitate any assignments,

transfers, distributions, disbursements, or other payments to Chesley or on behalf of

Chesley.

4
 Case: L:16-cv-00464-RHC Doc #: 83 Filed: IAlfilt6 Page: 5 of 5 PAGEID #: LQIL

Having carefully considered the facts of this matter, the Court finds that the bond

already posted by Plaintiffs in this litigation sufficient. No additional bond shall be

required.

SO ORDERBD.

S/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE

Dated: October 17,2016

I hereby certify that a copy of the foregoing document was mailed to counsel of record
and/or pro se parties on this date, October 17 , 2016, by electronic and/or ordinary mail

S/Lisa Waqner
Case Manager and Deputy Clerk
(313) 234-5522

5
 EXHIBIT 16
T. Rehme Deposition +S)
Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

Page 1
COURT OF COMMON PLEAS
HAMILTON COUNTY, OHIO
* * *

MILDRED ABBOTT, et al.,

Plaintiffs,

vs. CASE NO. M151179

STANLEY M. CHESLEY, et al.,

Defendants.
* * *

Deposition of THOMAS F. REHME,

ESQ., a witness herein, called by the
plaintiffs for examination pursuant to the
Rules of Civil Procedure, taken before me,
Patti Stachler, RMR, CRR, CLR, CME, a Notary
Public within and for the State of Ohio, at the
Offices of Dinsmore & Shohl, LLP, 255 East
Fifth Street, Suite 1900, Cincinnati, Ohio, on
March 15, 2016, at 10:30 a.m.
* * *

Mike Mobley Reporting

800-894-4327
Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 INDEX 1 THOMAS F. REHME, ESQ.

2 2 a witness herein, having been first duly sworn as
3 THOMAS F. REHME, ESQ. PAGE 3 hereinafter certified, was examined and deposed as
4 EXAMINATION BY MR. SULLIVAN 4 4 follows:
5 5 EXAMINATION
6 6 BY MR. SULLIVAN:
7 EXHIBITS MARKED REFERENCED 7 Q. State your name, please.
8 PLAINTIFFS' EXHIBIT 1 10 10 8 A. Thomas F. Rehme, R-e-h-m-e.
PLAINTIFFS' EXHIBIT 2 95 95
9 Q. Is it okay if I call you Tom?
9 PLAINTIFFS' EXHIBIT 3 103 104
10 A. Do what?
PLAINTIFFS' EXHIBIT 4 103 106
10 11 Q. Is it okay if I call you Tom?
11 *** 12 A. Sure.
12 13 Q. Tom, I'm Brian Sullivan. We met a
13 14 few minutes ago.
14 15 A. Fine.
15 16 Q. I represent the plaintiffs in a
16 17 series of different actions involving Waite
17 18 Schneider and Stan Chesley and you.
18 19 A. Right.
19 20 Q. Are you still a lawyer licensed by
20
21 the State of Ohio?
21
22 A. Correct.
22
23 23 Q. All right. Have you been a lawyer
24 24 continuously since your bar passage back in
25 25 1954, I think it was?

Page 2 Page 4

1 APPEARANCES: 1 A. Correct.
2 On behalf of the Plaintiffs:
3 Dinsmore & Shohl, LLP 2 Q. Okay. Are you currently employed?
4 By: Brian S. Sullivan, Esq. 3 A. Yes, I guess. I'd say, yes.
1900 First Financial Center
5 255 East Fifth Street 4 Q. Okay. Who is your employer?
Cincinnati, Ohio 45202 5 A. Waite, Schneider, Bayless &
6 513.977.8200
[email protected] 6 Chesley.
7 7 Q. What is it you do at Waite,
and
8 8 Schneider, Bayless & Chesley?
Angela M. Ford, Esq. 9
9 Chevy Chase Plaza
A. Well, general running the firm now
836 Euclid Avenue, Suite 311 10 because I'm the only attorney there, so I
10 Lexington, KY 40502
859-268-2923
11 pretty much do everything, and settle cases,
11 [email protected] 12 and I do probate work, real estate work. I'm
12
On behalf of the Defendant
13 not in litigation that much. I haven't been
13 Stanley M. Chesley: 14 for years now.
14 Frost Brown Todd LLC
15 By: Vincent E. Mauer, Esq. 15 Q. Let me ask you, how many employees
3300 Great American Tower 16 are there now at Waite Schneider?
16 301 East Fourth Street
Cincinnati, Ohio 45202 17 A. Just four, including Stanley.
17 513.651.6800 18 Q. Okay. So it's you?
[email protected]
18 19 A. Steve Horton (sic).
19 On behalf of the witness: 20
20 Q. He's the accountant?
Cohen, Todd, Kite & Stanford, LLC
21 By: Donald J. Rafferty, Esq. 21 A. Accountant.
250 East Fifth Street
22
22 Q. Okay.
Suite 2350
Cincinnati, Ohio 45202 23 A. And Melissa Hoover, who's the
23 513.421.4020
[email protected]
24 secretary.
24 25 Q. All right. And the fourth one is
25 ***

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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 Stan Chesley? 1 derived from your efforts at Waite Schneider or

2 A. Right. 2 somebody else?
3 Q. What does Stan Chesley do for 3 A. Someone else.
4 Waite Schneider today? 4 Q. Okay. Who would that person be
5 A. Not much. He does mostly for 5 who generates income for the law firm today?
6 Jewish foundation and then that sort of thing. 6 A. Well, it's happened in the past.
7 I understand he's teaching a -- some kind of 7 Some of the people are no longer with the firm
8 class at UC now, too. 8 and they've gone off and founded their own, but
9 Q. Does Stan -- 9 they're still working on the cases that they
10 A. Not legal. So self-improvement. 10 had with us.
11 Q. Does Stan regularly come to the 11 Q. Okay. Tom, my apology. We have a
12 office? 12 disconnect.
13 A. He's there every day just about. 13 MR. RAFFERTY: Yeah, I was going to
14 Q. And he takes phone calls at the 14 say, I don't think it's clear.
15 office, I assume? 15 BY MR. SULLIVAN:
16 A. Yes. 16 Q. I'm going to get in a minute the
17 Q. And the secretary works for him at 17 prior work done by other lawyers that still
18 the office, I assume? 18 brings in money.
19 A. Yeah. She does letters for him 19 MR. RAFFERTY: Just one second.
20 primarily, yeah. 20 (Off the record.)
21 Q. Okay. Let me finish my question, 21 BY MR. SULLIVAN:
22 if you would. I'm going to let you finish your 22 Q. Okay. Before we took a quick
23 answer, and I'll do my best on that regard. 23 break to learn the Court of Appeals overruled
24 Okay? 24 your motion for stay, my question relates
25 Does Stan use the secretary for work 25 currently to income that's generated from work

Page 6 Page 8

1 when he comes to the office? 1 done presently.

2 A. Yes. 2 Do you or anyone else at Waite
3 Q. Okay. Is some of Stan's work that 3 Schneider do work that generates income
4 he does right now for Waite Schneider, does it 4 presently for the law firm?
5 involve collecting monies that are owed to the 5 A. I do.
6 law firm? 6 Q. Okay. And when money comes in for
7 A. No. 7 work you do, who gets that money?
8 Q. Okay. Would you agree with me 8 A. Waite, Schneider, Bayless &
9 that there is an income stream that comes in to 9 Chesley.
10 Waite Schneider today? 10 Q. And then who shares in that once
11 A. Correct. 11 it comes into Waite, Schneider, Bayless &
12 Q. And that income stream relates to 12 Chesley?
13 cases that Waite Schneider has been involved in 13 A. We're paying our bills and
14 over the years, correct? 14 liquidating.
15 A. Correct. 15 Q. Let me ask it this way, Tom. If
16 Q. Does Waite Schneider have any 16 you do work today and someone writes a check to
17 current active cases where income is brought 17 Waite Schneider for the payment of legal
18 into the law firm? 18 services, does Stan Chesley get any part of
19 MR. RAFFERTY: Objection. 19 that income that's brought into the law firm?
20 Go ahead, if you know. 20 A. I don't believe so.
21 THE WITNESS: Huh? 21 Q. Okay.
22 MR. RAFFERTY: I said, objection. 22 A. Not the stuff that I've done.
23 A. I'm sure, yes. 23 Q. All right. You were served with a
24 BY MR. SULLIVAN: 24 subpoena in this case?
25 Q. And is that current income stream 25 A. Correct.

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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 Q. And I understand you didn't get a 1 Q. Tom, I'm going to go through

2 chance to read it when the process server gave 2 these -- but hold on -- what's been marked as
3 it to you, right? 3 production from page 1 to apparently page 424.
4 A. Right, yeah. 4 A. Wow.
5 Q. You've since read the subpoena? 5 Q. Okay. Were you involved in
6 A. No, I've never seen it. 6 gathering these documents?
7 Q. You've never seen it. Okay. I'm 7 A. No.
8 going to show it to you, then, for the first 8 Q. Who was from Waite Schneider?
9 time. 9 A. Steve, our accountant, and I guess
10 MR. RAFFERTY: Well -- 10 Melissa, and counsel, I suppose.
11 (Plaintiffs' Exhibit 1 was marked for 11 Q. All right. Do you know if Stan
12 identification.) 12 Chesley was involved in --
13 BY MR. SULLIVAN: 13 A. No, I don't know.
14 Q. Tom, I'm going to hand you 14 Q. Okay. So if I asked you which of
15 Exhibit 1. 15 these documents relate to which of these nine
16 MR. RAFFERTY: May I? 16 categories I've asked, I take it you would not
17 MR. SULLIVAN: You may. 17 be able to answer that question, correct?
18 MR. RAFFERTY: Tom, I think what he's 18 A. Correct, yes.
19 going to -- 1 through 9 list on page 2. You don't 19 Q. All right.
20 want him to read Rule 45, do you? 20 MR. RAFFERTY: Brian, if I may, I
21 MR. SULLIVAN: Not particularly. 21 marked on that yellow tab on that front cover 25
22 MR. RAFFERTY: These are the list 22 and 47. That's because there were -- when my
23 document requests that we discussed. 23 assistant duplicated, there were documents that
24 THE WITNESS: What are these? 24 were inadvertently included at 25 and 47, and so
25 MR. RAFFERTY: The document requests. 25 they were pulled out because they weren't to be

Page 10 Page 12

1 THE WITNESS: By whom? By him? 1 included.

2 MR. SULLIVAN: They're by me. 2 MR. SULLIVAN: Oh, so there is no 25
3 MR. RAFFERTY: By him to you that we 3 and 47?
4 went through. 4 MR. RAFFERTY: Right. You're going
5 THE WITNESS: Oh, okay. Yeah. 5 to see a skip, and that's why.
6 MR. SULLIVAN: Let the record reflect 6 MR. SULLIVAN: Okay. All right.
7 the witness has spent a few minutes looking at 7 We're going to look through these, but let me keep
8 page 2 of Exhibit 1, which are nine categories of 8 asking some questions.
9 documents. 9 BY MR. SULLIVAN:
10 BY MR. SULLIVAN: 10 Q. You are familiar with the case
11 Q. Tom, my question to you is, did 11 that settled last September involving Alan
12 you bring any pieces of paper with you today? 12 Davis?
13 A. No. 13 A. Yes.
14 MR. RAFFERTY: Just a second. I did. 14 Q. And you're aware that there was a
15 BY MR. SULLIVAN: 15 settlement in favor of Waite, Schneider,
16 Q. I guess I should have asked, did 16 Bayless & Chesley?
17 you or your lawyer bring any documents today? 17 A. Right.
18 A. He says we have. 18 Q. Do you know how much the case
19 MR. SULLIVAN: Okay. You put 19 settled for?
20 those on the table here, and I assume this is a 20 A. I should. I signed the papers. I
21 copy for me? 21 think it was 5 million. Yeah, around 5
22 MR. RAFFERTY: Yes. I'm going to 22 million.
23 make a note on a yellow sticky. 23 Q. Okay. Were you at the trial?
24 MR. SULLIVAN: Okay. 24 A. No.
25 BY MR. SULLIVAN: 25 Q. Is it fair to say, Tom, that Stan

Page 11 Page 13

4 (Pages 10 to 13)
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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 Chesley and Marion Little negotiated that 1 A. '13, yes.

2 settlement? 2 Q. Okay. Since then, would you agree
3 A. Marion Little did, yes. Stan, of 3 with me that Stan Chesley has been paid money
4 course, was there because he knew all the 4 from Waite Schneider since he signed a Wind-Up
5 background, et cetera. 5 Agreement?
6 Q. Do you know where that $5 million 6 A. Well, I'm sure -- I'm sure there's
7 went? 7 been some payments to him that he's requested.
8 A. Well, some of it went to our 8 He was on the Fifth Third loan as well as
9 retirement program. I think a couple million 9 Waite, Schneider, Bayless & Chesley, and when
10 of it had not been completed and we wanted to 10 the -- I forget words -- the --
11 complete it and make sure that everyone was 11 THE WITNESS: What was the case
12 paid. And some of it went to that, I think a 12 for 15 million that we settled?
13 couple million. 13 MR. RAFFERTY: May I?
14 I worked with Steve Rogers (sic) 14 MR. SULLIVAN: Sure.
15 on the exact figures, et cetera. And what 15 MR. RAFFERTY: Fannie Mae.
16 other bills were paid -- other bills were paid, 16 A. Yeah. Fannie Mae, that those
17 too, but I'm not sure what. 17 funds went to Stanley as part of it as well as
18 Q. Since the settlement in the Davis 18 to Waite, Schneider, Bayless & Chesley.
19 case -- which I'll represent to you was last 19 BY MR. SULLIVAN:
20 September, if that helps you at all? 20 Q. All right. So since the Wind-Up
21 A. No. 21 Agreement --
22 Q. Okay -- have any disbursements of 22 A. Yeah.
23 money been paid out of Waite Schneider to Stan 23 Q. -- you're telling me that the
24 Chesley? 24 Fannie Mae settlement, as the funds came in,
25 A. I don't know. I may have signed 25 some went to Stan as income to him and some

Page 14 Page 16

1 something, but I sign a lot of stuff. 1 went to Waite Schneider?

2 Q. If you don't know the answer to 2 MR. RAFFERTY: Objection. I don't
3 that question, who would know the answer? 3 think that's what he said.
4 A. Steve Rogers. 4 A. In other words, he owned part of
5 MR. RAFFERTY: Steve Horner. 5 the Fifth Third $15 million note and the firm
6 A. Steve Horner. Excuse me. 6 owned part of it, and so that's where the funds
7 BY MR. SULLIVAN: 7 went to both.
8 Q. So if we were looking to see where 8 BY MR. SULLIVAN:
9 approximately $3 million went, if your 9 Q. Okay. That's my bad. So you're
10 testimony is several -- 2 million or so went 10 telling me, to extinguish the debt --
11 for the retirement, Steve Horner would know the 11 A. Right.
12 answer to that question? 12 Q. -- at Fifth Third, of which --
13 A. Yes, he would. 13 A. Correct.
14 Q. And you do not, as you sit here 14 Q. -- he was --
15 today? 15 A. Co.
16 A. No. I'm sure I signed the checks 16 Q. -- a signer --
17 and what have you, but, you know, I don't have 17 A. Right.
18 any record of that. 18 Q. -- Waite Schneider was a signer --
19 Q. Okay. All right. Since -- you're 19 A. Right.
20 familiar with the Wind-Up Agreement? 20 Q. -- to extinguish that joint
21 A. The line up agreement? 21 obligation, the Fannie Mae funds were used to
22 Q. Wind-up. 22 do that?
23 A. Yeah. 23 A. Right, yeah.
24 Q. Okay. And that's back in April of 24 Q. Okay. All right. In addition to
25 2013? 25 helping resolve that debt, can you tell me what

Page 15 Page 17

5 (Pages 14 to 17)
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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 other monies have been paid to Mr. Chesley 1 sense of how much money Waite Schneider's paid
2 since April of 2013? 2 him since he signed the Wind-Up Agreement?
3 A. I think you'd have to talk to 3 A. It was something involved the
4 Rogers because -- or, excuse me -- Horner -- I 4 airplane, around a million dollars, I think,
5 don't know where Rogers got in here -- to 5 but I don't know whether that was what you're
6 Horner because, you know, he's -- I've signed 6 talking about or not.
7 the checks he's asked me to sign, and I don't 7 Q. Sir, I'm not familiar. What is
8 have a list of them or anything. 8 the airplane issue you're talking about?
9 Q. Who tells Horner who gets paid? 9 A. We were trying to get rid of the
10 A. Well, he asks me. 10 airplane, I think. And I remember a $1 million
11 Q. All right. Do you recall if he 11 figure to get rid of it.
12 asked you if it was okay to pay Stanley Chesley 12 Q. So --
13 money? 13 A. And it was in Stan's name, the
14 A. Sometimes. 14 plane, of course.
15 Q. I assume when Mr. Horner would 15 Q. So there was an airplane that Stan
16 make that request of you, since April of 2013, 16 owned himself?
17 you would answer yes, it was okay to pay Stan 17 A. Well, he used it for the company
18 Chesley money? 18 and it was in his name, yeah.
19 A. Most of the time. Although, on 19 Q. Okay. And the plane was sold?
20 the retirement business, Stanley didn't want to 20 A. Right.
21 complete payment on that, and my advice and the 21 Q. And the proceeds were given to
22 advice of our counsel was that we had to do 22 Stan?
23 that. And so we turned Stanley's request down 23 MR. RAFFERTY: No.
24 for some funds and paid that -- paid the 24 BY MR. SULLIVAN:
25 complete -- completely paid all the employees 25 Q. Is that what you're telling me?

Page 18 Page 20

1 their -- what was due them under the retirement 1 A. I don't know whether that's
2 program. 2 correct or not.
3 Q. Okay. So is it fair to say, from 3 Q. Okay. To back up, at least you're
4 what you're telling me, that at least in one 4 aware there was an airplane, somehow Stan had
5 instance Stan made a request -- 5 an ownership interest?
6 A. Yeah. 6 A. Correct.
7 Q. -- as to where money should go? 7 Q. I assume that Waite Schneider paid
8 A. Right. 8 the maintenance expenses on the airplane?
9 Q. And you used your authority -- 9 MR. RAFFERTY: Objection.
10 A. Right. 10 A. Yes.
11 Q. -- to direct the funds to the 11 BY MR. SULLIVAN:
12 completion, fulfillment of the retirement plan? 12 Q. And when the airplane was sold
13 A. Right. 13 sometime since 2013, is it your testimony that
14 Q. Any other instance where you can 14 the proceeds of the sale of the airplane went
15 recall where you disagreed with Stan and his 15 to Stan?
16 request for money? 16 MR. RAFFERTY: I'm -- hold on. I'm
17 A. No, I can't remember -- I don't 17 going to object because I don't think he said it
18 recall anything else. 18 was sold since 2013, and I don't believe it was
19 Q. Okay. Would it surprise you, Tom, 19 sold since 2013. I don't remember. Angela's seen
20 that in 2014 Waite Schneider paid Stan in 20 it because it's in interrogatory responses from
21 excess of $1 million? 21 Stan. I don't remember the dates, but that's not
22 A. What for? I don't know. 22 what Tom testified about.
23 Q. I don't know the answer to that 23 BY MR. SULLIVAN:
24 either. That's going to be my question to you. 24 Q. Okay. Tom, one thing, as a
25 I'm just trying to get an idea if you have a 25 lawyer, I'm sure you know the ground rules

Page 19 Page 21

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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 here. If you do not understand a question, you 1 from Fifth Third to --

2 just tell me, okay, and I'll rephrase it. 2 THE WITNESS: Is it Winter?
3 A. Uh-huh. 3 A. I can't think of the name right
4 Q. I want to make sure you understand 4 now.
5 the question when I ask it. Okay? That's 5 BY MR. SULLIVAN:
6 important. 6 Q. Unfortunately, Don's not under
7 And I apologize if I was mistaken. 7 oath, but I do appreciate his help.
8 If you don't know when the plane was sold, then 8 A. Well, I can't -- I can remember
9 just tell me that. 9 Lana Turner's name but not the name of the
10 A. Yeah, I do not. Steve would. 10 actress that I saw last weekend in a movie. I
11 Q. Okay. So in addition to the 11 mean, I'm going to be 87 the 1st of April, and
12 airplane, which we'll set aside for a second, 12 that's --
13 and I'm trying to figure out how much money 13 Q. Okay. I know you're doing the
14 Waite Schneider paid to Stan since he signed 14 best you can.
15 the Wind-Up Agreement. 15 MR. SULLIVAN: What's the name of the
16 A. Yeah. 16 bank?
17 Q. I'm told, Tom, that you're the guy 17 MR. RAFFERTY: I think when you say
18 that would know the answer to that question. 18 Winter, you're saying it's North Side.
19 A. No. 19 THE WITNESS: North Side Bank. Yeah.
20 MR. RAFFERTY: By whom were you told 20 A. Okay. I know the bank, but I just
21 that? 21 can't think of that offhand.
22 BY MR. SULLIVAN: 22 BY MR. SULLIVAN:
23 Q. You're not the guy? 23 Q. All right. So let's back up.
24 A. I probably signed the checks, but 24 Would you agree with me, Tom, that since --
25 Steve is the one who would have a record of 25 A. Yeah.

Page 22 Page 24

1 what went to him. I don't have a record. 1 Q. -- 2013, April 2013, Stan had for
2 Q. All right. And would it be fair 2 some period of time the ability to sign a check
3 to say that Stan would tell Steve how much 3 on Waite Schneider's account?
4 money should be paid? 4 A. I don't know that.
5 A. Right. And Steve would ask me if 5 Q. Okay. I think what you're telling
6 that was correct to do. 6 me is, currently Waite Schneider's account is
7 Q. Right. So Stan would ask Steve, 7 at North Side Bank & Trust?
8 write -- authorize a check for X amount of 8 A. (Nodding head.)
9 dollars to me, Stan Chesley? 9 Q. Is that yes?
10 A. Right, yeah. 10 A. Yes.
11 Q. Steve would bring it to Tom Rehme? 11 Q. And are you telling me that Stan
12 A. Right. 12 does not have the authority to sign a check on
13 Q. Tom Rehme would authorize it? 13 the North Side Bank & Trust account --
14 A. Right. 14 A. Correct.
15 Q. And that practice has continued 15 Q. -- maintained by Waite Schneider?
16 since 2013? 16 A. Correct.
17 A. Correct. 17 Q. Who all currently has the ability
18 Q. Through the present? 18 to sign checks for North Side's account for
19 A. Correct. 19 Waite Schneider?
20 Q. All right. Does Stan still have 20 A. Me.
21 the authority to sign checks on Waite 21 Q. You're the only one?
22 Schneider's account? 22 A. I think so.
23 A. No. He does not. 23 Q. Okay. And do you know, since you
24 Q. Do you know when that stopped? 24 opened the North Side account, have you signed
25 A. Well, we changed banks and went 25 checks to Stan that Steve Horner's brought to

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Abbott, Mildred, et al. v. Chesley, Stanley M., et al. Thomas F. Rehme, Esq.

1 you for signature? 1 A. Right.

2 A. I don't remember that. 2 Q. That's why I keep using it. Okay.
3 Q. Do you know when you switched the 3 Would you agree with me that in the months
4 account to North Side Bank & Trust? 4 leading up to that document, Stan Chesley put
5 A. I don't remember that either. I 5 money into Waite Schneider before he signed the
6 don't know. 6 Wind-Up Agreement?
7 Q. Do you know who was the financial 7 MR. RAFFERTY: Is he aware that he
8 institution Waite Schneider used before North 8 did that?
9 Side Bank & Trust? 9 BY MR. SULLIVAN:
10 A. Fifth Third, I believe. 10 Q. Are you aware of that?
11 Q. All right. Other than North Side 11 A. No.
12 Bank & Trust, where else does Waite Schneider 12 Q. Okay. So if I told you that over
13 have an account today? 13 a period of months before April of 2013 Stan
14 A. I don't know of any other. 14 Chesley put $59 million in Waite Schneider's
15 Q. North Side is the only one you're 15 account, you would have no knowledge of that as
16 aware of? 16 you sit here today?
17 A. Correct. 17 A. True. I would not.
18 Q. And other than North Side Bank & 18 Q. All right. Stan Chesley never
19 Trust and Fifth Third Bank, since 2013, are you 19 told you that he was doing that; is that right?
20 aware of any other financial institution that 20 A. No, he never did.
21 Waite Schneider used? 21 MR. RAFFERTY: Objection.
22 A. No, I am not. 22 BY MR. SULLIVAN:
23 Q. Okay. Are there currently any 23 Q. Do you regularly talk to Stan?
24 outstanding obligations to Fifth Third by Waite 24 A. Sure.
25 Schneider? 25 Q. Did you talk to him today?

Page 26 Page 28

1 A. Not that I know of. 1 A. No. I didn't see him today.

2 Q. Are there any obligations to any 2 Q. Okay. But you normally talk to
3 financial institution today where Waite 3 him every day?
4 Schneider is the obligor? 4 A. That he's in the office.
5 A. I don't think so. 5 Q. Okay. I think you told me earlier
6 Q. Are there any loans currently 6 he's in the office every day, and I assume
7 outstanding where Stan Chesley is also a 7 you're in the office every day?
8 cosigner on the loan along with Waite 8 A. Yeah.
9 Schneider? 9 Q. So you see each other every day?
10 A. I don't believe so. 10 A. Right.
11 Q. Would the payments to Stan Chesley 11 Q. Do you know since April of 2013 if
12 since April 2013, would those be -- are they 12 Waite Schneider has made any payments to any of
13 categorized or summarized somewhere that I can 13 Stan Chesley's family members?
14 look at, maybe in this stack of paper, if I 14 A. Well, his wife, Susan.
15 wanted to find those? 15 Q. Do you know why Waite Schneider
16 A. Steve has a record of it all. So 16 was paying money to Susan Dlott?
17 I don't know whether -- are they in there? I 17 A. Yeah. Because she loaned money to
18 don't know. 18 the firm when we didn't have enough money to
19 MR. RAFFERTY: Well, they didn't ask. 19 pay our bills.
20 There was no request for that. 20 Q. Do you know how much you paid her?
21 THE WITNESS: Okay. 21 A. I think it was around a half a
22 BY MR. SULLIVAN: 22 million.
23 Q. Since April 2013 -- I'm going to 23 Q. Do you know when Susan Dlott
24 back up before that. You know that's the 24 loaned Waite Schneider approximately half a
25 Wind-Up Agreement date? 25 million dollars?

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1 A. No, I don't know the date. You'd 1 Q. Yes.

2 have to go to Steve. 2 A. Yes. No.
3 Q. And I'm not going to ask for the 3 Q. Okay. I don't know all of his
4 particular date, I'll get that from Steve, but 4 family members, but anybody else that you are
5 do you know the year? Was it after the Wind-Up 5 aware of that payments have been made to Stan's
6 Agreement? 6 family members?
7 A. Yeah, I think so. 7 A. No, don't know of any other.
8 Q. Okay. And then I assume sometime 8 Q. Okay. Would you agree with me,
9 after the Wind-Up Agreement and before today, 9 Tom, that since April of 2013, Waite Schneider
10 Waite Schneider paid her that money back? 10 has paid legal bills for the lawyers that have
11 A. Correct. 11 represented Stan Chesley in various matters?
12 Q. All right. Is there a note or any 12 A. I don't know that.
13 written instrument that indicates that the loan 13 Q. So if I asked you why Waite
14 was made? 14 Schneider is paying for Stan's lawyers, you
15 A. I haven't seen it if there is one. 15 would not be able to give me a reason; is that
16 Q. Do you know if you paid her 16 fair?
17 interest on this note? 17 A. No. Yes, I can't give you a
18 A. No interest. 18 reason.
19 Q. Do you know how long the note was 19 Q. Sir, are you aware of anything
20 outstanding from the time she loaned the law 20 about an auction of cars over the last, say,
21 firm $500,000 till the time she got paid back? 21 seven or ten days?
22 MR. RAFFERTY: Object. He said he 22 A. I understand some of the cars have
23 didn't know when the loan was paid. 23 been auctioned off, correct.
24 A. I do not know. 24 Q. Who was the owner of those
25 BY MR. SULLIVAN: 25 vehicles that were auctioned off?

Page 30 Page 32

1 Q. Any other payments since April 1 A. They were titled in Waite,

2 of 2013 that Waite Schneider has made to 2 Schneider, Bayless & Chesley.
3 Susan Dlott? 3 Q. So why did Waite, Schneider,
4 A. That's the only one I know about. 4 Bayless & Chesley auction off cars in the last
5 Q. I take it the person who would 5 seven to ten days?
6 know the most information would be Mr. Horner? 6 A. Well, we're liquidating assets as
7 A. Right. 7 part of the trim down.
8 Q. Okay. Do you know if there -- 8 Q. I'm going to ask you more about
9 payment's been made by Waite Schneider to any 9 that. Let me back up, though. Why is it that
10 other family member of Mr. Chesley since April 10 Waite Schneider owns vehicles?
11 '13? 11 A. Some of the vehicles about -- I
12 A. Not to my knowledge, no. 12 don't know, a certain number, were given to
13 Q. Do you recognize his daughter 13 Susan as collateral for the
14 Lauren Chesley? Do you know that name? 14 half-a-million-dollar loan she made to the
15 A. Yeah. I think that's his oldest 15 firm, and then when she was paid back, the
16 daughter. 16 vehicles then were transferred back into Waite,
17 Q. Do you know if Waite Schneider has 17 Schneider, Bayless & Chesley. And then we're
18 paid any money to Lauren Chesley since April 18 going to liquidate all those, as I understand,
19 2013? 19 piece by piece depending on the market. I
20 A. I do not know that. 20 signed an agreement with somebody in Mid-Ohio
21 Q. I take it, then, obviously you 21 who are doing the auctioning.
22 would have no knowledge as to what was 22 Q. I appreciate that. But I'm really
23 happening if you don't even know that that 23 focused on one question before that. Why is it
24 occurred; fair? 24 Waite Schneider, a law firm, owns vehicles?
25 A. With Lauren? 25 MR. RAFFERTY: Objection.

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1 A. They were all Stanley's 1 MR. RAFFERTY: Objection.

2 originally, and they were transferred to the 2 A. He probably did at one point.
3 firm. 3 BY MR. SULLIVAN:
4 BY MR. SULLIVAN: 4 Q. Has the auction actually taken
5 Q. And would you agree with me, Tom, 5 place?
6 that Stanley was involved in the decision that 6 A. I understand that it has. Not all
7 the vehicles would be auctioned? 7 of the cars, but a portion of the cars.
8 A. Yes. 8 Q. How many cars were sold at the
9 Q. Would you agree with me that 9 auction?
10 Stanley is the person who arranged for the 10 A. Don't know that.
11 auction facility to sell the vehicles and then 11 Q. When was the auction?
12 you signed the paperwork? 12 A. Don't know that.
13 A. I signed the agreement, yes. I 13 Q. How much money was made from the
14 don't know whether he did that or not. 14 sale of the cars?
15 Q. Okay. And these are some cars 15 A. Don't know that.
16 that were auctioned in the last seven to ten 16 MR. RAFFERTY: Objection.
17 days that used to be housed at his property on 17 BY MR. SULLIVAN:
18 Camargo Road, right? 18 Q. Would Stan know the answer to
19 MR. RAFFERTY: Objection. 19 those questions, do you know?
20 A. I don't know that. I don't know 20 A. I would think.
21 where they were housed. He has a warehouse in 21 Q. Would Steve Horner know the answer
22 Milford and -- where he keeps cars in different 22 to those questions?
23 locations. 23 A. Yes, he would.
24 BY MR. SULLIVAN: 24 Q. Just so I have some idea, do you
25 Q. So if I'm -- you help me if I'm 25 know how many cars Waite Schneider has title to

Page 34 Page 36

1 not understanding this. At one point Stan 1 before this auction, how many different cars?
2 bought the cars? 2 A. No, I don't know the number.
3 A. Right. 3 Q. You don't know, then, how many
4 Q. Transferred the title to Waite 4 cars are left in Waite Schneider's inventory
5 Schneider, right? 5 after the auction?
6 A. (Nodding head.) 6 A. No, I do not.
7 MR. RAFFERTY: Objection. 7 Q. And do you have an idea of what's
8 BY MR. SULLIVAN: 8 going to happen to the money that's generated
9 Q. You have to say yes or no. 9 from the sale of the cars?
10 MR. RAFFERTY: If you know. You 10 A. Well, I hope it's going to be
11 don't have to say yes or no. You can say I don't 11 deposited into Waite, Schneider, Bayless &
12 know if you don't know. 12 Chesley, and maybe it has. I don't know.
13 A. Yeah, I'm not sure. 13 Steve would know.
14 BY MR. SULLIVAN: 14 Q. Okay. Has Waite Schneider
15 Q. All right. But somehow Waite 15 recently, other than the cars, disposed of any
16 Schneider became the owner of all these 16 other assets belonging to it?
17 vehicles, some of which have been auctioned? 17 A. Belonging to who?
18 A. Some vehicles. 18 Q. To Waite Schneider.
19 Q. Okay. And some have been 19 MR. RAFFERTY: Objection. I'm not
20 auctioned recently? 20 even sure what that means.
21 A. Right. 21 A. I don't understand the question.
22 Q. And these vehicles, I assume, were 22 BY MR. SULLIVAN:
23 cars that Stan or somebody in his family would 23 Q. Okay. I'm interested in the
24 drive? 24 assets that Waite Schneider owns.
25 A. I don't -- 25 A. Which?

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1 Q. The assets -- 1 Chesley in 2015?

2 A. The which -- that Waite Schneider 2 A. No.
3 owns, is that what you said? 3 Q. Who prepares the taxes for Waite,
4 Q. Yes. You told me one of those is 4 Schneider, Bayless & Chesley?
5 some vehicles that Waite Schneider had the 5 A. I guess our accountants.
6 title to. 6 Q. Who are they?
7 A. Correct. 7 A. I can't remember the name.
8 Q. Now, my question is, what other 8 Q. Do you review the tax returns
9 assets does Waite Schneider own? 9 before they're filed with the IRS?
10 A. Beyond automobiles? 10 A. No, I haven't.
11 Q. Correct. Beyond the cars. 11 MR. RAFFERTY: Objection.
12 A. I don't know. 12 A. I have not, no.
13 MR. RAFFERTY: Are you referring to 13 BY MR. SULLIVAN:
14 hard assets? 14 Q. All right. Who at Waite
15 MR. SULLIVAN: Well, I guess I could 15 Schneider, if anybody, reviews the tax returns?
16 break it down if -- I didn't know that I needed 16 A. Steve.
17 to. But if there's some confusion, I'm happy 17 Q. Anybody else?
18 to -- 18 A. No, I don't think so. No. There
19 A. Furniture. 19 is no one else except Stanley, and I know he
20 BY MR. SULLIVAN: 20 didn't do it.
21 Q. The problem is, Tom, I don't know 21 Q. Would you be able to provide any
22 what all the assets are, so it's hard for me to 22 explanation to me, as we sit here today, why in
23 quantify them. 23 2013, for the calendar year 2013, Stan Chesley
24 A. I don't know of anything other 24 was listed as the sole shareholder of Waite,
25 than the furnishings in the firm itself. 25 Schneider, Bayless & Chesley?

Page 38 Page 40

1 Q. Okay. And would you agree that 1 MR. RAFFERTY: In what? Listed
2 some of the furnishings in the firm belong to 2 where?
3 Stan Chesley? 3 MR. SULLIVAN: On the tax return.
4 MR. RAFFERTY: Objection. 4 MR. RAFFERTY: Objection.
5 If you know. 5 A. It was a mistake.
6 A. I don't know that. I think we 6 MR. RAFFERTY: He just said he
7 always signed an agreement that they belong to 7 doesn't do the taxes.
8 the firm, the furniture that we were using. 8 A. I think it was a mistake. A
9 BY MR. SULLIVAN: 9 couple of times he signed -- after the
10 Q. Okay. In 2016 -- so we're not 10 agreement in '13, he signed a few things by
11 quite 90 days into this year -- has Waite 11 mistake, you know. He thought he was still
12 Schneider paid any money to Stan Chesley? 12 Mr. President.
13 A. I don't know. Steve would know. 13 BY MR. SULLIVAN:
14 Q. Okay. And if I wanted to find the 14 Q. Still in charge, huh?
15 accounts which would help me answer that 15 A. Yeah, right.
16 question, would I look at the North Side Bank & 16 Q. So you would not -- other
17 Trust account? 17 than think it might be a mistake, if on
18 MR. RAFFERTY: Account in terms of 18 December 31st he's listed on the federal tax
19 bank account? 19 return as the sole shareholder of Waite,
20 MR. SULLIVAN: Yeah. 20 Schneider, Bayless & Chesley --
21 A. Yeah, that would be it. 21 A. Yeah, that would be a mistake.
22 BY MR. SULLIVAN: 22 Q. That would be a mistake?
23 Q. Okay. I asked you this in 2014. 23 A. Right.
24 So I'm going to ask you in 2015. Do you know 24 MR. RAFFERTY: I'll object. I think
25 how much money Waite Schneider paid to Stan 25 what Tom said is, he doesn't do the tax returns,

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1 hasn't reviewed them. I don't know that he's 1 A. Yeah.

2 testified he's a tax lawyer or tax accountant. 2 Q. I'm just now trying to step back a
3 BY MR. SULLIVAN: 3 minute and ask more generally, did he ever
4 Q. Okay. Let me switch gears. But I 4 discuss with you --
5 do want to remind you, Tom, if you want to take 5 A. No.
6 a break at any time, you just let me know, and 6 Q. -- that he's signing documents on
7 we'll take a break. Okay? But I wanted to 7 behalf of the entity?
8 make sure I told you that. 8 A. No.
9 You mentioned just a minute ago there 9 Q. Tom, I'm going to ask you about
10 were some documents that Stanley signed after the 10 the Wind-Up Agreement. Do you remember the
11 Wind-Up Agreement. I want to ask you about those. 11 discussions you had with Stan Chesley about the
12 You're probably familiar that in January of 2014 12 Wind-Up Agreement before it was signed?
13 he signed a document where he indicated he was the 13 MR. RAFFERTY: Objection.
14 sole member of the board of directors of Waite, 14 A. Not really.
15 Schneider, Bayless & Chesley. 15 BY MR. SULLIVAN:
16 A. Yeah. I understand that he did 16 Q. Okay.
17 that, yeah. 17 A. Other than he asked me if I would
18 Q. Okay. Is it your testimony that 18 do it.
19 that was a mistake? 19 Q. Are you getting paid to wind up
20 A. Correct. 20 the affairs of Waite, Schneider, Bayless &
21 Q. All right. Do you know if 21 Chesley?
22 anything has been done to correct the mistake 22 A. In a sense, yes.
23 where he represented in a document that he was 23 Q. How so?
24 the sole member in January 2014? 24 A. Well, I have an office and I have
25 MR. RAFFERTY: Objection. 25 a garage space and insurance, et cetera. No

Page 42 Page 44

1 A. I don't know what the document 1 salary.

2 was, frankly, at this point. I don't -- I 2 Q. All right. So providing some
3 don't recall that. But I'm not sure it was 3 benefit in terms of office, secretarial
4 necessary to correct anything. 4 support, I guess, and parking space?
5 BY MR. SULLIVAN: 5 A. Right, right.
6 Q. All right. I'll see if I can find 6 Q. You get --
7 that. It might even be here. I'll see if I 7 A. Melissa helps me with probate work
8 can find that for you. 8 and what have you.
9 Did you have any discussions with 9 Q. Okay. But you're not taking any
10 Stan Chesley about why he was signing documents on 10 income in terms of a salary --
11 behalf of Waite, Schneider, Bayless & Chesley -- 11 A. No.
12 A. No. 12 Q. -- or anything like that?
13 Q. -- after the Wind-Up Agreement? 13 A. No.
14 A. I did not, no. 14 Q. You are familiar with what we call
15 Q. Did you even know at the time that 15 the transfer order? And if you're not familiar
16 he was signing such documents on behalf of the 16 with it, I'll describe it for you. It's an
17 law firm? 17 order from Judge Schrand in Kentucky that was
18 MR. RAFFERTY: Objection. 18 in June of 2015 that he ordered that Stan
19 A. I'm not sure what documents you're 19 Chesley direct you to turn monies over to
20 talking about. 20 Angela Ford and her clients. Are you aware of
21 BY MR. SULLIVAN: 21 that order?
22 Q. Okay. I'll see if I can find the 22 A. I think so.
23 one that's an agreement where it mentioned that 23 Q. All right. Have you turned over
24 he was the sole member of the board of 24 any money?
25 directors. 25 A. No.

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1 Q. Okay. Has Stan told you not to 1 Q. Are you telling me that the
2 spend any money or turn over any money to 2 retirement account was underfunded that you've
3 Angela Ford? 3 now made whole by funding it with the Fannie
4 A. I don't think he has, but I would 4 Mae settlement?
5 not. We're not a party to anything in 5 A. Correct.
6 Kentucky. 6 MR. RAFFERTY: Objection.
7 Q. I appreciate that. My question, 7 BY MR. SULLIVAN:
8 though, is, what did Stan tell you? 8 Q. Is there any other monies owed to
9 MR. RAFFERTY: Well, he said he 9 the retirement account for those employees?
10 hasn't. 10 A. I understand not.
11 A. I don't think he mentioned it to 11 Q. Okay. So there is no plan to pay
12 me. I know Steve did. 12 any more money into the retirement account?
13 BY MR. SULLIVAN: 13 A. No.
14 Q. Okay. All right. We'll look at 14 Q. All right. I assume today that
15 that here in a minute. 15 Waite Schneider gets money from cases that
16 MR. SULLIVAN: Give me a second, Don, 16 existed before the Wind-Up Agreement?
17 I'm going to look at these documents. 17 A. Right.
18 BY MR. SULLIVAN: 18 Q. All right. Could you list those
19 Q. I tell you what, before I look at 19 for me?
20 the documents, let me ask you this question. 20 A. I cannot.
21 About the retirement account you were talking 21 MR. RAFFERTY: Objection.
22 about that you funded with some of the Fannie 22 BY MR. SULLIVAN:
23 Mae settlement, who all are the participants in 23 Q. Could you identify a single one?
24 the retirement account? 24 A. A couple small things that I
25 MR. RAFFERTY: Objection. 25 worked on. One is a trust that we do every

Page 46 Page 48

1 If you know. 1 three years for the last 30 years and, you
2 A. The employees that were in 2 know, the fee was not much, about $5,000, I
3 existence at the time that the firm stopped. 3 think. That's the only one that I've worked
4 BY MR. SULLIVAN: 4 on. But, again, Steve would have a list of
5 Q. Do you use the date of the Wind-Up 5 what has come in, you know.
6 Agreement as the date the firm ceased to 6 Q. You're aware of the Castano Trust?
7 operate, essentially? 7 A. Let me see what -- that's familiar
8 A. I don't know what the -- I don't 8 sounding.
9 know what the consultant does on that. I'm not 9 Q. Are you aware that you signed --
10 a part of it. I was not part of the 10 A. Oh, Castano is the tobacco?
11 retirement. 11 Q. I think it's the tobacco, yes.
12 Q. I assume that some of the 12 A. Yeah.
13 employees would -- 13 Q. All right. How much money is owed
14 A. Right. 14 Waite Schneider from the Castano Trust?
15 Q. -- include people like Paul 15 A. Yeah, I don't know that. Steve
16 DeMarco? 16 would know that.
17 A. Correct. 17 Q. All right. Is Stan entitled to
18 Q. Bill Markovits? 18 money individually from the Castano Trust?
19 A. Right. 19 A. No. I think it's paid all to
20 Q. And Chris Stock and others? 20 Waite, Schneider, Bayless & Chesley.
21 A. Right. 21 Q. There was apparently a
22 Q. So whenever they were employees of 22 distribution recently in Nevada from the
23 Waite, Schneider, Bayless & Chesley, they were 23 Castano Trust to Waite Schneider. I think it
24 participants in a retirement account? 24 occurred in the last couple weeks. Do you know
25 A. Correct. 25 how much that was?

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1 A. No. 1 cleared up Davis?

2 Q. Do you have any idea how much it 2 A. It's confusing.
3 was? 3 Q. It is. Let me stop. I'm going to
4 A. No. No. 4 now switch to Fannie Mae. Okay? Do you know
5 Q. Do you have any idea how much 5 how much money has been paid to Waite Schneider
6 money Waite Schneider has received since the 6 as part of the Fannie Mae settlement?
7 Wind-Up Agreement from the Castano Trust? 7 A. I think it was around $15 million.
8 A. No. 8 Q. Would you agree with me that Stan
9 Q. And you have no idea how much 9 got some of that $15 million?
10 you're entitled to receive going forward, 10 MR. RAFFERTY: Objection.
11 right? 11 A. I don't know how much, if he did.
12 A. Uh-huh. 12 BY MR. SULLIVAN:
13 Q. You have to say yes or no. I'm 13 Q. Do you know if Stan Chesley
14 sorry. You have to answer the question 14 directed money as to where funds should be paid
15 audibly. 15 out of the Fannie Mae settlement?
16 A. Yeah. I know. I didn't -- will 16 A. No, I don't.
17 you repeat it? 17 Q. Do you know if Bill Markovits and
18 Q. Going forward, so from this day 18 his law firm received any money from the Fannie
19 forward in the future, how much money Waite 19 Mae settlement?
20 Schneider's entitled to get from the Castano 20 A. I don't know that.
21 Trust? 21 Q. Do you know of anybody who's been
22 A. I don't know. 22 paid any money from the Fannie Mae settlement?
23 MR. RAFFERTY: Objection. 23 A. The Fifth Third -- the major loan
24 BY MR. SULLIVAN: 24 to Fifth Third Bank.
25 Q. And you don't have an idea in 25 Q. Other than Fifth Third, I'm

Page 50 Page 52

1 total what the total amount, whether it's been 1 talking about any current or prior employee or
2 paid or going to be paid, would be owed to 2 shareholder, owner of Waite Schneider, who all
3 Waite Schneider? 3 received money, if you know, from the Fannie
4 A. I do not. 4 Mae settlement?
5 Q. Do you have any idea when the 5 A. No, I know nothing beyond Fifth
6 payments will end? 6 Third.
7 A. I do not. 7 Q. All right. Going forward, is
8 Q. Anything else you can tell me 8 Waite Schneider entitled to any money from the
9 about the monies from the Castano Trust -- 9 Fannie Mae settlement?
10 A. No. 10 A. At this point?
11 Q. -- that you're aware of? 11 Q. Yes.
12 A. I know nothing about it. 12 A. No, I don't know.
13 Q. You mentioned Fannie Mae as a 13 Q. Would Stan know the answer to
14 settlement that was used to fund the 14 that?
15 retirement? 15 A. I don't know.
16 A. Uh-huh. 16 Q. Steve Horner would?
17 Q. Is -- 17 A. Yes.
18 MR. RAFFERTY: I'll object. What he 18 Q. And Steve Horner would have the --
19 said when he talked about funding the retirement, 19 be the person that would keep track of that --
20 he talked about funding the retirement out of the 20 A. Right.
21 Davis settlement. 21 Q. -- at Waite Schneider?
22 BY MR. SULLIVAN: 22 All right. Other than the
23 Q. If you said that, I apologize. 23 Castano, the Fannie Mae, the Davis settlement,
24 A. I did. 24 and this three-year trust that generated about
25 Q. I'm sorry. So I think we've 25 $5,000, can you identify any other income

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1 sources for Waite Schneider that you can think 1 Q. Do you know what the agreement is
2 of? 2 when that money comes in from the Colorado case
3 MR. RAFFERTY: That are currently 3 as to how the money will be split?
4 generating income? 4 A. No, I don't know that.
5 MR. SULLIVAN: Either now or there's 5 Q. So you've never seen any -- let me
6 a commitment to pay in the future. 6 back up. Have you had any discussions with
7 A. We have a case in Colorado 7 Stan Chesley --
8 that's -- that I don't know the title to 8 A. No.
9 that's -- has to do with sort of like the 9 Q. -- about who gets what --
10 Fernald case and it's big bucks if it comes 10 A. No.
11 through. The interest alone is very large. 11 Q. -- if the Colorado settlement
12 BY MR. SULLIVAN: 12 comes in?
13 Q. Give me an estimate of -- what do 13 A. No, I have not.
14 you mean by big bucks? 14 Q. Do you know, as the person for
15 A. Well -- 15 Waite, Schneider, Bayless & Chesley, whether
16 MR. RAFFERTY: Objection. 16 the law firm will get some of that money?
17 If you know. 17 A. Correct, I believe.
18 A. I don't -- yeah, it's many 18 Q. Okay. And do you believe that,
19 millions. 19 likewise, Roselle and Jeannie Goeppinger also
20 BY MR. SULLIVAN: 20 will get some of that money?
21 Q. That's what I'm trying to figure 21 A. Yes.
22 out. Tell me -- based on your best estimate, 22 Q. Are you aware of anyone else who
23 when you say it's big bucks, it's many 23 might get some of that money?
24 millions? 24 A. No.
25 A. Yeah. 25 Q. Did that case come into the law

Page 54 Page 56

1 Q. Are we talking in excess of $50 1 firm when Stan was still actively practicing?
2 million? 2 A. Yes.
3 A. I don't know that. 3 Q. All right. You would expect that
4 MR. RAFFERTY: Is what in excess? I 4 Stan would be entitled to some of that money?
5 don't understand the question. 5 MR. RAFFERTY: Objection. It's not
6 A. It might generate -- you're saying 6 what he -- he hasn't testified to that.
7 it might generate money for Waite, Schneider, 7 MR. SULLIVAN: That's a question.
8 Bayless & Chesley? 8 MR. RAFFERTY: Sounded like a
9 BY MR. SULLIVAN: 9 statement.
10 Q. Yes. 10 A. Waite, Schneider, Bayless &
11 A. Right. 11 Chesley will get some of it. I don't know
12 Q. So there's a Colorado case, 12 about Stanley. It's a firm case. I mean --
13 Fernald type of case, big bucks. We're trying 13 I'm not sure that he would get anything.
14 to get an idea what we mean when we say big 14 BY MR. SULLIVAN:
15 bucks. 15 Q. I appreciate it. I'm just trying
16 A. The two ladies that are handling 16 to pin down, if we're identifying lawyers who
17 it, that left us that are in the firm with 17 don't work there anymore --
18 Markovits and the rest of them. 18 A. Right.
19 Q. And one of those ladies would be 19 Q. -- we've identified two, Jeannie
20 Louise Roselle? 20 Goeppinger and Louise Roselle. I'm trying to
21 A. Correct. 21 identify if there's any other lawyer, including
22 Q. Who's the other lady? 22 Stan --
23 A. Actually, she's not with them. 23 A. Not to my knowledge.
24 She's with -- she's in our building with -- 24 Q. -- when he was a lawyer, who is
25 it's Jeannie Goeppinger. 25 entitled to money.

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1 A. Not to my knowledge. 1 Q. Okay. So the most we can think of

2 Q. Who will make the decision on 2 thus far is the four that we've identified --
3 behalf of Waite, Schneider, Bayless & Chesley 3 or the five that we've identified. You can't
4 as to who gets what and how much when that 4 think of any more?
5 money ultimately comes in? 5 A. No.
6 A. Maybe Steve and me. 6 Q. And Steve Horner would be the
7 MR. RAFFERTY: Hold on. As to who 7 person who would know for sure --
8 gets how much Waite Schneider's share will be? 8 A. Right.
9 MR. SULLIVAN: No. 9 Q. -- the answer to that? How long
10 BY MR. SULLIVAN: 10 has Steve Horner worked at Waite Schneider?
11 Q. Any lawyer or Waite Schneider, 11 A. He fired everybody. So he was
12 where the money goes, who's going to be 12 there in -- about five years perhaps, something
13 involved in that decision, you and Steve? 13 like that.
14 A. I guess. I guess we will, yeah. 14 Q. So he was there before Stan signed
15 Q. So you're unaware of any agreement 15 the Wind-Up Agreement?
16 now as it exists between how the money's going 16 A. Correct.
17 to be allocated? 17 Q. Is he full-time?
18 A. Right. 18 A. Yes.
19 Q. And you're going to make that 19 Q. So he comes to work at the offices
20 decision sometime in the future? 20 every day?
21 A. If it comes. 21 A. Correct.
22 Q. And I'm assuming no money has come 22 Q. All right. Let me talk a little
23 in quite yet? 23 bit now about the expenses of Waite Schneider
24 A. No. 24 as you're winding up the affairs. What are the
25 MR. RAFFERTY: I object. This is -- 25 obligations that Waite Schneider has to pay in

Page 58 Page 60

1 this is more than a confusing line of question 1 order for it to wind up the affairs of the
2 because it misapprehends what the case is about 2 entity?
3 and how the matter is even proceeding. 3 MR. RAFFERTY: Objection.
4 MR. SULLIVAN: Well, we can try and 4 A. I think Steve would have the
5 clear it up. 5 answer to that. I don't know. I mean, we have
6 BY MR. SULLIVAN: 6 rent, of course.
7 Q. Can you tell me anything about 7 BY MR. SULLIVAN:
8 that case? 8 Q. I assume you have a lease?
9 A. No. Fernald-type. 9 A. In the building, yes.
10 MR. RAFFERTY: If you -- see, it's 10 Q. Do you know when the lease
11 interesting. If you would have asked specific 11 expires?
12 questions about, for example, payments to people 12 A. It's a two-year lease -- or a
13 or specific matters, you might have been able to 13 one -- two-year lease with two-year option.
14 get it. You might have been able to get in a 14 Q. So you're in the middle of a
15 30(b) context different testimony. 15 two-year --
16 MR. SULLIVAN: Well, I'm not here to 16 A. Two years, the first two years,
17 argue with you, but I believe I'm deposing the guy 17 yes.
18 who's supposed to have the most knowledge in the 18 Q. And the lessee is Waite Schneider?
19 law firm. 19 A. Bayless & Chesley, yes.
20 MR. RAFFERTY: That's not right. 20 Q. Is there anybody else on the
21 BY MR. SULLIVAN: 21 lease?
22 Q. Let's continue, Tom. I'm 22 A. No.
23 interested in other sources of money. 23 Q. Other than the lease, what other
24 A. There are other cases, but I can't 24 obligations does Waite Schneider have?
25 think of anything right now. 25 MR. RAFFERTY: Objection.

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1 If you know. 1 BY MR. SULLIVAN:

2 A. I think you'd have to talk to 2 Q. I should have asked this in the
3 Steve again. 3 beginning. These documents that your counsel
4 BY MR. SULLIVAN: 4 gave to me, do you know if any documents have
5 Q. Would you agree with me, Tom, that 5 been withheld under a claim of privilege?
6 one of your jobs is to wind up the affairs of 6 A. No, I do not.
7 Waite Schneider? 7 MR. SULLIVAN: Do you know?
8 A. Right. That's the purpose. 8 MR. RAFFERTY: Well, my e-mails to
9 Q. How long is it going to take if 9 the firm, yes. Those have. Other than that, I
10 the Wind-Up Agreement was signed almost three 10 don't believe there are any that fell within
11 years ago to wind up the affairs? 11 these.
12 A. Don't know. These cases we talked 12 MR. SULLIVAN: Okay.
13 about or one case, you know, it depends on the 13 BY MR. SULLIVAN:
14 timing on that, I guess, and other -- and the 14 Q. And do you know, Tom, if the
15 other cases that are in the hopper. 15 documents you produced --
16 Q. So as you sit here today, you 16 MR. RAFFERTY: I'm sorry. I'm
17 can't tell me -- 17 wrong. There's also -- there were also Marion
18 A. No. 18 Little communications regarding Davis.
19 Q. -- an estimate -- 19 MR. SULLIVAN: Okay. Other than
20 A. No. 20 e-mails or communications from Marion Little and
21 Q. -- when the affairs will be wound 21 you --
22 up? 22 MR. RAFFERTY: And my firm. I
23 A. No. I have perhaps 200 wills I'm 23 mean --
24 going through that were collected over the 24 MR. SULLIVAN: And your firm.
25 years. I mean, the firm was founded in the 25 MR. RAFFERTY: Yeah.

Page 62 Page 64

1 1800s. It had a different name. And there's 1 MR. SULLIVAN: Anything else that's
2 plenty of stuff to go over, I'll tell you. And 2 been withheld for claim of privilege?
3 I'm trying to go over some of it. 3 MR. RAFFERTY: Not that I'm aware of,
4 Q. All right. And as -- you would 4 no.
5 agree that one of your obligations in winding 5 MR. SULLIVAN: Okay. I assume
6 up the affairs is to make sure all the debts 6 there's not a log yet generated?
7 and obligations are paid? 7 MR. RAFFERTY: No.
8 A. Right. 8 MR. SULLIVAN: Okay.
9 Q. And I'm trying to figure out what 9 BY MR. SULLIVAN:
10 those are. But other than lease, you're not 10 Q. Tom, the documents that your
11 able to tell me any other obligation that's 11 lawyer produced to us today, do you know if
12 part of the wind up of the affairs of the law 12 this is a complete production in response to
13 firm? 13 the nine categories in the subpoena?
14 A. No, I can't. 14 A. I hope so.
15 Q. Okay. 15 Q. Okay. If you don't know, you can
16 MR. RAFFERTY: You're talking about 16 tell me you don't know. I just want to know if
17 as we sit here today? 17 there's --
18 MR. SULLIVAN: Yeah. 18 A. I don't know.
19 MR. RAFFERTY: Right? 19 Q. And as best you know, Steve Horner
20 MR. SULLIVAN: Yeah. 20 was at least involved in gathering these up?
21 Okay. Tom, I'm going to take a break 21 A. Who?
22 for a second. I'm going to look at these 22 Q. Steve Horner.
23 documents. Okay? 23 A. Oh, yeah.
24 THE WITNESS: Good luck. 24 Q. Okay.
25 (Recess taken from 11:32 to 11:57.) 25 A. Yes.

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1 Q. Anyone else at Waite Schneider 1 A. The employees have been

2 besides Steve Horner? 2 terminated, and Steve did that. And the
3 A. No. 3 programs, all the benefit programs, including
4 Q. Okay. 4 the retirement, has been done. I guess we've
5 A. I don't have e-mail or anything 5 resolved all the credit owed by the
6 myself, no computer, no -- nothing. I'm a 6 corporation, Fifth Third. And terminate or
7 dinosaur. 7 negotiate -- I don't know whether we've done
8 Q. I would love to live in that world 8 the other things. I guess we have. I don't
9 sometimes. Okay. I'm going to -- 9 know what the -- Steve has done.
10 MR. RAFFERTY: I mean, did you want 10 Q. You keep mentioning Steve. Who
11 me to tell you what -- they were produced in 11 gives him direction?
12 relation to? 12 A. He asks for my opinion, and I
13 MR. SULLIVAN: If you know by Bates 13 guess he's an accountant and knows what an
14 number, that would be awesome. 14 accountant has to do.
15 MR. RAFFERTY: Well, I think I do. 15 Q. Right. But I guess my question
16 If I can -- I only have that set. I don't have 16 is, who tells him what he's supposed to do as
17 another. 17 an employee of the corporation?
18 MR. SULLIVAN: Maybe it would be 18 A. I do, in part.
19 easier, Don, if you, just as a lawyer who produced 19 Q. And who else does, in part?
20 these on behalf of the client, that these -- you 20 A. I'm trying to think of what
21 don't need to separate them out, is what I'm 21 Stanley would tell him.
22 saying; that this is, as best you can tell, a 22 Q. Let me ask --
23 complete production. 23 A. Stanley isn't an employee, so he
24 MR. RAFFERTY: That is a complete 24 has no --
25 production based on what we were able to go 25 Q. Let me ask this way. I assume

Page 66 Page 68

1 through and gather and the like. 1 that Stanley and Steve Horner regularly
2 MR. SULLIVAN: Okay. And then 2 interact when they're both in the office?
3 obviously absent the privileged stuff that you 3 A. Yeah, sure.
4 were talking about. 4 Q. And there's many times that they
5 MR. RAFFERTY: Right. Right. 5 talk to each other that you're not a part of
6 MR. SULLIVAN: Okay. 6 the conversation?
7 BY MR. SULLIVAN: 7 A. Correct, yes.
8 Q. Tom, I will mark things if you 8 Q. Right?
9 need them, but this is our only copy, so I'll 9 A. Yeah.
10 just show it to you. This is the Wind-Up 10 Q. Okay. And Steve Horner's job is
11 Agreement. 11 to be an accountant for the corporation to help
12 A. Yes. 12 wind up the affairs of the corporation?
13 Q. This is page 2, which I put a 13 A. Correct.
14 yellow sticker on, of the Wind-Up Agreement. 14 Q. Right?
15 You'll see on there it identifies your duties 15 A. Correct.
16 to wind up the affairs of the corporation. 16 Q. Okay. On that list, what of the
17 Do you see that? 17 items remain to be done before you can conclude
18 A. This stuff down here, yeah. 18 your duties to wind up the affairs?
19 Q. Yeah. 19 MR. RAFFERTY: Objection.
20 A. Right. 20 If you know.
21 Q. Okay. I'm asking with specific 21 Can I have the next page?
22 reference to the items mentioned on that page, 22 MR. SULLIVAN: That's fine.
23 what have you done to wind up the affairs of 23 A. I don't think we're going to
24 the corporation, if you can tell me anything 24 transfer clients to new legal counsel. I don't
25 that describes your activity? 25 think that's our duty. I think we've done B.

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1 A, terminate or negotiate the termination of 1 completed, the legal cases, et cetera. I mean,
2 all executory nonclient agreement. Maybe 2 that has to be done. That's probably under D,
3 there's some of that left. 3 I guess.
4 MR. RAFFERTY: Tom, you're looking at 4 Q. While we're on the legal cases,
5 the A through F -- 5 given that we've talked about it a little bit
6 THE WITNESS: I'm looking at 4, 1 6 and we've taken a break, are you able to
7 also. 7 identify any other legal cases?
8 MR. RAFFERTY: Okay. 8 A. No. I don't have that knowledge.
9 A. It's protection. I think we've 9 Q. Okay. Just those five we talked
10 done B. A, we probably have something to do 10 about earlier? You can't recall any others?
11 there. 11 A. No.
12 BY MR. SULLIVAN: 12 Q. Okay. Anything else that you need
13 Q. So we all have the benefit, what 13 to do to fulfill your duties to wind up the
14 does A say? 14 affairs other than what you've just described
15 A. Terminate and negotiate the 15 for me thus far that you can think of?
16 termination of all executory nonclient 16 MR. RAFFERTY: Reading the page 2
17 agreements. 17 items?
18 Q. Okay. So you have some work to do 18 MR. SULLIVAN: Yeah, the items that
19 on the nonclient agreements? 19 he agreed to do.
20 A. Whatever they are. And, of 20 A. D, you know, we have bank
21 course, I don't think we're going to do C. 21 accounts, of course, and savings accounts. We
22 Q. Which is what? 22 haven't -- things like that that we --
23 A. Transferring clients of the 23 computers, et cetera. We haven't completed
24 corporation to new legal counsel. We did C and 24 using them as yet.
25 F -- or E and F, which was terminate employees 25 BY MR. SULLIVAN:

Page 70 Page 72

1 and their programs. And identifying accounts 1 Q. I appreciate that.

2 for all assets reasonably to be -- we're 2 A. The language is sort of archaic.
3 working on D. 3 Q. Speaking of the archaic language,
4 Q. Which is what? 4 who drafted that agreement, you or Stanley?
5 A. Identify and account for all 5 A. Not me. Oh, I'm sure Stanley did.
6 assets owned, used, in possession of the 6 MR. RAFFERTY: Objection.
7 company of every kind wheresoever -- whatsoever 7 BY MR. SULLIVAN:
8 located, including, but not limited, furniture, 8 Q. Okay. Let me ask you this. You
9 books, blah, blah, blah, data processing 9 know the only people who signed that agreement
10 records, evidence of debt, bank accounts, 10 are you and Stan?
11 savings accounts, brokerage accounts, 11 A. Yeah.
12 certificates of deposit, stocks, bonds, 12 Q. Okay. Do you actually recall
13 debentures, and other securities. We've done 13 signing it?
14 part of that. I don't know that we've done all 14 A. Yes.
15 of that when we paid the debts of the company. 15 Q. Did he transfer physically shares
16 Q. So from what is left to be done -- 16 to you?
17 that was my question, what's left to be done. 17 A. Yes.
18 Can you identify any of the executory contracts 18 Q. And do you have those in your
19 that you need to yet terminate? 19 possession?
20 A. No. 20 A. They're in the firm, yes.
21 Q. Okay. Can you identify any asset 21 Q. Okay. And how many shares are
22 or category of assets that you need to locate 22 there, do you know?
23 and dispose of as part of your wind up affairs? 23 A. 125, I believe, or something like
24 A. There are the cases -- or the 24 that.
25 things that are in the hopper that we haven't 25 Q. Are you the only person who is

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1 holding the shares? 1 A. No, I don't.

2 A. Right. 2 Q. Okay. So as best you can tell,
3 Q. Okay. And before he gave you the 3 that's not an asset of the firm that you're
4 shares, he was the sole shareholder? 4 currently dealing with --
5 A. Correct. 5 A. It may well be; have to talk to
6 Q. Gotcha. Is there any other 6 Freking.
7 agreement besides the Wind-Up Agreement between 7 Q. Okay. You got to let me finish my
8 you and Stan Chesley relative to the affairs of 8 question. As best you can tell, as you sit
9 Waite Schneider? 9 here today, that's not an asset that you're
10 A. No. 10 dealing with in trying to wind up the affairs
11 Q. So there's no trust agreement or 11 of the corporation?
12 anything else that you're aware of? 12 MR. RAFFERTY: Objection. That's not
13 A. No. 13 what he said. He said he didn't know.
14 Q. You mentioned some of the 14 A. Steve may be doing something on
15 employment agreements we'll get to in a second. 15 it. I don't know.
16 One case I saw in these documents is the 16 BY MR. SULLIVAN:
17 Williams versus Duke Energy case. Do you know 17 Q. I'm not interested in Steve. I'm
18 anything about that? 18 interested in right now just what you're doing.
19 A. I heard something about it 19 Are you doing anything relating to the Duke
20 recently, there was some activity, unfair 20 Energy case?
21 charges. I don't know who's handling that. 21 A. No. Maybe I should be.
22 Q. Okay. I'll represent to you the 22 MR. RAFFERTY: Don't. Just answer.
23 documents that you gave to us, it appears that 23 BY MR. SULLIVAN:
24 Randy Freking is involved in that case. 24 Q. You are aware that the firm had an
25 A. Uh-huh. On our behalf? 25 employment agreement with Joe Deters?

Page 74 Page 76

1 Q. Well, on behalf of -- 1 A. Joe Deters?

2 A. Or Duke? 2 Q. Yeah.
3 Q. Yeah. I'll represent to you that 3 A. Yeah. On the Fannie Mae case?
4 back in April of 2013, apparently there was an 4 Q. Well, are you aware that in
5 agreement between Mr. Chesley and Randy Freking 5 December 30, 2013 there was an -- there was a
6 that Mr. Chesley was withdrawing as counsel for 6 termination of the employment agreement that
7 the plaintiffs and Mr. Freking was taking over. 7 Waite Schneider had with Joe Deters? Are you
8 A. Uh-huh. 8 aware of that?
9 Q. Are you aware of that? 9 A. Yeah.
10 A. I've heard something about it, 10 Q. I'll show you page 2 of that
11 yes. 11 agreement where it appears that Stan signed
12 Q. Are you aware that that case has 12 your name on that piece of paper.
13 recently settled? 13 Do you see that?
14 A. No. 14 A. No. I signed that. That's my
15 Q. Do you know if Stan is entitled to 15 signature.
16 any money out of that settlement? 16 Q. Okay. You see your name spelled
17 A. No. 17 Tom Rehme?
18 Q. Have you had any discussions with 18 A. Right.
19 Stan -- 19 Q. And you see to the right it says,
20 A. No. 20 per, and then there are initials?
21 Q. -- about that? 21 A. Yeah. Down below, yes.
22 A. No, I have not. 22 Q. Right. And are those SMC, the
23 Q. Do you know if Waite Schneider is 23 initials of Stanley M. Chesley?
24 entitled to any money as a result of that 24 A. It's hard to tell. I guess it is.
25 settlement? 25 Q. Okay. I appreciate your answer

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1 that your signature appears above -- 1 A. No, I didn't.

2 A. Yeah, right. 2 Q. Okay.
3 Q. -- the supposed authorization of 3 A. He got a million bucks, right?
4 somebody. 4 Q. I don't know how much he got.
5 A. Right. 5 A. Yes, he got a million bucks.
6 Q. All right. In what capacity did 6 Q. So as it relates to the
7 Stan sign that? 7 negotiation, it wasn't you?
8 A. He's got president, but that -- 8 A. It's Fannie Mae.
9 where is the date on here? 9 Q. I'm talking about the negotiation
10 Q. That document, sir, is dated 10 for a second. So the negotiation of the
11 December 30, 2013. 11 termination, this document, it was not
12 A. Yeah. He shouldn't have signed 12 negotiated by you. Do you know if it was
13 that. 13 negotiated by Stan?
14 Q. Have you done anything to correct 14 A. No, I don't.
15 that document so that his signature as the 15 Q. Anyone else who could have
16 president of the entity in December 2013? 16 negotiated on behalf of the corporation besides
17 A. No, I haven't. 17 either you or Stan?
18 MR. RAFFERTY: Other than his 18 A. No. And I think it was intended
19 signature below it? 19 for me to sign it, and that that was a mistake
20 MR. SULLIVAN: Yeah. 20 on his part.
21 A. My signature below it. No, the 21 Q. All right. Who told you to pay
22 secretary. Oh, yeah. I guess that's a 22 Joe Deters a million dollars?
23 correction. My signature below his, if you can 23 A. Huh?
24 read his signature. 24 Q. Who told you to pay Joe Deters a
25 BY MR. SULLIVAN: 25 million dollars?

Page 78 Page 80

1 Q. Do you know when you signed that 1 MR. RAFFERTY: Objection.

2 document? 2 BY MR. SULLIVAN:
3 A. I would -- I suppose the date on 3 Q. Go ahead.
4 the document, which was -- you just mentioned 4 A. Well, it was a necessary -- we did
5 the date. 5 it because we wanted to save Fannie Mae. We
6 Q. December 30, 2013? 6 wouldn't have saved the Fannie Mae case without
7 A. Yeah. 7 that.
8 Q. And you have no -- let me back up. 8 Q. I appreciate that. That's not my
9 Do you have any explanation why somebody wrote 9 question. Somebody negotiated -- and you told
10 your name and put initials next to it? 10 me it wasn't you because you did not negotiate
11 A. My signature is mine. I don't 11 this agreement. Somebody negotiated this
12 know who did that. 12 agreement with Mr. Deters?
13 Q. And is it fair to say, Tom, that 13 A. Uh-huh.
14 the person who negotiated the termination of 14 Q. Now my question is, who told you
15 this agreement is Mr. Chesley and not you? 15 to authorize the payment to him of a million
16 MR. RAFFERTY: The termination of the 16 dollars?
17 employment agreement? 17 MR. RAFFERTY: Objection.
18 MR. SULLIVAN: Yeah. 18 A. Well, I guess the check was
19 A. I don't recall what we did at that 19 written by Steve, probably.
20 time. 20 BY MR. SULLIVAN:
21 BY MR. SULLIVAN: 21 Q. I appreciate that, but that's not
22 Q. Well, do you recall if you 22 my question.
23 negotiated this agreement with Joe Deters? 23 A. Yeah.
24 A. With Joe Deters? 24 Q. I'm not asking who wrote the
25 Q. Yeah. 25 check. I'm asking, who gave the authority, who

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1 directed that that act be done? 1 accurate --

2 MR. RAFFERTY: If you know. 2 A. No.
3 A. I don't really know. 3 Q. -- as of June of '13?
4 BY MR. SULLIVAN: 4 A. No.
5 Q. Okay. And it's your understanding 5 Q. Do you know who all within Waite
6 that in order to save the case -- 6 Schneider would get a copy of that when it was
7 A. Correct. 7 generated?
8 Q. -- a payment had to be made to Joe 8 A. I guess I did. And Steve, of
9 Deters? 9 course, probably prepared it. I don't know who
10 A. Joe Deters had to be hired in 10 else would have gotten a copy.
11 place of Stanley. 11 Q. All right. We were talking
12 Q. Okay. And who negotiated that 12 earlier today about the pension contribution
13 arrangement, the hiring of Joe Deters? 13 that you made?
14 MR. RAFFERTY: Objection. 14 A. Yeah.
15 A. The firm did. I don't really 15 Q. Do you see a pension contribution
16 know. 16 as a expense?
17 BY MR. SULLIVAN: 17 A. Yeah. 155,000.
18 Q. Was it you? 18 Q. Do you know if that same type of
19 A. I was involved, but -- and signed 19 contribution was made from 2013 to 2016, or
20 the agreement, you know. 20 whenever it was before you --
21 Q. Tom, I'm going to hand you another 21 A. I don't have those in front of me.
22 document -- you know what, let me back up just 22 I don't know.
23 so I'm clear. 23 Q. Okay. Do you know if Steve
24 The page of the Wind-Up Agreement I 24 regularly produces these since 2013 to you at
25 showed you, WSBC2. The termination agreement I 25 Waite Schneider?

Page 82 Page 84

1 showed him, the page is WSBC24. What I'm about to 1 MR. RAFFERTY: Objection.
2 show him is WSBC356. 2 A. I think so.
3 Tom, I'm going to show you what 3 BY MR. SULLIVAN:
4 appears to be the comparative operating expenses 4 Q. Go ahead.
5 of Waite, Schneider, Bayless & Chesley as of 5 A. I think he does.
6 June 30, 2013. 6 Q. All right. I'll take it back.
7 A. Uh-huh. 7 Thanks.
8 Q. I assume you're familiar with this 8 I'm going to hand you what is Waite,
9 kind of document in your role at Waite 9 Schneider, Bayless, Chesley 363, which is part of
10 Schneider? 10 362 to 364. Tom, these are the -- identified as
11 A. No. 11 the schedule A statements of assets and
12 Q. No. So if you have a similar 12 liabilities, modified cash basis, 12/31, 2013.
13 document that would be generated in, say, 2016, 13 I'm going to hand you all three pages, but I want
14 would you have any knowledge of that, the 14 you to look at the second page in particular,
15 operating expenses of Waite Schneider? 15 which has the yellow sticky on it.
16 A. No. 16 A. (Witness complies.)
17 Q. Do you have any ability to tell me 17 Q. Take a look at that second page,
18 how those numbers -- strike that -- where those 18 you'll see there's a category, I think it says
19 numbers came from in order to be put on that 19 shareholder liability. I don't have it right
20 list? 20 in front of me, but something to that effect.
21 A. I'm sure -- 21 A. Total liabilities loan payable?
22 MR. RAFFERTY: Objection. 22 MR. RAFFERTY: Loan payable
23 A. -- Steve handled that. 23 shareholder?
24 BY MR. SULLIVAN: 24 MR. SULLIVAN: Yeah.
25 Q. Do you know if that list is 25 MR. RAFFERTY: 29-million-490?

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1 MR. SULLIVAN: Yes. 1 accountants?

2 BY MR. SULLIVAN: 2 A. Correct.
3 Q. Do you see that number? 3 Q. Okay. Do you know if Stan Chesley
4 A. Yeah. 4 had any input in the numbers here?
5 Q. Does that mean the company owed 5 A. Have no idea.
6 the shareholder $29 million? 6 Q. Do you know if he got a copy of
7 A. I don't know. 7 this when it was generated?
8 Q. Okay. Would the shareholder 8 A. Don't know that either.
9 referenced in that be Stan Chesley? 9 Q. Did you negotiate the fee
10 MR. RAFFERTY: Objection. I don't 10 agreement with Marion Little for the Davis
11 think we've even asked if he ever saw the document 11 case?
12 before. 12 A. No.
13 A. I don't know. 13 Q. Who did?
14 BY MR. SULLIVAN: 14 A. Well, I signed it, I think, but --
15 Q. In your role in winding up the 15 MR. RAFFERTY: Are you talking about
16 affairs of Waite Schneider, do you normally get 16 the fee agreement or the fee distribution stuff
17 statements like this that talk about the assets 17 that we produced?
18 and liabilities of the corporation? 18 MR. SULLIVAN: The agreement.
19 A. No. Steve does. 19 A. Hiring him?
20 Q. Do you know if you would have seen 20 BY MR. SULLIVAN:
21 this particular document as it was prepared 21 Q. Yeah, who hired him?
22 sometime after 12/31 of '13? 22 A. Your firm. No.
23 A. I don't know if I did or not. 23 Q. Don hired him?
24 Q. Okay. I assume you would not have 24 A. Yeah. Yeah, I didn't -- I hired
25 given Steve any input on how to prepare this or 25 him in that I signed the agreement, but, you

Page 86 Page 88

1 where the numbers come from for the different 1 know, I don't know where he came from. I
2 categories? 2 didn't know him beforehand.
3 A. No. No, I did not. 3 Q. Okay. So you don't know how it is
4 MR. RAFFERTY: Objection. 4 that he came to represent Waite Schneider in
5 BY MR. SULLIVAN: 5 the Davis case?
6 Q. Okay. Other than Steve doing the 6 A. No, I do not.
7 work for himself, do you know if anyone else 7 Q. Okay. And you don't -- or you did
8 would have assisted him in figuring out what 8 not have any involvement in the negotiation of
9 numbers belong with which categories? 9 the fee agreement, which would determine how
10 A. The accounting firm, you know. 10 much he would charge for his services, right?
11 Q. The outside accounting firm? 11 A. I signed the -- I signed that
12 A. Could, I guess. 12 agreement, right. So --
13 Q. For instance -- maybe you know 13 Q. Yeah, that's a different question.
14 this, maybe you don't -- one of the assets 14 I know you signed it. I'm asking if you were
15 listed here is a note receivable of $1.28 15 involved in the negotiation?
16 million. Would you have any knowledge as to 16 A. No.
17 who owed that note to Waite Schneider in 2013? 17 Q. Okay. Do you recall that in
18 A. No, I don't. I do not. 18 September of last year, after that case
19 Q. And I guess as it relates to, say, 19 settled, that Marion Little and his law firm
20 there's a number of $1.2 million for furniture 20 got $2 million?
21 and fixtures, you wouldn't have any knowledge 21 A. Yeah, I did know that.
22 of where that number comes from either, would 22 Q. Okay. Because you signed a piece
23 you? 23 of paper that showed the calculation. Do you
24 A. Uh-uh. 24 recall that? That's 375, WSBC.
25 Q. That would be Steve or the outside 25 A. Yep. I did sign it.

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1 Q. And I asked you this earlier. Let 1 or not, Tom, but that's going to be my
2 me back up. You do -- make that clear. Do you 2 question. Does that refresh your recollection
3 recall that the money went from Mr. Davis into 3 as to how much is coming out of the Castano
4 Mr. Little's IOLTA account at his law firm? 4 Trust on a quarterly basis, approximately
5 Are you aware of that? 5 $700,000?
6 A. No. 6 A. Doesn't refresh my memory. I
7 Q. Okay. Would you be able to tell 7 don't think about that case.
8 me that after he took -- Mr. Little took his 8 Q. Yeah. That's the case I talked
9 fee, whatever was left, do you know when he 9 about earlier that I believe a payment was made
10 made that payment to Waite, Schneider, 10 just within the last 30 days.
11 Bayless & Chesley? 11 A. Right.
12 A. When? 12 Q. But you're not sure of the
13 Q. Yeah. 13 amount --
14 A. No. 14 A. No.
15 Q. And I said to Waite Schneider. I 15 Q. -- despite my attempt to refresh
16 think you told me earlier, you're not even sure 16 your memory?
17 who he paid after he collected his fee, right? 17 A. No.
18 A. Right. 18 Q. Okay. Other than Steve Horner,
19 Q. Okay. I'm going to hand you what 19 have you delegated your responsibilities to
20 is 397 through 412. This is identified at the 20 wind up the affairs of Waite Schneider to
21 top as Execution Version Castano Trust Security 21 anyone else?
22 Agreement, April 29, 2011. 22 A. No.
23 A. Castano, yes. 23 Q. That Colorado litigation you
24 MR. RAFFERTY: 2011. 24 referenced earlier, do you recognize the name
25 BY MR. SULLIVAN: 25 Rocky Flats?

Page 90 Page 92

1 Q. If you look toward the back, the 1 A. Yeah.

2 signature page -- 2 Q. Is that the Colorado litigation we
3 A. An exhibit. 3 talked about?
4 MR. RAFFERTY: Let me see. Okay. 4 A. Yes.
5 A. Yep. 5 Q. I'll represent to you that in a
6 BY MR. SULLIVAN: 6 pleading filed on behalf of Mr. Chesley that
7 Q. Stand up for one second. All 7 there was a representation that Waite Schneider
8 right. So the document was signed apparently 8 may receive income for legal work performed
9 by Stan Chesley as president of Waite Schneider 9 previously by its employees. Mr. Chesley's
10 and Stan Chesley individually on the date of 10 right to receive any portion of those funds
11 that agreement. 11 depends on several contingencies, including
12 Do you see that? 12 some contingencies related to Waite Schneider's
13 A. Yeah. 13 financial condition.
14 Q. Do you know why he signed it 14 I'm going to tell you that's
15 individually? 15 what's been told to a Court by Mr. Chesley's
16 MR. RAFFERTY: In 2011 you're asking 16 counsel.
17 him? 17 My question to you, Tom, is, are you
18 MR. SULLIVAN: Yeah. 18 aware of any contingencies that you can --
19 MR. RAFFERTY: Okay. 19 A. I didn't hear you.
20 A. No. I have no idea. 20 Q. -- any contingencies that you can
21 BY MR. SULLIVAN: 21 tell me that you're aware of today that
22 Q. All right. Somewhere in that 22 determines whether Mr. Chesley's entitled to
23 document it references payments of 23 any money?
24 approximately $700,000 on a quarterly basis. I 24 A. No.
25 don't know if that refreshes your recollection 25 MR. RAFFERTY: Objection.

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1 BY MR. SULLIVAN: 1 A. No, I'm not aware.

2 Q. All right. Are you aware of any 2 Q. Thanks.
3 agreement or contingency that's tied between 3 Other than the Markovits law firm,
4 Waite Schneider's financial condition and money 4 are you aware of any other law firm that's
5 that gets paid to Stan Chesley? 5 entitled to money from any of the sources of
6 A. No. 6 revenue that come into Waite Schneider either now
7 MR. RAFFERTY: Objection. 7 or will come in the future?
8 BY MR. SULLIVAN: 8 A. No, I'm not.
9 Q. And other than the Wind-Up 9 Q. Can you describe for me the
10 Agreement, are you aware of any other written 10 agreement, if any, that Waite Schneider has
11 agreement between Waite, Schneider, Bayless & 11 with the Markovits law firm as to how fees will
12 Chesley and Stan Chesley individually since 12 be split up?
13 April of '13? 13 A. Never seen it.
14 A. No. 14 Q. Did you in your role since the
15 Q. Does Stan Chesley still use the 15 Wind-Up Agreement ever direct any money to be
16 e-mail account at Waite Schneider today? 16 paid to the Markovits law firm?
17 A. I have no idea. I don't have 17 A. No.
18 e-mail. I don't know anything about e-mail. 18 Q. Or any of the employees of the
19 Thank God. 19 Markovits firm?
20 Q. Tom, we were speaking earlier 20 A. No, I have not.
21 about a document that Stan signed in January 21 Q. Other than for the lawyers that
22 of '14 as the sole member of the board of 22 represent either Waite Schneider or we talked
23 directors? 23 about earlier Stan personally, have you
24 A. Yeah. 24 directed the payment of legal fees for anybody
25 Q. And I did not have that document 25 else other than Waite Schneider or, to the

Page 94 Page 96

1 with me. But I'm going to show you -- I'll 1 extent you know, Stan Chesley?
2 mark it as Exhibit 2 because it doesn't have a 2 A. No, I have not.
3 Bates stamp attached to it. 3 Q. If I asked you generally, would
4 (Plaintiffs' Exhibit 2 was marked for 4 you be able to identify about the amount of
5 identification.) 5 money that's come into Waite Schneider since
6 MR. SULLIVAN: We'll get a copy for 6 the Wind-Up Agreement was signed, if you just
7 everybody if you want one. 7 have an idea as to what that number is?
8 MR. RAFFERTY: Is this the -- 8 MR. RAFFERTY: Objection.
9 BY MR. SULLIVAN: 9 A. We got Fannie Mae and you have
10 Q. And I think that was the document 10 Davis and, you know, and sundry other stuff. I
11 I described earlier. So it's a document dated 11 don't know.
12 in January '14 after the Wind-Up Agreement 12 BY MR. SULLIVAN:
13 signed by Mr. Chesley as the sole member of 13 Q. Other than it's in the millions of
14 Waite Schneider? 14 dollars, because we know the Davis was $5
15 A. Yeah. 15 million, are you able to identify with any more
16 Q. And is that the kind of document 16 specificity as to about how much money has come
17 you described as a mistake -- 17 into Waite Schneider since April 2013?
18 A. Correct. 18 MR. RAFFERTY: Objection.
19 Q. -- when Stan represented to 19 A. 15 from Fannie Mae, I guess. I
20 somebody that he was the sole member of the 20 don't know -- I couldn't estimate. We have to
21 board of directors? 21 go to Steve to find that out.
22 A. Correct. 22 BY MR. SULLIVAN:
23 Q. Are you aware of any correction 23 Q. All right. At least from Fannie
24 that was made to that document since he signed 24 Mae and Davis, we know it's probably in excess
25 it in January '14? 25 of $20 million?

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1 A. 20, yeah. 1 A. Yes.

2 Q. And I assume you don't have $20 2 Q. I understand from your lawyer that
3 million in the account at Waite Schneider. And 3 you normally get started in the afternoon?
4 other than the payment of the expenses, can 4 A. Yeah, I get there about 1:00.
5 you, as we've now talked about it all, identify 5 Q. Okay. Is it five days a week,
6 any other person or persons that money has been 6 then?
7 paid to or for their benefit arising from that 7 A. Yes.
8 collection of over $20 million? 8 Q. And I apologize if I've asked this
9 A. I have no knowledge of that, no. 9 already. Steve Horner's full-time and he comes
10 Q. Does Stan direct where money goes? 10 in every day?
11 A. No. 11 A. Uh-huh.
12 Q. I think I've asked you this 12 Q. Melissa comes in every day?
13 earlier. You got a copy of the order in 13 A. No, no. She's there two or three
14 Kentucky, which I call the transfer order from 14 times a day -- a week. And she commutes at
15 June of 2015, that talked about payment of 15 night every night. Terrible.
16 Stan's -- any monies due Stan to be paid to 16 Q. So she lives in Columbus. She
17 Angela Ford and her clients? 17 comes down a few days a week, right?
18 A. Uh-huh. 18 A. Right.
19 Q. And you've not made any payments? 19 Q. Do you know, does she have access
20 A. No, correct. 20 to whatever she has access to in the office
21 Q. Okay. And you were the person 21 from her home? That's a bad question.
22 that decided not to make any payments? 22 Does she have what we call remote
23 A. Yes. 23 access, that she can get on the computer and
24 Q. There is a separate agreement -- 24 dial into the Waite Schneider e-mail system and
25 well, let me back up. Did Stan have any input 25 things of that nature?

Page 98 Page 100

1 in that decision not to make any payments? 1 A. Well, she answers the phone in
2 A. I can't remember if he said 2 Columbus for us and when she's not down in the
3 anything about it at that point. 3 office. And I don't know -- since I don't know
4 Q. You are aware, are you not, Tom, 4 anything about computers, why, I don't know
5 that in September of last year the judge in 5 what she gets -- she can type something for me
6 Kentucky made another order that related to 6 and send it down to our offices. So I guess
7 Stan and Waite Schneider and the role that each 7 that's what you're asking.
8 of them played to which he determined that the 8 Q. Yeah. She can do work remotely,
9 transfer was a sham? You've seen that order, I 9 send it to you?
10 assume? 10 A. Right.
11 A. No, I don't think I have seen 11 Q. Tom, would you have any knowledge
12 that. 12 about the checks that were made payable to Stan
13 Q. Okay. For me telling you that, is 13 personally either drawn out of the North Side
14 this news to you, the first you've heard that 14 account or Fifth Third? Would you have any
15 there is such an order like that? 15 knowledge about what were the circumstances
16 A. No. 16 surrounding that?
17 Q. You've heard it from someone? 17 A. During what period?
18 A. Yeah. 18 Q. Well, in 2015, checks were -- I'll
19 Q. All right. I take it you've done 19 represent to you, checks were made out to him
20 nothing to direct money to Ms. Ford and her 20 personally. Do you have any idea why someone
21 clients in reliance on that order? 21 would be writing Stan a check?
22 A. Right. 22 A. I don't really recall what the
23 MR. RAFFERTY: Objection. 23 instances -- what -- you know, what it was for.
24 BY MR. SULLIVAN: 24 Q. Can you think of anything he was
25 Q. Do you go to the office every day? 25 doing to earn that money if it wasn't actually

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1 a payment? 1 Q. Okay. Tom, just a little bit more

2 A. No, no. He wasn't earning 2 to go here.
3 anything. There may have been some taxes or 3 A. Okay.
4 something, but I don't know. He wasn't earning 4 Q. I'm going to hand you Exhibit 3.
5 any funds. 5 MR. RAFFERTY: Tom, this is -- do you
6 Q. Are you aware there's a tax lien 6 mind? This is from that Kentucky case.
7 filed against Stan last December? 7 THE WITNESS: Yeah.
8 A. No, I don't think I was. Federal? 8 MR. RAFFERTY: Remember you said June
9 Q. Yes. Have you and Stan had any 9 2015. That's the stamp.
10 conversations about the payment of his tax 10 BY MR. SULLIVAN:
11 obligation from Waite Schneider funds? 11 Q. Are you with me? Okay. I've
12 A. No, not really. 12 handed you what is marked as Exhibit 3. I
13 Q. Have you directed any money to be 13 described it earlier. This is what I call the
14 used for his tax obligation? 14 transfer order.
15 A. I've okayed it, yes. 15 A. Yeah.
16 Q. Okay. What occasions did you okay 16 Q. It's the order from the Boone
17 that monies be used for his tax obligation? 17 Circuit Court, June 23, 2015. I think you told
18 A. I don't remember. 18 me earlier you've seen this before?
19 Q. Was it state or federal, do you 19 A. Heard about it. I don't think --
20 know? 20 I'm not sure I've ever seen the order.
21 A. From time to time. Probably 21 Q. Okay.
22 federal, but I'm not sure. 22 A. I don't think I have. Yeah, I
23 Q. Okay. I assume Steve Horner would 23 just heard about it. Yeah.
24 have those records? 24 Q. All right. So now that you've
25 A. He has those records, yes. 25 seen it, which might be for the first time, I

Page 102 Page 104

1 Q. Do you know, does the firm owe 1 want you to look at the last page, because this
2 Stan Chesley any money? 2 is the order of the Court. The first paragraph
3 A. I don't believe so. No. 3 directs Mr. Chesley to transfer his interest in
4 Q. Do you know if Waite Schneider 4 the shares of Waite Schneider to Ms. Ford on
5 issued Stan a K-1 in 2014 or 2015? 5 behalf of her clients.
6 A. No, I'm not -- I don't know that. 6 And I think we've established that
7 Q. We talked briefly about Fifth 7 Stan has never asked you to do that, right?
8 Third and North Side and the outside 8 A. Correct.
9 accountants. Are you aware of any other 9 Q. In the second paragraph, that he's
10 outside accountant, bank, investment advisor, 10 ordered to tell you that all payments made from
11 or any other financial entity that Waite 11 his interest in those shares should be made
12 Schneider uses? 12 payable to Angela Ford.
13 A. No. 13 And Stan's never told you, don't
14 Q. Do you know who Stan uses as an 14 pay him, instead, pay the money to Ms. Ford on
15 investment advisor? 15 behalf of her clients, right?
16 A. No. 16 A. Say that again.
17 Q. For the North Side account now, 17 Q. Has Stan ever told you --
18 who all has the authority to sign a check? 18 A. No.
19 A. Steve, myself. That's all I know. 19 Q. -- don't pay me; whatever payments
20 MR. SULLIVAN: Okay. Let's go off 20 I get, however many millions those have been,
21 for a second. 21 pay Ms. Ford?
22 (Recess taken from 12:51 to 1:06.) 22 A. No, he has not.
23 (Plaintiffs' Exhibits 3 and 4 were 23 Q. All right. And then you're not
24 marked for identification.) 24 aware of the third provision of this where it
25 BY MR. SULLIVAN: 25 says, any other -- it says, If for any reason,

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1 including, but not limited to, any action by 1 asked to do that, right?
2 any other court in any other jurisdiction, 2 A. No, no.
3 monetary payments is or are made to Chesley 3 Q. And did Mr. Chesley transfer any
4 from his interest, Chesley or his attorney 4 payments he gets from the Castano Trust?
5 shall immediately turn over such payments to 5 A. Yeah.
6 plaintiffs' counsel, Angela Ford. 6 Q. We've talked about the Castano
7 And Mr. Chesley's never told 7 Trust, and you've not -- or Stan's not asked
8 you -- 8 you to pay any money --
9 A. No. 9 A. No, he has not.
10 Q. -- don't pay me, pay Ms. Ford? 10 Q. -- to her? And you've not,
11 A. He has not. 11 obviously, done that?
12 Q. Okay. The fourth provision 12 A. I have not.
13 required Mr. Chesley and his lawyer to give a 13 Q. And then this last thing is the
14 copy of this to you. Now, you've looked at it 14 Merilyn Cook, which is I believe the Rocky
15 for a minute. Is it your testimony you've not 15 Flats case. That's the last item, number 3.
16 seen this before today? 16 A. What am I looking at?
17 A. Yeah, I don't think I have. Yeah. 17 MR. RAFFERTY: You're on the wrong
18 Q. Okay. I'm going to hand you 18 page. It's this.
19 Exhibit 4. 19 BY MR. SULLIVAN:
20 (Off the record.) 20 Q. You set it down there. It's the
21 BY MR. SULLIVAN: 21 last page.
22 Q. Okay. Tom, we've taken a few 22 A. We got it.
23 minutes to give you the chance to look at 23 MR. RAFFERTY: His question, I think,
24 Exhibit 4. 24 is this is Rocky Flats. Is that Cook versus
25 A. Yep. 25 Rockwell?

Page 106 Page 108

1 Q. This is a document I referenced 1 BY MR. SULLIVAN:

2 earlier, but I didn't show it to you. That's 2 Q. Yeah, Cook versus Rockwell. Is
3 why I wanted to take a break and show it to 3 that the Rocky Flats case?
4 you. This is an order from the Boone Circuit 4 A. I guess.
5 Court in September of last year. Before you 5 Q. Well, don't guess. If you don't
6 just spent a few minutes reviewing it, have you 6 know, just tell me.
7 seen this before? 7 A. I don't know whether that's the
8 A. No, I have not. 8 correct citation or not.
9 Q. Okay. Among other things, the 9 Q. All right. And you don't know
10 order of the Court requires that Mr. Chesley 10 that Stan has complied with any of the
11 transfer his ownership interest in Waite 11 provisions in this number 3, right?
12 Schneider to Ms. Ford on behalf of her clients. 12 A. I don't think he has.
13 I take it that Stan has not told you to 13 Q. Okay. A couple additional
14 transfer those shares outside of where they're 14 questions on this. In this order, the Court
15 currently residing, right? 15 found that Waite Schneider paid $164,000 to
16 A. Correct. 16 Frost Brown Todd. And Frost Brown Todd, I'll
17 Q. And this order also directs Stan 17 represent to you, is the law firm representing
18 to pay any monies from his interest in Waite 18 Stan.
19 Schneider to Ms. Ford and her clients, and 19 A. I know that.
20 you've not done that either? 20 Q. Can you tell me why Waite
21 A. I didn't hear you. 21 Schneider paid $164,000 to Frost Brown Todd?
22 Q. This order also requires 22 A. What was the date on that, do you
23 Mr. Chesley to pay over any monies due him from 23 know?
24 his interest in Waite Schneider over to 24 Q. This is the order of the Court in
25 Ms. Ford and her clients, and you've not been 25 September of last year. So sometime before

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1 last September, Waite Schneider -- 1 personal lawyers?

2 MR. RAFFERTY: There's not a date. 2 A. I guess I -- I think we have a
3 THE WITNESS: Yeah. Frost Brown, 3 right to do that under the agreement.
4 yeah. 4 Q. I appreciate that, what you said.
5 BY MR. SULLIVAN: 5 But my question is, you don't remember doing
6 Q. So my question is, now that you've 6 it, right?
7 seen this number, can you tell me why Waite 7 A. I don't have a --
8 Schneider has paid for Stan's lawyer in this 8 MR. RAFFERTY: He doesn't remember if
9 amount? 9 he did or didn't.
10 A. That was done last year. 10 A. Yeah, right. I don't remember
11 Q. Yes. It was in last year? 11 that.
12 A. I guess we have the option to do 12 BY MR. SULLIVAN:
13 that under the agreement. 13 Q. Okay.
14 Q. What agreement? 14 A. I know what it was for.
15 A. The agreement that makes me -- 15 Q. Do you know if Stan paid for his
16 Q. The Wind-Up Agreement? 16 lawyers with any money from himself --
17 A. Yes. 17 A. I don't know that.
18 Q. Are you telling me, Tom, that you 18 Q. -- as opposed to Waite Schneider?
19 exercised authority under the Wind-Up Agreement 19 A. No.
20 to pay for his lawyers? 20 Q. Okay. Would you agree with me,
21 A. I don't know whether I authorized 21 Tom, it's not just Frost Brown Todd, that it's
22 it or not. I don't recall that. 22 other law firms that Waite Schneider has
23 Q. Well, nobody else could authorize 23 written checks to to pay for legal services
24 it on behalf of Waite Schneider besides you, 24 rendered exclusively to Stan Chesley?
25 right? 25 A. Yeah. It's happened, yeah.

Page 110 Page 112

1 A. Supposedly. 1 Q. And can you think of a single

2 Q. And if it was done without your 2 instance that you're aware of where a lawyer
3 authorization, then supposedly somebody usurped 3 sent a bill for services rendered to Stan
4 your authority and directed that payment; fair? 4 Chesley that Stan paid and not Waite Schneider?
5 MR. RAFFERTY: Objection. 5 A. No, I don't know.
6 A. Yeah, I don't know whether -- I 6 MR. RAFFERTY: How would he know?
7 don't recall authorizing it, no. 7 A. I don't know. I don't know that.
8 BY MR. SULLIVAN: 8 BY MR. SULLIVAN:
9 Q. And if you don't recall 9 Q. Okay. And the legal fees that
10 authorizing it and somebody did authorize it, 10 Waite Schneider's incurred for the
11 that would be beyond the authority that that 11 representation of Waite Schneider, like
12 person had to pay for his personal lawyers out 12 Mr. Rafferty, to your left, Waite Schneider's
13 of the Waite Schneider funds; am I right? 13 obviously paid those fees?
14 MR. RAFFERTY: Objection. 14 A. Right.
15 A. I'm not sure we don't have the 15 Q. Okay.
16 right to pay it out of that fund, his personal. 16 MR. SULLIVAN: All right. Tom, I
17 BY MR. SULLIVAN: 17 think I'm finished.
18 Q. I appreciate that. And I 18 MR. RAFFERTY: I'm going to take a
19 appreciate you can't remember one way or the 19 second and talk to him. I may have some.
20 other. 20 MR. SULLIVAN: Okay.
21 A. I don't remember having anything 21 (Recess taken from 1:25 to 1:35.)
22 to do with it, yeah. 22 MR. SULLIVAN: Tom, before we took a
23 Q. Okay. And if it wasn't you, who 23 break, I was about to say, I'm finished asking
24 else on behalf of Waite Schneider could say, I 24 questions. For the record, I'm going to reserve
25 direct Waite Schneider to pay for Stan's 25 my right to bring you back because I just got

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1 these documents and tried to make a quick review

2 of them. But to the extent I feel there's either
3 been inadequate production or a reason for me to
4 have you back for another occasion, I will contact
5 you through your lawyer, Mr. Rafferty. Okay?
6 THE WITNESS: You're not satisfied
7 with what we brought?
8 MR. SULLIVAN: I don't know because I
9 haven't seen it all other than the few minutes I
10 spent reviewing it. But we'll reserve for that
11 purpose.
12 THE WITNESS: Oh, okay. All right.
13 MR. SULLIVAN: And, otherwise, we're
14 going to have this transcribed. Your lawyer can
15 instruct you.
16 MR. RAFFERTY: We'll review.
17 MR. SULLIVAN: Let it be noted, and
18 we'll be finished.
19 MR. MAUER: I have no questions, but
20 would like a copy, please.
21 THE REPORTER: E-Tran?
22 MR. MAUER: Yes.
23 MR. RAFFERTY: Yes.
24 (Deposition concluded at 1:37 p.m.)
25 ***

Page 114

1 I, THOMAS F. REHME, ESQ., do

2 hereby certify that the foregoing is a true and
3 accurate transcription of my testimony.
4
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7 Dated____________________________
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Page 116
1 STATE OF OHIO )
2 COUNTY OF MONTGOMERY ) SS: CERTIFICATE
3
4 I, Patti Stachler, RMR, CRR, CLR,
5 CME, a Notary Public within and for the State
6 of Ohio, duly commissioned and qualified,
7 DO HEREBY CERTIFY that the
8 above-named THOMAS F. REHME, ESQ. Was by me
9 first duly sworn to testify the truth, the
10 whole truth, and nothing but the truth.
11 Said testimony was reduced to
12 writing by me stenographically in the presence
13 of the witness and thereafter reduced to
14 typewriting.
15 I FURTHER CERTIFY that I am not a
16 relative or attorney of either party, in any
17 manner interested in the event of this action,
18 nor am I, or the court reporting firm with
19 which I am affiliated, under a contract as
20 defined in Civil Rule 28(D).
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Page 117
1 IN WITNESS WHEREOF, I have
2 hereunto set my hand and seal of office at
3 Dayton, Ohio, on this 16th day of March 2016.
4
5
6
7 __________________________________
PATTI STACHLER, RMR, CRR, CLR, CME
8 NOTARY PUBLIC, STATE OF OHIO
My commission expires 10-5-2018
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 EXHIBIT 17
S. florner Depo. (U +S)
McGirr, Connie, et al. v. Rehme, Thomas F., et al. Steve Horner, CPA

Page 1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
* * *
CONNIE MCGIRR, et al.,
Plaintiffs,
vs. CASE NO. 1:16-cv-464
THOMAS F. REHME, et al., VOLUME I
Defendants.
* * *
Deposition of STEVE HORNER, CPA, Witness
herein, called by the Plaintiffs for
cross-examination pursuant to the Rules of Civil
Procedure, taken before me, Vicky L. Marcon, a
Notary Public within and for the State of Ohio, at
the offices of Dinsmore, 255 East Fifth Street,
Suite 1900, Cincinnati, Ohio, on Tuesday, May 24,
2016, at 10:05 a.m.
* * *

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McGirr, Connie, et al. v. Rehme, Thomas F., et al. Steve Horner, CPA

1 EXAMINATION CONDUCTED PAGE 1 APPEARANCES:

2 On behalf of the Plaintiffs:
2 BY MR. SULLIVAN: 5 3 Dinsmore
3 4 By: Brian S. Sullivan
Attorney at Law
4 EXHIBITS MARKED PAGE 5 255 East Fifth Street
5 Suite 1900
Deposition Exhibit No. 1 - Delaware Bank 6 Cincinnati, Ohio 45202
6 Checking Account Document.....................9 513-977-8233
7 [email protected]
7 Deposition Exhibit No. 2 - North Side Bank 8 On behalf of Defendant, Stan Chesley:
8 Document.....................................30 9 Frost Brown Todd, LLC
10 By: Vincent E. Mauer
9 Deposition Exhibit No. 3 - Letter from Attorney at Law
10 Cohen Todd firm to Semple and Associates 11 3500 Great American Tower
301 East Fourth Street
11 dated 12/4/14................................45 12 Cincinnati, Ohio 45202
12 Deposition Exhibit No. 4 - Letter from 513-651-6785
13 [email protected]
13 Mr. Nelson to Semple and Associates..........46 14 On behalf of the Defendant, Waite,
14 Deposition Exhibit No. 5 - E-mail from Rick Schneider, Bayless & Chesley:
15
15 Nelson to Brent Semple.......................47 Cohen, Todd, Kite & Stanford, LLC
16 16
Deposition Exhibit No. 6 - E-mail from Cohen
By: Donald J. Rafferty
17 Todd firm to Brent Semple dated 1/28/16......58 17 Attorney at Law
18 250 East Fifth Street
Deposition Exhibit No. 7 - Document 18 Suite 2350
19 Regarding Auction............................60 Cincinnati, Ohio 45202
19 513-421-4020
20 Deposition Exhibit No. 8 - E-mail Chain [email protected]
21 Beginning with E-mail from Brent Semple to 20
Also present: Angela Ford
22 Tony dated 5/11..............................60 21
23 Deposition Exhibit No. 9 - E-mail Exchange * * *
22
24 between Stan Chesley and Brent Semple........64 23
25 24
25

Page 2 Page 4

1 EXHIBIT MARKED PAGE 1 STEVE HORNER, CPA

2 Deposition Exhibit No. 10 - Letter from 2 of lawful age, Witness herein, having been first
3 Mr. Horner...................................65 3 duly sworn as hereinafter certified, was examined
4 Deposition Exhibit No. 11 - Copies of Checks 4 and deposed as follows:
5 from North Side Bank.........................69 5 CROSS-EXAMINATION
6 Deposition Exhibit No. 12 - Waite, Schneider, 6 BY MR. SULLIVAN:
7 Bayless & Chesley Profit and Loss Document 7 Q. Tell us your name, please.
8 dated 8/14 through 2/16......................79 8 A. Steven C. Horner.
9 Deposition Exhibit No. 13 - Waite, Schneider, 9 Q. Okay if I call you Steve?
10 Bayless & Chesley WIP Report 10 A. Sure.
11 as of 12/31/10..............................105 11 Q. All right. Steve, I'm Brian
12 Deposition Exhibit No. 14 - Financial 12 Sullivan. I represent the plaintiffs in a
13 Statement as of 12/31/12....................118 13 lawsuit filed here in the Southern District of
14 Deposition Exhibit No. 15 - Statement of 14 Ohio against Mr. Rehme, Mr. Chesley and Waite
15 Financial Condition dated 12/31/11..........120 15 Schneider. It's pending before Judge Cleland.
16 Deposition Exhibit No. 16 - Statement of 16 Have you ever given a deposition before?
17 Financial Condition dated 12/31/12..........122 17 A. No.
18 Deposition Exhibit No. 17 - Financial 18 Q. All right. It's kind of a simple
19 Statement as of 12/31/11....................124 19 process. You understand you're under oath?
20 20 A. Yes.
21 21 Q. Okay. I'm going to ask you
22 22 questions, obviously about your work at Waite
23 23 Schneider. If you do not understand a
24 24 question, do not answer it. Okay?
25 25 A. Okay.

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1 Q. Just ask me to clarify and I'll do 1 Schneider, Bayless and Chesley, do you do it at
2 that. I will tell you if you answer a question 2 the office?
3 I'm going to assume you understood it. All 3 A. Yes.
4 right? 4 Q. We'll get into this in detail, but
5 A. Okay. 5 over the years have you also been involved from
6 Q. If you want to take a break at any 6 an accounting perspective of other entities
7 time, just let me know. 7 that Mr. Chesley either owns directly or part
8 A. Okay. 8 of?
9 Q. No problem there. Who's your 9 A. Yes.
10 current employer? 10 Q. So, if I ask you questions, which
11 A. Waite, Schneider, Bayless and 11 I'll do later, about things like Negra
12 Chesley. 12 Enterprises, you're familiar with that?
13 Q. And how long have you been at 13 A. To a degree.
14 Waite Schneider? 14 Q. And Kumler, Cory Kumler, LLC?
15 A. Since August of '08. 15 A. No.
16 Q. What is your job function? 16 Q. Have you seen the windup
17 A. Well, I started as the CFO of the 17 agreement?
18 firm. Now I'm in more of an accountant's role 18 A. Yes.
19 assisting in a windup of the firm. 19 Q. Do you have a purpose at Waite
20 Q. Are you a CPA? 20 Schneider as it relates to the windup of the
21 A. I am a CPA, but I have a 21 affairs of Waite Schneider?
22 nonpracticing registration with the State of 22 A. I'm not sure I understand what
23 Ohio. I've not been in public accounting since 23 you're asking me.
24 the 80's. 24 Q. Are you tasked to do something to
25 Q. Have you worked for a law firm 25 help the firm wind up its affairs?

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1 before Waite Schneider? 1 A. I would have to answer that by

2 A. No. 2 saying generally my role is to assist in the
3 Q. All right. From 2008 until the 3 windup.
4 windup started in 2013, can you describe for me 4 Q. And if you're assisting, who all
5 your job functions? 5 are you assisting?
6 A. Administrative, kind of an office 6 A. Well, Tom Rehme is the president,
7 manager's role, and then I also oversaw the 7 so Tom.
8 cash function of the firm. 8 Q. Anyone else?
9 Q. From 2008 to 2013 who was your 9 A. I would say no.
10 direct report? 10 Q. All right. You are aware of the
11 A. Well, it started out as Fay Stilz. 11 Allen Davis case?
12 She passed away a couple, a few years ago. She 12 A. Yes.
13 got sick and passed away. And then after that 13 Q. You're aware that the firm
14 it was Stan Chesley. 14 received a settlement in that case?
15 Q. Do you still interact with Stan on 15 A. Yes.
16 a regular basis? 16 Q. All right. I'm going to hand you
17 A. A couple of times a week. 17 what I'll mark as Exhibit 1 to your deposition.
18 Q. I understand from Mr. Rehme that 18 (Thereupon, Deposition Exhibit No. 1,
19 Stan comes in the office pretty regularly? 19 Delaware Bank Checking Account Document, was
20 A. Define regularly. 20 marked for purposes of identification.)
21 Q. Multiple times a week. 21 Q. Steve, are you aware that Waite
22 A. It varies. There are weeks when 22 Schneider -- I'll represent to you Waite
23 he is in there several days and there are weeks 23 Schneider has produced documents to us in this
24 when he hardly comes in at all. 24 matter. Were you involved in the gathering of
25 Q. When you do work for Waite, 25 those documents to give to Mr. Rafferty?

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1 A. Yes. 1 Q. Signature authority.

2 Q. Okay. Similarly, I took 2 A. Okay. My recollection was Tom and
3 Mr. Rehme's deposition several months ago. 3 myself.
4 There were some documents produced then. Do 4 Q. Are you an officer of Waite
5 you know if you were involved in the gathering 5 Schneider?
6 of those documents? 6 A. No.
7 A. I have assisted in gathering 7 Q. Have you ever been?
8 documents. I -- I would imagine I may have 8 A. No.
9 assisted in some of those, but without seeing 9 Q. All right. So $5 million was
10 the documents I wouldn't know for sure. 10 deposited. Do you see that?
11 Q. Okay. We'll get to that. Let's 11 A. Yes.
12 start at the top. What is the Delaware Bank 12 Q. All right. Let me back up. Did
13 checking? 13 you create this document?
14 A. It was a checking account set up 14 A. I created this spreadsheet, yes.
15 last fall. 15 Q. Okay. And you created this from
16 Q. Is the name of the entity Delaware 16 the records from the Delaware Bank?
17 Bank? 17 A. Yes.
18 A. Yeah. It's in Delaware, Ohio. I 18 Q. Okay. Had there been any other
19 think it's Delaware Bank and Trust. 19 deposit in the Delaware Bank account other than
20 Q. And who opened the account? 20 the $5 million?
21 A. Well, I -- I was involved in 21 A. No.
22 getting the resolution put together. I 22 Q. Do you know if the $5 million came
23 remember discussions with Marion Little, but I 23 from Marion Little's IOLTA account?
24 don't know who technically opened it, but I do 24 A. The money initially went into his
25 know that I was involved in putting together 25 IOLTA -- the $5 million initially went into his

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1 the resolutions, you know, that you need to 1 IOLTA account. There were disbursements from
2 open a bank account. 2 the IOLTA account before the deposit was made
3 Q. Is the account in the name of 3 into the firm's account. This spreadsheet is
4 Waite Schneider? 4 kind of a combined spreadsheet just to track
5 A. It was closed, but it was in the 5 the activity of the $5 million.
6 name of Waite Schneider. 6 Q. So the initial deposit of
7 Q. Okay. And did it open sometime 7 $5 million is not the exact number that was
8 around September 2015? 8 deposited initially. Right?
9 A. Yes. Yes. 9 A. That's correct.
10 Q. And when did it close? 10 Q. Okay. Marion Little took his fee
11 A. It was either in November or 11 out of the IOLTA account before he transmitted
12 December of '15. 12 the balance to Waite Schneider?
13 Q. What was the purpose of opening 13 A. Yes.
14 the Delaware -- 14 Q. Okay. You'll see there's a
15 A. I don't know. 15 Johnson Trust pension contribution of
16 Q. Do you have any idea why Delaware 16 $1.6 million?
17 Bank and Trust was selected as an entity for 17 A. That's correct.
18 Waite Schneider to have an account? 18 Q. Whose pension did you contribute
19 A. No. No. 19 to?
20 Q. Okay. Do you know where the 20 A. The firm's.
21 $5 million you see on the deposit -- let me 21 Q. All right. Who are the
22 back before that. Who all had authority on 22 participants in September of 2015?
23 that account? 23 A. The plan was frozen, I believe, as
24 A. My recollection -- you're talking 24 of December 31, 2009. And it would have been
25 about to sign? 25 any eligible employee. There were minimum

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1 hour -- minimum hours worked and time service 1 Q. Tell me how you would word it.
2 with the firm requirements. So it would have 2 A. There's a funding requirement.
3 been anybody who met those requirements prior 3 Okay. So it's not like a 401K plan where money
4 to that date. 4 goes specifically into the plan. Money is --
5 Q. You would agree with me that at 5 people are entitled to a lump sum amount, and
6 least as of September 2015 other -- well, let 6 my understanding is that the actuary totals
7 me strike that question. What's the date where 7 those lump sum amounts and deposits are made to
8 you're trying to figure out a cutoff as to 8 fund the total. Does that make sense?
9 whose particular account this pension 9 Q. Okay. Who is the actuary that was
10 contribution was made? 10 used?
11 A. I wouldn't say it was a date 11 A. Chuck Schneider.
12 cutoff. I'm not an actuary, but there's -- the 12 Q. What's the name of his firm?
13 actuary for the plan kept, you know, running 13 A. It was Schneider and Brown and now
14 total of what was to be allocated to each 14 it's Schneider, Male and Strakowski.
15 person's, each participant's account. And so 15 Q. Are they in Cincinnati?
16 does that answer your question? 16 A. In a suburb. I don't remember the
17 Q. Yes and no. I guess I'm trying to 17 address.
18 figure out -- well, let me ask it this way. Of 18 Q. So it's like a defined benefit
19 this $1.6 million, did any of that money go to 19 plan?
20 Stan's pension account? 20 A. It is. It is a defined benefit
21 A. Stan's pension account was a 21 plan.
22 portion of that, if that makes sense, but I 22 Q. All right. After the pension
23 don't know how much of it -- there's a total, 23 contribution of 1.67 was made, was the
24 like, pension liability, okay, of which Stan 24 underfunded pension then fully satisfied?
25 was a part, but I don't know what Stan's pro 25 A. Yes. To my understanding it was,

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1 rata percentage would have been. 1 yes.

2 Q. Other than Stan, can you think of 2 Q. And you're not able to tell me, as
3 any other current or former employee whose 3 you sit here today, of the 1.67 how much of
4 pension account was part of this pension 4 that went to Stan's account?
5 contribution? 5 A. No. No, I couldn't tell you the
6 A. It would have been -- it would 6 number.
7 have been anybody who had not taken a 7 Q. More than 50 percent?
8 distribution as of that date. The highly 8 A. I don't know. I don't want to
9 compensated employee is primarily the attorneys 9 speculate.
10 were not allowed to take distributions because 10 Q. You would have records, though,
11 the plan was underfunded. 11 that would probably tell us that?
12 Q. Right. I'm trying to find -- give 12 A. Chuck would have them.
13 me a name of somebody other than Stan Chesley. 13 Q. Other than Chuck, would you have
14 A. Paul DeMarco, Louise Roselle, Bill 14 records?
15 Markovits. I'd have to -- Robert Steinberg, 15 A. There may be correspondence from
16 Arthur Rabourn. 16 Chuck that listed each person's, you know,
17 Q. Okay. So people who left the 17 balance that would be distributed.
18 firm -- 18 Q. We'll come back to the pension
19 A. Correct. 19 here in a little bit. The next thing is the
20 Q. -- before September '15? 20 Marion Little firm. Do you see that
21 A. Correct. 21 $2 million?
22 Q. A $1.6 million pension 22 A. Yes.
23 contribution was made. Part of that 23 Q. Then it's Frost Brown Todd. Do
24 contribution went to their account? 24 you see that?
25 A. Well, I would word it differently. 25 A. Yes.

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1 Q. Who told you to pay Frost, Brown, 1 Q. -- have been paid to Frost Brown?
2 Todd? 2 A. Yes.
3 A. I didn't make that distribution. 3 Q. For Stan's personal
4 I was out of town. I was actually on vacation. 4 representation?
5 Q. All right. Who signed -- was it a 5 A. Yes.
6 check? 6 Q. Who at Waite Schneider said that
7 A. I believe -- I believe it was a 7 was okay?
8 wire transfer. 8 A. Prior to the windup agreement?
9 Q. Who authorized the wire transfer? 9 Q. Yes.
10 A. I don't know. I don't know. As I 10 A. Stan.
11 say, I was out of town. 11 Q. All right. Then you would agree
12 Q. Who had the authority to authorize 12 that the windup agreement is something that was
13 a wire transfer in September 2015? 13 signed and executed between Stan and Mr. Rehme?
14 A. I would think it was Tom, but I 14 A. Yes.
15 don't know. 15 Q. And after the windup agreement
16 Q. You are aware that Frost Brown has 16 Waite Schneider has continued to pay for Frost
17 represented Stan personally in a number of 17 Brown's representation?
18 these cases for a number of years? 18 A. Yes.
19 A. Yes. 19 Q. And you are aware that that
20 Q. And you are aware that the firm, 20 continues currently?
21 Waite Schneider, has paid for Stan's lawyers at 21 A. Yes.
22 Frost, Brown, Todd? 22 Q. So, as of, say, last month, Waite
23 A. Yes. 23 Schneider is paying for Stan's lawyer?
24 Q. Who decided that Waite Schneider 24 A. Actually, last month the payment
25 would pay for Stan's lawyers? 25 was made from Stan's personal checking account.

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1 A. According to -- my understanding 1 Q. Before last month?

2 is that the windup agreement allows 2 A. There may have been a time that a
3 indemnification for Stan, and Tom is aware -- I 3 check was written from the firm.
4 -- does that answer your question? 4 Q. And you have been operating under
5 Q. Not really, because you are aware 5 the belief that because of the windup agreement
6 that before the windup agreement Frost Brown 6 that Waite Schneider should pay the Frost Brown
7 was representing Stan? 7 legal bill?
8 A. Yes. 8 A. Yes.
9 Q. And you are aware that Waite 9 Q. All right. And Frost Brown is not
10 Schneider paid for Frost Brown's legal bills? 10 the only law firm representing Stan personally.
11 A. Yes. Yes. 11 Correct?
12 Q. Who said let's write a check to 12 A. That's correct.
13 Frost Brown for Stan's personal legal 13 Q. This next firm Benton, Benton,
14 representation? 14 Luedeke?
15 A. I don't know who authorized this 15 A. Yes. Yes.
16 distribution. I don't. 16 Q. You are aware that that firm has
17 Q. I'm not focussed on this 17 represented Stan for many years --
18 distribution. 18 A. Yes.
19 A. Okay. 19 Q. -- personally?
20 Q. I'm now pre windup, so before 20 A. Yes.
21 this. 21 Q. And that the Waite Schneider firm
22 A. Okay. 22 has paid for that representation?
23 Q. Hundreds of thousands of 23 A. Yes.
24 dollars -- 24 Q. And prior to the windup I assume
25 A. Yes. 25 it's because Stan decided to do so?

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1 A. Yes. 1 those distributions would have actually been from

2 Q. And since the windup it's because 2 Marion Little's IOLTA account.
3 of this windup agreement? 3 Q. So Marion Little wired 200,000 to
4 A. Yes. 4 Waite Schneider? Is that what you're telling
5 Q. Are you able to tell me how many 5 me?
6 millions of dollars Waite Schneider has paid -- 6 A. Yes.
7 A. No. No. 7 Q. And then Waite Schneider, you
8 Q. You've got to let me finish the 8 know, since that date, wrote a check to Stan
9 question, Steve. 9 for $100,000? You won't find it on this piece
10 A. I apologize. 10 of paper.
11 Q. -- how many millions of dollars 11 A. Oh. Yes. Yes, the firm -- okay.
12 Waite Schneider has paid for Stan's lawyers 12 Q. Now my question is why did the
13 since whenever this saga started? 13 firm write a check to Stan after September 18,
14 A. No. 14 2015, for $100,000?
15 Q. All right. You know, then, that 15 A. For Stan -- to enable Stan to pay
16 next there's a WSBC of $100,000? 16 expenses, household expenses.
17 A. Yes. 17 Q. What did he do to earn $100,000?
18 Q. You do know that a check was 18 A. My understanding, according to the
19 written to Mr. Chesley on about that time out 19 windup agreement, is that, provided that the
20 of the Waite Schneider account for $100,000? 20 firm has adequate cash reserves to fund ongoing
21 A. I believe that would have been a 21 operations, that it is acceptable for the firm
22 wire, but yes. 22 to make distributions to Stan.
23 Q. Okay. Why did Waite Schneider pay 23 Q. Okay. So you're of the
24 Stan $100,000 in September of 2015? 24 understanding that, at least in this period,
25 A. As I say, that -- I was out of 25 Stan needed money for household operations, and

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1 town during that period. So I don't know. 1 Waite Schneider wrote a check for a hundred
2 Q. Okay. You're going to have to 2 thousand?
3 help me. When were you out of town? 3 A. Yes.
4 A. From -- it was the 21st or 22nd 4 Q. And either Mr. Rehme or
5 through the 29th, I believe, something like 5 Mr. Chesley would have approved that. Right?
6 that. I was on vacation. 6 MR. RAFFERTY: Objection. Go ahead.
7 Q. All right. So September 21, give 7 THE WITNESS: I don't -- I don't --
8 or take, till the -- 8 Stan's not authorized to make -- to approve that
9 A. It might have been the 22nd, but 9 sort of a distribution.
10 as I say, those -- those wires that happened in 10 Q. You're aware, Steve, that even
11 and around that time frame happened without my 11 though Stan's not a signatory on the account,
12 -- I didn't know about them until after they 12 he's told you to cut checks to him or for his
13 had happened. 13 benefit. Right?
14 Q. And, at the time, the only person 14 A. He has given me bills. I do his
15 who was authorized to allow a wire on the North 15 check writing for him, and he has given me
16 Side account was you and Mr. Rehme? 16 bills and asked me to pay them. And, as I say,
17 MR. RAFFERTY: Objection. Go ahead. 17 my understanding is that the firm is allowed to
18 THE WITNESS: I -- you know, as I 18 distribute money to Stan per the windup
19 look at this, I -- I would have to go back and 19 agreement provided that there's funds
20 look at the records. Some of those wires might 20 available.
21 have actually gone from Marion Little's IOLTA 21 Q. Okay. And you're relying on the
22 account. As I say, I don't remember the exact -- 22 windup agreement for that authority?
23 the exact date that the funds -- well, as I look 23 A. Yes.
24 at this, the funds weren't transferred into the 24 Q. Okay. Other than Stan, is there
25 firm's checking account until October 23rd. So 25 any other member of his household that has

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1 asked you to pay Chesley household expenses 1 expense on the American Express card?
2 from the Waite Schneider accounts? 2 A. Little, if any.
3 A. No. Stan gives me the bills. 3 Q. So, if there's any personal
4 Q. And how do you distinguish between 4 expenses, it's attributable to Stan?
5 paying the check out of Stan's account or 5 A. Oh, no, no, no. Let me clarify.
6 paying the -- not the check, pay the invoice 6 Tom never would have charged a personal expense
7 out of Stan's personal account or pay the 7 on the American Express. Stan would be the
8 invoice out of the Waite Schneider account? 8 only one who -- Stan or -- yes.
9 A. Generally, if it's a household 9 Q. So let's take for instance. If
10 account, I'm sorry, a household bill, I would 10 the American Express invoice is $20,000 --
11 pay for it out of Stan's personal checking 11 A. Okay.
12 account. 12 Q. -- and you find that it's all
13 Q. And then if it's what does it come 13 personal, it relates to dining or shopping or
14 out of Waite Schneider? What's the criteria? 14 travel, whatever --
15 A. The only exception I can think of 15 A. Yes.
16 is there are credit card bills, that some of 16 Q. -- for Mr. Chesley, what
17 the expenses are firm, some are Stan, and those 17 administrative accounting function do you take
18 are paid out of the firm's account, and then 18 to figure out how that is accounted for?
19 Stan's portion is allocated to like a draw. 19 A. I'm not sure I understand what
20 Q. Speaking of credit card, you're 20 you're -- are you asking me from like a journal
21 aware there's a series of American Express 21 entry standpoint? I'm not sure I understand
22 cards? 22 your question.
23 A. Yes. 23 Q. You said earlier as it relates to
24 Q. And Stan uses those. Correct? 24 a draw for Stan.
25 A. Yes. 25 A. Okay.

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1 Q. And he uses them for personal 1 Q. So does he get a draw now?

2 matters? 2 A. Well, it's -- that's an accounting
3 A. Yes. 3 term. When the American Express bill was put
4 Q. And the firm cuts the check to 4 into the accounting system, the charge has to
5 American Express? 5 be allocated to different places on the general
6 A. Yes. 6 ledger. So, if there's an office supply, it
7 Q. All right. And you tell me you 7 gets allocated to office supplies. If it's a
8 tally somehow between whether it's a personal 8 personal expense of Stan's, it gets allocated
9 expense or a business expense? 9 to what I'm referring to as the drawing
10 A. Yes. 10 account.
11 Q. Would -- 11 Q. As I understand, in 2015 Stan was
12 A. Well, no. Those aren't used 12 not a W-2 employee of Waite Schneider.
13 exclusively by Stan. You know, if Melissa 13 Correct?
14 orders office supplies or something like that, 14 A. That's correct.
15 those would be allocated to the firm. 15 Q. Same in 2014?
16 Q. Right, but I've seen in, say, 2014 16 A. That's correct.
17 American Express monthly charges, 20, 25,000 or 17 Q. Same with 2013, before April 15,
18 more dollars. As I understand, the only people 18 2013?
19 at that time were Mr. Rehme, Mr. Chesley, you 19 A. I don't remember the --
20 and Melissa. Right? 20 Q. I mean after.
21 A. Yes. 21 A. I don't remember the exact cutoff
22 Q. I assume you didn't run up any 22 date, but there was some point in there he
23 personal expense on the American Express card? 23 stopped receiving a salary.
24 A. No. 24 Q. Okay. But he does get money from
25 Q. Did Mr. Rehme run up any personal 25 Waite Schneider?

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1 A. Distributions, yes. 1 to that discussion.

2 Q. There's a lot of checks written to 2 Q. Okay. And the people on the
3 him since 2014 on the North Side account? 3 account, when the account was opened up, who
4 A. Yes. 4 could sign were you, Mr. Rehme and Mr. Chesley?
5 Q. All right. I'm going to ask you 5 A. As I recall, yes.
6 about those. We're going to come back to this 6 Q. Okay. This Exhibit 2 is what
7 in a second, but let me ask you -- I'm going to 7 we're able to gather from the North Side
8 hand you Exhibit 2. 8 checks --
9 (Thereupon, Deposition Exhibit No. 2, 9 A. Okay.
10 North Side Bank Document, was marked for purposes 10 Q. -- that were made payable on the
11 of identification.) 11 Waite Schneider account to Mr. Chesley. Okay?
12 Q. Steve, Waite Schneider in 2014 and 12 A. Yes.
13 2015 had an account at North Side? 13 Q. We had a whole glob of checks
14 A. I believe it was opened in August 14 produced.
15 or September of '14. 15 A. Yes.
16 Q. And when it was opened in August 16 Q. And you'll see, Steve, there's
17 of '14 Stan was one of the signers on the 17 sort of, best I can tell, no rhyme or reason to
18 account, wasn't he? 18 the amount or the timing.
19 A. Yes. 19 A. Okay.
20 Q. And that entitled him to write a 20 Q. I'm trying to have you help me
21 check on the North Side account? 21 figure out, for instance, let's just start with
22 A. We're talking about the firm's 22 the first check, why he got 20,000 on
23 account. Correct? 23 September 18th and less than a month later he
24 Q. Yes. 24 got 45,000.
25 A. Yes. 25 A. As I was saying before, Stan gives

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1 Q. And you are aware he signed 1 me bills, requests that I pay them, and
2 checks? 2 provided that the firm has adequate funds to
3 A. Yes. 3 cover the firm's expenses, it's my
4 Q. And you're aware that there's been 4 understanding that I'm allowed to distribute
5 some dispute as to whether it's your signature 5 money to Stan for him to pay his bills. Tom is
6 or his signature? 6 aware that I do that.
7 A. Yes. 7 Q. You are not telling me, are you,
8 Q. Have you reviewed those checks 8 that he gave you bills, for instance, that
9 that the Court had reviewed over in Kentucky as 9 total approximately $20,000 on September 18
10 to whose signature was on those? 10 which then would cause you to write a check to
11 A. I didn't review all of the checks, 11 him personally for that amount?
12 but I'm aware of the issue. 12 A. He has -- the cost of his house is
13 Q. But without reviewing the checks, 13 expensive.
14 you're aware he signed checks on the Waite 14 Q. I appreciate that, but before each
15 Schneider account at North Side? 15 of these checks were cut, did he give you
16 A. Yes, he did sign some. 16 documents which satisfied you that the amount
17 Q. And then sometime in 2015 he came 17 on the check actually coincides with the amount
18 off the account? 18 of the bills he's given you?
19 A. Yes. It was basically a mistake 19 A. I wouldn't put it that way. He
20 that he was added. He -- he should have never 20 gives me bills on an ongoing basis, and from
21 been on that account. It was a correction of 21 time to time I write checks from his personal
22 an error, if you will. 22 account on his behalf to pay the bills. And
23 Q. Okay. Who decided it was a 23 so, typically, a distribution coincides roughly
24 mistake? 24 with the amount of money required to pay the
25 A. I -- I wasn't -- I wasn't a party 25 bills that are being paid at that time.

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1 Q. Right. But as it relates to the 1 that if we tally these, which you see in the
2 payments to him directly -- 2 total, that since August of '14 through
3 A. Okay. 3 February of '16 almost $5.4 million was written
4 Q. -- essentially, he brings to you 4 out of the Waite Schneider corporate account
5 and says, I want a check for $20,000? 5 North Side --
6 A. No. No. That's not -- that's not 6 A. Yes.
7 the way it works. 7 Q. -- and given to Stan Chesley
8 MR. RAFFERTY: It's just not what his 8 directly?
9 testimony has been. 9 A. Yes.
10 Q. Okay. Then let's work our way 10 Q. All right. Were you --
11 through it. 11 MR. RAFFERTY: Are you asking him to
12 A. Okay. 12 just confirm that that's the total at the bottom
13 Q. Because there's a lot of these -- 13 or that, assuming every one of these is
14 A. Okay. 14 accurately --
15 Q. -- and a whole lot of different 15 MR. SULLIVAN: Yeah.
16 amounts, a lot of different times. I'm trying 16 MR. RAFFERTY: -- accounted for --
17 to figure out if there's a pattern. For 17 MR. SULLIVAN: Right. Yeah.
18 instance, we'll jump to the $2 million payment. 18 MR. RAFFERTY: -- the total is that?
19 A. That was for payment of taxes -- 19 MR. SULLIVAN: We have all the checks
20 Q. Okay. 20 if you want to look at them, but this is intended
21 A. -- specifically. 21 to be a summary of all of those.
22 Q. So you have information provided 22 Q. All right. Since February,
23 by him that justifies the need to give him 23 because that's the last records we have, has
24 $2 million? 24 Waite Schneider paid any additional monies
25 A. Actually, that came from the 25 to Stan?

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1 accounting firm who handled his taxes or 1 A. Yes.

2 handles his taxes. 2 Q. Do you know how much?
3 Q. Was that for tax year 2014? 3 A. I don't know the number. I
4 A. Yeah. Yes, I believe it was. 4 wouldn't want to hazard a guess.
5 Q. You're aware there's a federal tax 5 Q. Okay. Could you tell me the last
6 lien against him for tax year 2014? 6 time that was done?
7 A. Yes. 7 A. In the last week or two.
8 Q. Of over three-and-a-half million 8 Q. And that was the same thing, that
9 dollars? 9 Stan needed money to pay bills?
10 A. Yes. 10 A. Yes.
11 Q. Any explanation why you didn't 11 Q. Were you ever aware of an order
12 write more checks to him to satisfy his tax 12 from the Boone Circuit Court on June 23, 2015,
13 obligation? 13 concerning Stan and his obligation to turn over
14 A. Availability of cash. 14 monies?
15 Q. Would the same account be true on 15 A. Yes.
16 January 9th of $1.1 million, that's another tax 16 Q. You had read that order?
17 obligation? 17 A. Yes, I've seen it.
18 A. No. No. I don't remember what 18 Q. Was there any discussion that you
19 that was for. I'd have to research it. I 19 had with Mr. Chesley about whether monies --
20 don't remember. 20 A. No.
21 Q. Any explanation as to the 12/29 21 Q. You've got to let me finish the
22 payment of half-a-million dollars? 22 question.
23 A. Yeah. That was Ohio taxes for the 23 A. Sorry.
24 same year. 24 Q. -- whether any monies should be
25 Q. Okay. Would you agree with me 25 paid to the plaintiffs in that case pursuant to

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1 that court order? 1 actually did that or he just relies on you to

2 A. No. 2 say --
3 Q. You're aware that there was a 3 A. I would say he relies on me.
4 similar order in September of last year? 4 Q. Okay. Let me switch gears for a
5 A. Yes. 5 minute. You are aware of who Laura Cohen is?
6 Q. And you recall seeing in that 6 A. It's Lauren.
7 order that the judge ascribes Stan's treatment 7 Q. Oh, Lauren. I'm sorry. Lauren
8 of Waite Schneider as a sham? 8 Cohen?
9 A. Yes. 9 A. Yes.
10 Q. And that he disregarded the 10 Q. Is that Stan's daughter?
11 corporate entity? 11 A. Yes.
12 A. Yes. 12 Q. Do you know why she was an
13 Q. And that he directed that monies 13 employee of Waite Schneider?
14 from Waite Schneider be transferred to the 14 A. She was in the -- involved in
15 plaintiffs? 15 marketing.
16 A. Yes. I've seen that. 16 Q. Do you know for how long she was
17 Q. Any discussion with Stan about 17 working?
18 fulfilling that obligation? 18 A. No, I really don't. I'd have to
19 A. No. No. 19 look it up.
20 Q. Same question with Mr. Rehme. Any 20 Q. So she's not a lawyer. Right?
21 discussion with Mr. Rehme about either of those 21 A. No.
22 two events, June 23 or September -- 22 Q. Did she come to work every day?
23 A. Tom has never told me to 23 A. No. I don't recall, but I would
24 distribute money per that order. 24 say no.
25 Q. I understand Tom comes in the 25 Q. Do you know what she did as part

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1 office kind of late every day? 1 of the marketing?

2 A. Typically comes in sometime in the 2 A. No, I don't. I wasn't involved in
3 noon or early afternoon time frame. 3 that.
4 Q. Probably leaves about when? 4 Q. Do you know if she is still
5 A. Typically, he's there for the rest 5 employed at Waite Schneider?
6 of the day, although he doesn't come in every 6 A. She is not.
7 day. 7 Q. Do you know when she left?
8 Q. Your personal dealings with 8 A. I don't recall her date of
9 Mr. Rehme, say in the last year, you would 9 termination.
10 agree with me that he is not necessarily the 10 Q. Mr. Chesley, we were talking about
11 most fact intensive person in terms of 11 him earlier, he was an employee until April 15,
12 reviewing information and approving it? 12 2013?
13 A. I don't know if that's fair to 13 A. That sounds right.
14 say. I -- that's a judgment. 14 Q. Okay. Did he get a set amount as
15 Q. It is a judgment. I'm asking for 15 a W-2 employee?
16 your interactions with him. Do you find when 16 A. Yes. He was on salary until his
17 you ask for, say, his approval to send checks 17 salary terminated.
18 out to Stan Chesley, does he look for any 18 Q. It terminated at the same time he
19 backup data? 19 resigned from the practice of law?
20 A. No. 20 A. Yes. I believe that -- I believe
21 Q. Review it carefully? 21 they were coincidental, yes.
22 A. No. 22 Q. And what was his yearly salary?
23 Q. Ask you questions? 23 A. At the time -- I don't remember
24 A. No. 24 for sure. His salary earlier, in the earlier
25 Q. Do you recall any time where he 25 years, was $1.5 million, but it was reduced,

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1 and I don't remember when it was reduced and I 1 expert, but the number of vehicles is more than
2 don't remember the number to which it was 2 thirty?
3 reduced. 3 A. It's less than 30 now.
4 Q. All right. We'll get back to 4 Q. I understand there was recently an
5 that. How about Janet Gortemoller? 5 auction?
6 A. Her name is Jeanette Gortemoller. 6 A. Yes.
7 Q. I'm sorry. Jeanette? 7 Q. And that Stan engaged Semple
8 A. Yes. 8 Auction for the purposes of selling the Waite
9 Q. It looks like here she was an 9 Schneider vehicles?
10 employee through the end of '14 and into early 10 MR. RAFFERTY: Objection.
11 '15? 11 THE WITNESS: Stan engaged?
12 A. She was actually my -- one of my 12 Q. Yeah.
13 assistants. She started with the firm in '08 13 A. The firm engaged.
14 and she -- I believe she retired in April of 14 Q. Stan negotiated on behalf of the
15 '14. I could be wrong, but she came back a 15 firm. Correct?
16 handful of times to assist me in information 16 MR. RAFFERTY: Objection.
17 gathering, and so we just reinstated her on the 17 THE WITNESS: It was an auction.
18 payroll. 18 MR. RAFFERTY: Go ahead.
19 Q. Okay. How about Matt Lad? 19 THE WITNESS: It was an auction. It
20 A. Matt Lad is the individual who 20 wasn't a negotiation.
21 takes care of the car investment. 21 Q. Stan approved the reserve on the
22 Q. So he was on the payroll at least 22 vehicle?
23 through '15. Right? 23 A. Tom approved it. At least I
24 A. He's still on the payroll. 24 believe Tom approved it.
25 Q. As a W-2 employee? 25 Q. And this auction occurred

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1 A. Yes. 1 recently. Correct?

2 Q. You say he takes care of the car? 2 A. I believe it was in March.
3 A. Yes. As you know, there's a 3 Q. And there were a number of cars
4 number of vehicles, and he is the one who takes 4 that were part of the auction process?
5 care of them. 5 A. Yes.
6 Q. Provides maintenance to them? 6 Q. And ultimately one was just
7 A. Or gets them to the maintenance 7 signed, or sold, rather?
8 shop. 8 A. One was sold at the auction, yes.
9 Q. So Waite Schneider pays for the 9 Q. All right.
10 maintenance guy on the vehicles? 10 A. As a result of the auction.
11 A. Yes. 11 (Thereupon, Deposition Exhibit No. 3,
12 Q. Did Waite Schneider pay for the 12 Letter from Cohen Todd firm to Semple and
13 maintenance guy for the vehicles while the 13 Associates dated 12/4/14, was marked for purposes
14 vehicles were titled in Susan Dlott's name? 14 of identification.)
15 A. Yes. 15 Q. Steve, this is a letter from the
16 Q. Could you tell me why? 16 Cohen Todd firm to Semple and Associates,
17 A. I don't have an answer for that. 17 December 4, 2014. Okay. I'll represent to you
18 Q. Could you tell me why Waite 18 this was produced to us pursuant to subpoena
19 Schneider even owns vehicles? 19 issued to Asset IQ. In here it references that
20 A. No. 20 Cohen Todd's client, Stan Chesley, is
21 Q. Would you agree that the value of 21 considering selling 11 of his cars. Do you see
22 the vehicles, give or take, is $5 million? 22 that?
23 A. I don't know what the value is. 23 A. Yes.
24 I'm not an expert on that. 24 Q. Those are the cars that were
25 Q. I wasn't asking if you were an 25 titled in Waite Schneider's name. Correct?

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1 A. Yes. 1 A. Yes.
2 Q. Have you seen this letter before 2 Q. SMC, you know to be Mr. Chesley?
3 today? 3 A. Yes.
4 A. I don't recall. 4 Q. So this is an example of what you
5 Q. Did you have any discussions with 5 understood Mr. Chesley was doing as it relates
6 Rick Nelson at Cohen Todd about the cars and 6 to negotiating or discussing with the auction
7 the sale and the prices and anything like that? 7 outfit about the cars?
8 A. Limited. 8 A. Stan, by a large margin, knows the
9 Q. So the answer is yes, you have? 9 most about those vehicles and is most qualified
10 A. Yes. 10 to understand what they're worth. And, once
11 Q. And you knew that the person from 11 again, my understanding under the windup
12 Waite Schneider who was doing the discussions 12 agreement is that he is allowed to assist in
13 with Semple and Associates was Stan? 13 the disposition of the assets of the firm under
14 A. Yes, I know he had discussions 14 the windup agreement. He's just not allowed to
15 with them. 15 practice law.
16 Q. Okay. And that includes 16 Q. I appreciate --
17 discussions all the way up until March when the 17 A. I mean, that's my understanding of
18 one car was sold? 18 what's going on.
19 A. I don't know when they occurred. 19 Q. I'm just trying to figure out that
20 Q. Okay. I'll show you that as the 20 here's -- you tell me if I'm wrong. Here's an
21 next exhibit. 21 asset that belongs to the law firm. Stan is
22 (Thereupon, Deposition Exhibit No. 4, 22 the person who's negotiating with the third
23 Letter from Mr. Nelson to Semple and Associates, 23 parties, including the lawyers, the
24 was marked for purposes of identification.) 24 arrangements concerning the auction. Correct?
25 Q. That's Exhibit 4. This is a 25 A. Yes.

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1 letter in October of last year from Mr. Nelson 1 Q. You're telling me it's because he
2 to Semple and Associates. Have you seen this 2 has intimate knowledge as to these vehicles --
3 before? 3 A. Yes.
4 A. I may have, but I don't recall. 4 Q. -- and their value?
5 Q. This again references cars. It 5 A. Yes.
6 says the client is Waite, Schneider, Bayless 6 Q. Okay. And it's always been your
7 and Chesley. Do you see that? 7 understanding as it relates to the vehicles
8 A. Yes. 8 titled in Waite Schneider's name that Stan is
9 Q. Okay. The cars that you're 9 the person who probably knows more about them,
10 talking about in 2015 and December of 2014 10 their value, their marketability than others at
11 is -- it's your belief it's still the same cars 11 Waite Schneider?
12 that were titled by Waite Schneider. Correct? 12 A. Yes.
13 A. Yes. 13 Q. All right. Now you do recall a
14 Q. Okay. Number five. 14 time when the cars were transferred to Ms.
15 (Thereupon, Deposition Exhibit No. 5, 15 Susan Dlott?
16 E-mail from Rick Nelson to Brent Semple, was 16 A. Yes.
17 marked for purposes of identification.) 17 Q. She paid $543,000 for the cars?
18 Q. Five, Steve, is an e-mail from 18 A. I think that was the number.
19 Rick Nelson at the Cohen Todd firm to Brent 19 Q. And the cars were actually
20 Semple. Do you see that? 20 transfer titled to her name?
21 A. Yes. 21 A. Yes.
22 Q. It indicates here in the e-mail, 22 Q. That was in 2011?
23 January 15, 2016, SMC has indicated he has no 23 A. I believe that's right.
24 problem with the 1,000 no sale fee on cars that 24 Q. Do you think that 543,000 was fair
25 do not sell. Do you see that? 25 value for 33 vehicles in the end of 2011?

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1 A. The firm was in a difficult cash 1 recall. I don't remember the number.
2 situation and the transaction was unwound a 2 Q. So one of the 33 sold recently at
3 couple of years later. And so it worked -- in 3 auction for more than 120,000 bucks?
4 essence, it worked like a loan. 4 A. Yes.
5 Q. I appreciate that. That wasn't my 5 Q. And has the money been paid for
6 question. 6 that?
7 A. Okay. 7 A. Yes.
8 Q. The question was 2011, 33 cars 8 Q. Where did the money go?
9 sold to Stan's wife for $543,000. Do you think 9 A. Into the firm's checking account.
10 that was fair value for those vehicles? 10 Q. Has it been sent out of the firm's
11 MR. RAFFERTY: Objection. Go ahead. 11 checking account?
12 THE WITNESS: I don't -- I'm not a 12 A. I don't understand the question
13 judge of that. I don't -- I don't know what the 13 that --
14 fair value of those vehicles would be. 14 Q. Well, remember back in the Davis
15 Q. Well, do you know how much you had 15 case, which we'll get to in a minute, we'll see
16 them insured for? 16 money comes into Waite Schneider, turns around
17 A. Much more than that. 17 and checks come right to Stan, same amount of
18 Q. More than $5 million. Right? 18 money. That money is coming in, over $100,000,
19 A. I don't remember the number, but 19 for the sale of this vehicle, comes back into
20 if that's the -- if you know that number, 20 Waite Schneider. Does it go back out to Stan?
21 then -- I know they were insured for more than 21 A. No.
22 that, yes. 22 Q. It's been used for some other
23 Q. Okay. Let's assume that the 23 purpose?
24 documents will show that they were insured for 24 A. It's added to the total that's in
25 more than $5 million. 25 the account. So that money was not

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1 A. Okay. 1 specifically earmarked for anything.

2 Q. So my question is, if under your 2 Q. Right. But if we know that, from
3 theory the firm is in a cash flow situation, 3 what you told me earlier, as little as a week
4 why would you sell the cars to his wife for 4 or so ago Waite Schneider paid Stan money --
5 $543,000 if at least by the insurance value it 5 A. Yes.
6 was substantially more? 6 Q. -- we could not exclude, could we,
7 A. I didn't make that decision. 7 the possibility that some of that money from
8 Q. Who did? 8 that car sale went to him?
9 A. It occurred in '11. Correct? So 9 MR. RAFFERTY: Objection. That's --
10 I would say it was Stan's decision. 10 THE WITNESS: I don't understand that
11 Q. Okay. So Stan decided to transfer 11 question. If you have money in a checking -- if
12 assets out of Waite Schneider to his wife for 12 you have $5 in a checking account and you add a
13 543. Right? 13 dollar, that you have $6 in your checking account,
14 A. Yes. 14 if I write a check for $2 out of that checking
15 Q. Now in 2014 Waite Schneider turned 15 account, where did the money come from? That
16 around and bought the cars back? 16 question doesn't make -- I'm sorry. It doesn't
17 A. Yes. 17 make any sense to me.
18 Q. For the same amount? 18 Q. That's okay. I told you, if you
19 A. Yes. 19 don't understand it, don't answer it. So I
20 Q. $543,000? 20 appreciate that. You would agree that at the
21 A. Yes. 21 time that car was sold the firm has no
22 Q. And one of those cars recently 22 outstanding debt. Right?
23 sold pursuant to this auction. How much did 23 MR. RAFFERTY: Objection.
24 that car sell for? 24 THE WITNESS: I'm trying to remember
25 A. A hundred some odd thousand, as I 25 when the apartment loan was paid off relative to

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1 the collection of the car. So I don't remember if 1 familiar with that?

2 -- the firm had an obligation on the apartment 2 A. Yes.
3 loan, and I don't remember which came first, the 3 Q. That was paid off in 2014.
4 payoff of the loan or the collection on the car. 4 Correct?
5 Q. The apartment is the condo owned 5 A. Yes.
6 by Dickens and Crumpet? 6 Q. All right. Any other debts since
7 A. Yes. 7 Fifth Third's debt in 2014 was paid off?
8 Q. And that recently sold? 8 MR. RAFFERTY: And the Dickens and
9 A. Yes. 9 Crumpet that he described.
10 Q. And I guess there was equity 10 MR. SULLIVAN: Yeah.
11 remaining after the sale? 11 THE WITNESS: I don't recall any.
12 A. Yes. 12 Q. Okay. Now back to my question we
13 Q. How much was that? 13 were talking about earlier. So there's no debt
14 A. Tens of thousands of dollars, but 14 of the firm, there's no unfunded pension
15 I don't recall the exact number. 15 obligation. Right?
16 Q. Okay. And that money came into 16 A. Yes.
17 Waite Schneider's account? 17 Q. So the payables, if you will, of
18 A. No, no. Dickens and Crumpet -- 18 the firm of Waite Schneider as we rolled into
19 the firm did not own Dickens and Crumpet. 19 2016 was the lease, your salary, Melissa's
20 Q. Okay. You would agree with me, as 20 salary and other ordinary expenses?
21 it relates to the Dickens and Crumpet condo, 21 A. Matt Lad's salary.
22 that all the time that you've been there Waite 22 Q. The car guy?
23 Schneider has paid the mortgage? 23 A. And storage costs, telephone,
24 A. Yes. 24 traditional office type expenses.
25 Q. And Waite Schneider has paid the 25 Q. Right. And then as money is

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1 maintenance and upkeep of that? 1 coming in, once that source from the sale of
2 A. Yes. 2 the car, six figures, you've used that money to
3 Q. And Dickens and Crumpet is owned 3 pay some of his expenses, and one of the
4 by either Stan or his wife? 4 expenses we know, since you just told me a
5 A. Was owned by Stan. 5 little while ago, are checks cut out to Stan,
6 Q. All right. And so the sale of 6 made payable to him?
7 that condo recently, the amount realized from 7 A. Those aren't expenses. Those are
8 the sale went to Dickens and Crumpet, which is 8 distributions.
9 wholly owned by Stan? 9 Q. Right. When a distribution is
10 A. Yes. 10 made to Stan, say recently, does he essentially
11 Q. All right. And Stan's not 11 suck out all of the cash?
12 reimbursed the firm for all of those mortgage 12 A. No.
13 payments its made for all of those years? 13 Q. And then the amount of what it
14 A. No. 14 actually is is decided by him. Right?
15 Q. Okay. Other than the Dickens and 15 A. No.
16 Crumpet debt, which we, I believe we've 16 Q. Who decides --
17 extinguished through the sale of that condo, 17 A. I make the decision as to the
18 what other debt does the firm have in 2016? 18 actual amount, and it's based on -- as I said
19 MR. RAFFERTY: Currently? Are you -- 19 before, the criteria I said, if the firm has
20 MR. SULLIVAN: Yeah. 20 adequate cash to fund its ongoing operations
21 THE WITNESS: Current debt? Not 21 and I can still make a distribution to cover
22 accounts payable, debt? 22 Stan's bills that he submitted to me, then I
23 Q. Debt. 23 make the distribution.
24 A. None. 24 Q. All right. If a payment comes in
25 Q. The Fifth Third debt, you're 25 to the firm from one of these income streams

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1 that's out there -- 1 e-mail?

2 A. Okay. 2 A. Yes.
3 Q. You're familiar that the firm is 3 (Thereupon, Deposition Exhibit No. 7,
4 going to get income streams coming in? 4 Document Regarding Auction, was marked for
5 A. Yes. 5 purposes of identification.)
6 Q. All right. There are -- as you 6 Q. Are you with me on this?
7 could tell me today, in May of 2016, there's no 7 A. I'm not --
8 debt, there's no pension contribution other 8 Q. Have you seen seven before?
9 than the ordinary expenses of running the 9 A. Oh. No, I have not. Or at least
10 business. There's nothing else to satisfy. 10 I don't recall seeing it.
11 Right? 11 Q. Okay. Would you agree this is
12 A. No, not that I know of. 12 another example of Stan's involvement in the
13 Q. Okay. All right. Let me just 13 auction process for these cars earlier this
14 finish on the car. Here's Exhibit 6. 14 year?
15 (Thereupon, Deposition Exhibit No. 6, 15 A. Yes.
16 E-mail from Cohen Todd firm to Brent Semple dated 16 Q. Does he have an iPhone?
17 1/28/16, was marked for purposes of 17 A. I'm sorry. I don't know.
18 identification.) 18 Q. So you don't know if he knows how
19 Q. This is an e-mail January 28, 19 to use it, I guess?
20 2016, from the Cohen Todd firm to Brent Semple. 20 A. He may have one. I don't know.
21 Do you see that? 21 (Thereupon, Deposition Exhibit No. 8,
22 A. Yes. 22 E-mail Chain Beginning with E-mail from Brent
23 Q. You know that to be Stan's cell 23 Semple to Tony dated 5/11, was marked for purposes
24 phone number? 24 of identification.)
25 A. No. It's -- I don't believe that 25 Q. This will be Exhibit 8. Exhibit 8

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1 it is. 1 is an e-mail May 11th from Brent Semple to

2 Q. Okay. 2 Tony. Do you see that at the top?
3 A. That's not the cell number -- 3 A. Yes.
4 that's not the cell number that -- if I call 4 Q. And below that is an e-mail from
5 Stan on his cell, that's not the number I use. 5 Stan to Brent Semple, March 9, 2016. Do you
6 Q. Fair enough. Did you see this -- 6 see that?
7 have you seen this before I showed it to you 7 A. Yes.
8 today? 8 Q. And it indicates that Waite
9 A. Not that I recall. 9 Schneider is going to get a check payable to
10 Q. Okay. At the bottom it has an 10 Semple. Do you see that?
11 e-mail from Stan at Waite, Schneider, Bayless 11 A. Yes.
12 and Chesley. Do you see that? 12 Q. And did Waite Schneider pay Semple
13 A. Yes. 13 for the cars that Stan had arranged to be
14 Q. All right. He regularly and has 14 auctioned?
15 done since the windup agreement sent out 15 A. I recall writing checks related to
16 e-mails under the Waite Schneider name? 16 it. I don't specifically remember that check.
17 A. Stan doesn't have a computer. So 17 Q. While we're on the car here, are
18 he doesn't send the e-mails. Melissa does. 18 you familiar with Milford One -- I think it's
19 Q. If Stan directs that an e-mail be 19 called Milford One, LLC?
20 sent under his name, will you agree with me 20 A. Yes.
21 that even after the windup agreement it went 21 Q. What is that?
22 out under the Waite Schneider domain name? 22 A. It's an old, very old car
23 A. Yes. 23 dealership building in Milford.
24 Q. Okay. And he has essentially 24 Q. And is there an LLC called Milford
25 carte blanche authority as to use of that 25 One --

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1 A. Yes. 1 interested in.

2 Q. -- that owns it? 2 A. Several hundred thousand dollars.
3 A. Yes. 3 Q. Do you know if there's any debt on
4 Q. Who owns Milford One, LLC? 4 the building?
5 A. Susan Dlott. 5 A. No. There is not.
6 Q. And did -- has Waite Schneider 6 (Thereupon, Deposition Exhibit No. 9,
7 paid money to Milford One, LLC for some 7 E-mail Exchange between Stan Chesley and Brent
8 purpose? 8 Semple, was marked for purposes of
9 A. I don't recall that ever 9 identification.)
10 occurring. 10 Q. Steve, I'm handing you Exhibit 9,
11 Q. So, if there was a check made 11 which is an e-mail exchange from earlier this
12 payable to Milford One, LLC, as far as you 12 year between Stan and Mr. Semple. Do you see
13 could tell me, as you sit here today, you 13 that?
14 wouldn't know why that was done? 14 A. Yes.
15 A. From the firm? 15 Q. All right. You recognize these
16 Q. Yes. 16 cars that are listed under the e-mail captioned
17 A. I don't recall a check being 17 Mr. Chesley, that those are cars owned by Waite
18 written to Milford One, LLC. 18 Schneider?
19 Q. Do you do the books for Milford 19 A. That -- it looks like it, yes.
20 One, LLC? 20 Q. Okay. So it's your understanding,
21 A. There is a Quick Books account, 21 at least in the discussion earlier this year,
22 and I pay the bills, the gas and electric, 22 the sale would involve more than just one
23 those sorts of things, from the Milford One 23 vehicle. Correct?
24 checking account. 24 A. Pardon me. It wasn't a sale.
25 Q. Does Waite Schneider gain any 25 Q. It was an auction. I'm sorry.

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1 benefit from Milford One, LLC? 1 A. It was an auction. And yes, it

2 A. A couple of cars are stored there. 2 was -- more than one car was entered into the
3 Q. Do you know if Susan Dlott has 3 auction.
4 been the sole owner of Milford One, LLC since 4 Q. And Mr. Chesley was the person who
5 its inception? 5 set the reserve for the vehicles. Correct?
6 A. No, she was not. 6 A. I would say that technically Tom
7 Q. Who was? 7 was, because he signed the document. He
8 A. Stan was initially. 8 ultimately set it, but Stan was involved in the
9 Q. And then he transferred his 9 discussions.
10 interests to her? 10 Q. All right. Okay. The cars that
11 A. Yes. 11 did not sell, where are they housed right now?
12 Q. Do you know when that occurred? 12 A. Either at Stan's residence or at
13 A. I believe it was in November of 13 the Milford One property.
14 2011. 14 (Thereupon, Deposition Exhibit No.
15 Q. All right. Do you know why? 15 10, Letter from Mr. Horner, was marked for
16 A. No. 16 purposes of identification.)
17 Q. Do you know if she gave anything 17 Q. Exhibit 10.
18 of value for the transfer of the sole ownership 18 A. Yes.
19 interest in Milford One, LLC? 19 Q. This is your letter?
20 A. I do not believe so. 20 A. Yes.
21 Q. Do you know of the value of the 21 Q. All right. So you paid 4450 for
22 building? 22 transportation of the vehicles?
23 A. I would have to guess. 23 A. Well, the firm paid it.
24 Q. I don't want you to guess, but if 24 Q. I'm sorry. You paid on behalf of
25 you have an estimate, that's what I'm 25 the firm?

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1 A. Yes. 1 again? I'm sorry.

2 Q. And that's indicated out here in 2 Q. The house, Milford One, the cars.
3 the bottom of this -- well, no. Then it's 3 A. Personal property. Or I guess
4 the -- it looks like the sale price was 120,000 4 that's part of the house. You mean for Stan
5 for the 1997 Ferrari? 5 personally or for the firm?
6 A. Yes. 6 Q. Either.
7 Q. And you told me, I think earlier, 7 A. There's a ransom insurance policy,
8 that money has since been received? 8 as I recall, that Stan gets each year. And
9 A. Yes. 9 then, obviously, the firm's -- there's an
10 Q. Okay. For the cars during the 10 insurance policy through Travelers that CIC
11 entire time, even when Susan owned them, Waite 11 gets for the firm.
12 Schneider paid the insurance on it, didn't it? 12 Q. Dickens and Crumpet is another
13 A. The insurance on the cars -- I'd 13 example?
14 want to get clarification from the insurance 14 A. Yes. Yes, yes.
15 agent on it, but Stan and/or Susan has paid the 15 Q. And is it your testimony that for
16 insurance on the vehicles. 16 those assets like Dickens and Crumpet did Waite
17 Q. You don't recall Waite Schneider 17 Schneider pay for the insurance or did somebody
18 ever paying CIC Insurance? That's a broker. 18 else?
19 Right? 19 A. I believe Waite Schneider paid for
20 A. I don't recall. There may have 20 that.
21 been an exception to that, but I don't recall. 21 Q. Okay. Would Waite Schneider have
22 Q. And, if there was an exception, 22 paid for the insurance on the house?
23 it's your testimony that was, in fact, the 23 A. No.
24 exception rather than the rule, Stan would -- 24 Q. Ever?
25 A. Yes. 25 A. I don't believe so.

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1 Q. And I guess by saying Stan, you 1 Q. Okay. All right. Let me switch
2 might actually process that out of his personal 2 gears on you. These are records from North
3 account at North Side? 3 Side.
4 A. Yes, to -- 4 (Thereupon, Deposition Exhibit No.
5 Q. To CIC? 5 11, Copies of Checks from North Side Bank, was
6 A. Yes. 6 marked for purposes of identification.)
7 Q. And CIC is the insurance broker 7 Q. It's Exhibit 11. And I believe,
8 that insured a lot of things for Waite 8 Steve, these are checks signed by Mr. Chesley?
9 Schneider and Mr. Chesley, Ms. Dlott? 9 A. No, not all of them.
10 A. They didn't insure it. They were 10 Q. Okay. Tell me, looking at this
11 the agency that handled getting the insurance. 11 first page, which ones have his signature and
12 Q. They placed insurance? 12 which ones do not.
13 A. Yes. 13 A. It's kind of hard to read the
14 Q. The house -- 14 numbers. The check in the bottom left-hand
15 A. Yes. 15 corner is his signature. I'm sorry. It's so
16 Q. -- was insured through CIC as the 16 small I can't read the number.
17 broker? 17 Q. It looks like it's 1019 payable to
18 A. Correct. 18 Cory Kumler.
19 Q. Milford One, LLC? 19 A. Oh. I see. Yes. I'm sorry. The
20 A. Yes. 20 numbers are clearer at the bottom. I was
21 Q. The vehicles we described? 21 looking at the check itself.
22 A. Yes. 22 Q. This is an example of a check
23 Q. What other assets are you aware of 23 where Stan had authority to sign checks for
24 that are insured by CIC as the broker? 24 Waite Schneider, correct, October of 2014?
25 A. What was the list that you gave me 25 A. Yes.

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1 Q. And he's writing a check for Cory 1 promise to pay?

2 Kumler for more than a million dollars? 2 A. Stan.
3 A. Yes. 3 Q. Is the firm on the note at all?
4 Q. Any idea why? 4 A. No.
5 A. The firm -- there were notes from 5 Q. So the firm here -- I believe what
6 Stan to Cory Kumler which the firm purchased. 6 you're telling me is when Stan wrote a check on
7 Q. And who owns Cory Kumler? 7 the firm's letterhead, I mean on the firm's
8 A. Susan Dlott. 8 checking account, it is to extinguish a debt of
9 Q. And what is the asset that Cory 9 Stan to his wife?
10 Kumler owns? 10 A. Yes.
11 A. It was cash. They were notes. 11 MR. RAFFERTY: Objection. That's not
12 Cory Kumler lent money to Stan in order for 12 what he testified. He testified that it was to
13 Stan to put into the firm for the operations of 13 purchase the notes.
14 the firm, and this was the time frame shortly 14 Q. You see down -- if you'd look at
15 after the collection of the Fannie Mae 15 the check directly across from that, 10/25 to
16 settlement, and the firm had the funds to buy 16 CIC agency.
17 those notes from Cory Kumler. That's what that 17 A. Yes.
18 transaction was. 18 Q. Is that your signature?
19 Q. And so Cory Kumler is an entity 19 A. Yes.
20 owned by Susan Dlott? 20 Q. All right. Any idea what assets
21 A. Yes. 21 Waite Schneider is paying for to insure?
22 Q. Cory Kumler gave money to Waite 22 A. Without looking at the underlying
23 Schneider in exchange for an obligation? 23 bill, I wouldn't know.
24 A. No, no. No, no. 24 Q. Okay. Look, if you would, to the
25 Q. Okay. 25 second page. See at the bottom right --

Page 70 Page 72

1 A. Cory Kumler lent money to Stan. 1 A. Yes.

2 Q. Personally? 2 Q. -- check 1051?
3 A. Yes. 3 A. Yes.
4 Q. Okay. 4 Q. That's Stan's signature. Correct?
5 A. Who, in turn, I would -- the 5 A. Yes.
6 majority of this money, I'm sure, was put into 6 Q. So Stan wrote himself a check for
7 the firm for the operations of the firm. 7 $2 million?
8 Q. All right. Did Stan ever at any 8 A. Yes. That was for the taxes.
9 time own an interest in Cory Kumler? 9 Q. And this was, as I understand your
10 A. No. No. 10 testimony, a mistake, that he was not supposed
11 Q. Can you help me understand why 11 to have check writing authority?
12 this LLC was used as the medium to transmit 12 A. That -- yes.
13 money from Susan Dlott to Stan Chesley? 13 Q. When was this sort of mistake
14 A. That's -- no. That's between 14 discovered?
15 Susan and Stan. 15 A. In early '15, as I recall.
16 Q. Okay. And then is there 16 Q. Did you see the account opening
17 commensurate with that an obligation to pay her 17 information when you signed your name as a
18 back? 18 person who's going to be an authorized signer
19 A. Well, there were notes. 19 on the North Side account for Waite Schneider?
20 Q. All right. And were those notes 20 A. I don't understand your question.
21 in her name as the maker, I mean, I'm sorry, as 21 Q. Did you see the resolution?
22 the obligee? 22 A. Yes.
23 A. Either in her name or in Cory 23 Q. And it authorized that Stan was
24 Kumler. 24 one of the parties?
25 Q. All right. And who is making the 25 A. Yes.

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1 Q. Did you think it was a mistake 1 is used.

2 then when the account was opened? 2 A. Tom, Melissa, Stan and me.
3 A. No. It did not occur to me. 3 Q. So, using this as an example,
4 Q. Okay. Who at Waite Schneider 4 you've got two American Express invoices. The
5 thought this was a mistake? 5 combined total is 26,000 plus. Any idea you
6 A. I don't know -- I don't know when 6 can help me with as to why Waite Schneider is
7 or how it was specifically discovered. I just 7 spending over 26,000 on American Express in
8 know that sometime in early '15 I was requested 8 November of 2014?
9 to put together a new resolution removing Stan 9 A. Same as what I said before. Some
10 and making Tom and myself the only signatories 10 of those were personal and some of them were
11 on the account. 11 business, but without looking at the underlying
12 Q. If you'd look at the next page, 12 bill, I wouldn't know.
13 Bates stamped 39, do you see that? This would 13 Q. It's your recollection, is it not,
14 be the second check down, the fourth item. 14 Steve, that most of those expenses Stan
15 A. I'm sorry. Can you say again? 15 incurred were personal?
16 MR. RAFFERTY: Are you on the left 16 A. Yes.
17 column? 17 Q. And if you'd turn to the next
18 Q. Yeah. I'm sorry. Left column, 18 page, page 41, right-hand side, third check
19 fourth item. There's two deposit slips? 19 from the bottom.
20 A. Okay. 20 A. Yes.
21 Q. It's check 1031. 21 Q. That's the purchase price for the
22 A. I see. Mm-hmm. 22 vehicles?
23 Q. That's Stan's signature? 23 A. That's reimbursement when the firm
24 A. Yes. 24 purchased the vehicles back from Susan.
25 Q. Do you know why he's paying the 25 Q. Right. And when we look at that,

Page 74 Page 76

1 United States Treasury? 1 you would agree it's not a loan, it's actually
2 A. That had to do -- if I can read 2 a sale to her and a return purchase from her.
3 this scribbling, that was a penalty. I believe 3 Right?
4 it was a penalty being paid related to the 4 A. I described it as effectively
5 underfunding of the pension account. 5 being a loan.
6 Q. Did you perform the calculation to 6 Q. But it was actually a title
7 figure out how much was owed? 7 transfer?
8 A. No. 8 A. Yes.
9 Q. Was that from the Schneider 9 Q. Okay. She was not listed on the
10 outfit? 10 title of the vehicles as a lienholder, was she?
11 A. Well, no. I actually believe it 11 A. I don't believe she was.
12 was from the IRS. 12 Q. All right. There's a check on
13 Q. Okay. If you'd look at the 13 page 52, check number 1129.
14 right-hand column, two down at the bottom, 14 MR. RAFFERTY: Left column.
15 you'll see there's two American Express 15 MR. SULLIVAN: Left column. I'm
16 invoices. 16 sorry. I thought by giving the number it would
17 A. Yes. 17 help.
18 Q. How many American Express cards 18 Q. Left column, fourth check.
19 were there? 19 A. I see it.
20 A. I believe that there are five. 20 Q. Forensic Economist, Economics,
21 Q. And who has authority for all 21 Inc. Do you know what that is?
22 five? 22 A. No. I don't recall what it's for.
23 A. Define authority. 23 Q. All right. If you go all the way
24 Q. Can use the card, that Waite 24 to the top, 1126, check to Dickens and Crumpet?
25 Schneider would then pay the bill if the card 25 A. I don't see it.

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1 Q. First check, left-hand side. 1 manageable.

2 A. That was -- we classified that as 2 A. Okay.
3 rent, yes, but that was a -- we made periodic 3 Q. So I'm not asking you to vouch for
4 payments to Dickens and Crumpet classified as 4 the document. That's my burden. But I do want
5 rent. 5 to ask you about topics, and I'll worry about
6 Q. So on this condo Waite Schneider 6 later as to tying about where this all came
7 paid the mortgage and the upkeep? 7 from, but it came from the Waite Schneider
8 A. No. I need to clarify something. 8 records and bank accounts. First it's a
9 My recollection the way that functioned was 9 summary, and then the second page is sort of a
10 that the firm would write a check to Dickens 10 list of the income and the expenses.
11 and Crumpet and a check was cut on Dickens and 11 A. Okay.
12 Crumpet's account to actually pay Fifth Third. 12 Q. Okay. So, if you'd turn to page
13 Q. For the mortgage? 13 two under the income, the first one is Castano
14 A. Yes. Yes. 14 Trust, of which you're familiar with that.
15 Q. So this is intended to be the 15 Right?
16 mortgage payment? 16 A. Yes.
17 A. Yes. 17 Q. And the -- you're aware that
18 Q. It just filtered through Dickens 18 Castano makes quarterly payments totalling 2.4,
19 and Crumpet? 19 $2.5 million a year. Right?
20 A. Yes. 20 A. Yes.
21 Q. But it's captioned as you 21 Q. All right. Now, would you agree
22 described it, rent? 22 with me that for a period of time as the
23 A. Yes. 23 Castano Trust money came in it went to the
24 Q. So Waite Schneider would rent a 24 Waite Schneider IOLTA account?
25 condo from Dickens and Crumpet? 25 A. Yes.

Page 78 Page 80

1 A. Yes. 1 Q. And that's the trust account?

2 Q. The rental price being the 2 A. Yes.
3 mortgage price? 3 Q. And that the money that came in
4 A. Yes. 4 from Castano in the Waite Schneider IOLTA
5 Q. Or the mortgage balance? 5 account then wired to the Johnson Trust
6 A. Yes. 6 account?
7 Q. Okay. All right. 7 A. Yes.
8 MR. SULLIVAN: Let's take a break for 8 Q. That was owned by Stan?
9 just a minute here. 9 A. Yes.
10 (Break taken.) 10 Q. So, essentially, as I gathered
11 (Thereupon, Deposition Exhibit No. 11 this, for a period of time money from Castano
12 12, Wait, Schneider, Bayless & Chesley Profit and 12 went into the trust account and the entire
13 Loss Document dated 8/14 through 2/16, was marked 13 amount of that payment went out to Stan in the
14 for purposes of identification.) 14 Johnson Trust account?
15 Q. Steve, I'm going to hand you 12. 15 A. Yes.
16 MR. RAFFERTY: What is this? 16 Q. Then at some point that changed?
17 Q. I'm not going to ask about this 17 A. Yes.
18 and expect you to know it -- 18 Q. All right. Tell me, if you can,
19 A. Okay. 19 when you remember the change and what the
20 Q. -- because I'll tell you this is 20 change was.
21 something we created. 21 A. The Fifth Third -- there was -- as
22 A. Okay. 22 you know, there was a very substantial loan
23 Q. So, Steve, this is intended to be 23 with Fifth Third Bank. It was an operating
24 a capture from the records of Waite Schneider 24 loan. And I don't remember the balance at the
25 in a form of which I think is somewhat 25 time, but they dictated, ordered, demanded that

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1 the funds be directed to them and -- so that 1 Q. Okay. Maybe I'm missing it. In
2 the payments could be used to pay down the 2 October of 2014 the Fifth Third debt was
3 operating loan. 3 extinguished?
4 Q. Up until that time that Johnson 4 A. The Fifth Third operating loan was
5 Trust account was used as essentially security 5 extinguished. There was still the obligation
6 for Fifth Third? 6 on the apartment, the Dickens and Crumpet loan.
7 A. That was -- yes. Yes. 7 Q. Okay. And that was a few hundred
8 Q. And Stan had taken money from the 8 thousand bucks?
9 Johnson Trust account and put it into Waite 9 A. I believe it was like 350 plus or
10 Schneider? 10 minus.
11 A. Yes. 11 Q. Okay. So, since the debt was
12 Q. When we talk about this 12 extinguished with Fifth Third, not the Dickens
13 $59 million -- 13 and Crumpet mortgage, in October 2014 the
14 A. Yes. 14 Castano payments have continued to be received.
15 Q. -- you would agree with me, Steve, 15 Where did the money come into?
16 that approximately 56 million of it came out of 16 A. Ultimately into the firm's
17 the Johnson Trust account that Stan owned and 17 operating account.
18 went into Waite Schneider? 18 Q. Originally in the IOLTA account?
19 A. I -- I don't know. When you say 19 A. But no longer. It goes directly
20 56 million, I'd have to review it, but 20 into the firm's operating account.
21 virtually all of the money that Stan put into 21 Q. Okay. So Castano money goes
22 the firm during the period where you talk about 22 directly into Waite Schneider?
23 the $59 million, came from the Johnson account. 23 A. Yes.
24 Q. Right. 24 Q. And obviously we saw some monies
25 A. Or the Johnson accounts. 25 are paid out to Stan?

Page 82 Page 84

1 Q. So Fifth Third, then, at least in 1 A. Yes.

2 your view, became concerned that one of the 2 Q. During that same period that
3 securities for this loan had been depleted in 3 Castano money comes into Waite Schneider, Waite
4 terms of its account? 4 Schneider turns around and cuts checks to a
5 A. Yes. 5 number of people, including Stan Chesley?
6 Q. So it required the Castano money 6 A. Yes.
7 be paid to Fifth Third to satisfy the debt? 7 Q. All right. And you would agree
8 A. Yes. Yes. 8 that, at least as represented to Fifth Third,
9 Q. And the debt that was satisfied 9 Stan was the primary beneficiary originally on
10 was not only the debt of Waite Schneider but 10 the Castano Trust?
11 Stan and his -- 11 MR. RAFFERTY: Objection.
12 A. Yes. 12 THE WITNESS: I don't know the answer
13 Q. And that continued until October 13 to that.
14 of 2014. Correct? 14 Q. But -- okay. And for how long a
15 A. That's when the loan was paid off. 15 period of time did the money come from Castano
16 Q. Right. So the debt that was 16 to the trust account and out to Stan's account
17 extinguished in 2014 was a debt extinguished of 17 at Johnson Trust?
18 both Waite Schneider and Stan personally? 18 A. Up until the time --
19 A. Yes. 19 Q. When did it start, like 2000 --
20 Q. And since October of 2014 where 20 A. Well, keep in mind I started in
21 have the Castano Trust payments gone? 21 2008, and those distributions had been coming
22 A. To the firm. That was per Fifth 22 for years prior, but during the time -- during
23 Third. The firm was also obligated on the 23 the time -- from the time I started with the
24 Dickens and Crumpet mortgage, and they wanted 24 firm until Fifth Third demanded the change,
25 the Castano proceeds as security against that. 25 this -- the process was always that the money

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1 was distributed into the IOLTA account and then 1 Kumler to either Waite Schneider or Stan?
2 distributed out to the Johnson account. 2 A. Outstanding at this point?
3 Q. All right. What is your estimate 3 Q. What was the total, and then we'll
4 of the amount of money that either Stan or 4 get to what's outstanding.
5 Waite Schneider, however you want to describe 5 A. I -- the only loans I recall are
6 it, is going to receive in the future from the 6 the -- I believe it was like 1.3, the prior
7 Castano Trust? 7 check we discussed.
8 A. I believe there -- I believe there 8 Q. Yeah, but he paid 1.3?
9 are about eight years left. So eight times 9 A. Yeah. And this $100,000. I don't
10 2.5, 2.6 million dollars. 10 recall any others.
11 Q. Give or take 20 million plus? 11 Q. Okay. So that check we saw was in
12 A. That's fair. 12 2014, when Stan had authority to sign checks?
13 Q. All right. Has the Castano Trust 13 A. Yes.
14 money been pledged as collateral for anything? 14 Q. So we know after October 2014
15 A. Not that I can think of. 15 essentially the debt to Cory Kumler had been
16 MR. RAFFERTY: Currently? Are you 16 extinguished?
17 asking currently. 17 A. Yes.
18 Q. Yeah. Since the Fifth Third debt 18 Q. Okay. We've been through the
19 was extinguished. 19 Davis litigation. The Fannie Mae income, it
20 A. No. 20 looks like in October of 2014 there's a deposit
21 Q. So from 2014 through the present? 21 for actually $8.7 million. Could you tell me,
22 A. No. Well, it was -- I don't know 22 because it has to do with Markovits, Stock and
23 if I'd call it a pledge, but until the Dickens 23 DeMarco, what's the deal there?
24 and Crumpet mortgage was satisfied, it was -- 24 A. That was -- as I recall, that was
25 where it was going was being directed by Fifth 25 the balance due on the Fifth Third loan, and I

Page 86 Page 88

1 Third. 1 had to account for the Fannie Mae proceeds.

2 Q. Was the Dickens and Crumpet sale 2 That money actually went from Markovits, Stock
3 to anybody related to Waite Schneider or Stan? 3 and DeMarco directly to Fifth Third. So that
4 A. I don't believe so. It was done 4 $8.7 million, as I recall, I journal-entried in
5 through a broker. 5 as fee income or cost reimbursement and then
6 Q. Okay. So the other -- and I guess 6 also recorded the coinciding paydown on the
7 as we would look going forward, so for eight 7 books of the firm.
8 years we're going to see on a quarterly basis 8 Q. So, when the Fannie Mae income
9 630 some thousand dollars? 9 came in October 2014, the Fifth Third debt,
10 A. 640 some odd thousand. 10 that's what was using --
11 Q. Okay. The next item here on this 11 A. Yes. So there wasn't -- as I
12 time period from August 14, 2016, is Cory 12 recall, that cash never even went into the
13 Kumler, a hundred thousand that came in on 13 firm's checking account.
14 12/29/15? 14 Q. It went from Markovits --
15 A. Yes. 15 A. Yes.
16 Q. And so that's money -- it's 16 Q. All right. What was the
17 captured as income, but maybe -- I don't know 17 arrangement between Markovits and Waite
18 if it is or not. 18 Schneider in terms of how the fees for Fannie
19 A. No, that's not income. It was a 19 Mae were going to be split?
20 loan to the firm from Cory Kumler. Cash was 20 A. I don't know that there was an
21 running very, very tight. That was during the 21 arrangement. As I recall, Rick Wayne operated
22 time that the Castano distributions were being 22 on the firm's behalf to negotiate WSBC's share
23 held up. 23 of the Fannie Mae proceeds.
24 Q. And in regards to Cory Kumler, 24 Q. So Rick Wayne represented Waite
25 what's the sum total of the loans from Cory 25 Schneider?

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1 A. As I recall, that's how it worked, 1 Stan?

2 yes. 2 A. And I believe occasionally
3 Q. Okay. Do you know if there is an 3 Melissa.
4 entitlement to additional money from Fannie 4 Q. And occasionally Melissa?
5 Mae? 5 A. Yeah.
6 A. As far as I know, everything has 6 Q. And obviously Stan would, at least
7 been distributed. 7 from the records you have, there's no
8 Q. Has there been any distribution 8 separation between business purpose or personal
9 since October 14th through today? 9 use?
10 A. No. 10 A. No.
11 Q. So this payment was last of the 11 Q. All right. So then did you see
12 Fannie Mae? 12 all of these expenses made for insurance?
13 A. Yes. 13 A. Mm-hmm.
14 Q. Okay. It's got a series of 14 Q. Travelers is the professional
15 income. Turn, if you would, to page three. 15 liability?
16 This is the Dickens and Crumpet? 16 A. Yes. It's -- it's -- well, no.
17 A. Yes. 17 Travelers is, I believe, the firm's, like,
18 Q. To start with, is the McAlpin on 18 property and casualty.
19 Fourth the same thing as condo owned by Dickens 19 Q. Oh. The P and C?
20 and Crumpet? 20 A. I believe so, yes. I'd have to go
21 A. No. What McAlpin on Fourth -- 21 back and look, but I believe so.
22 those were like HOA fees. 22 Q. Okay. Protective life insurance?
23 Q. Okay. For the Dickens and Crumpet 23 A. I believe that was one of the life
24 condo? 24 insurance policies on Stan, and I would imagine
25 A. Yes. Yes. 25 I'd have to go back and check the records, but

Page 90 Page 92

1 Q. Okay. So all of these, I guess, 1 I imagine that would have been charged as a
2 expenses were for the benefit of the condo 2 draw or a distribution.
3 owned by Dickens and Crumpet? 3 Q. So, if I were to total draws to
4 A. Yes. 4 Mr. Chesley, either directly or for his
5 Q. Then we've got the payments to 5 benefit, would you agree with me that I would
6 Stan, page five. 6 at least look at payments made directly to him,
7 A. Okay. 7 I would look at American Express charges used
8 Q. Those are the Shell credit card? 8 for his personal use, I would look at the Shell
9 A. Yes. 9 credit card for his personal consumption of
10 Q. Is that for his personal use? 10 fuel, and I would look at life insurance
11 A. It's -- I'm sure that there are 11 payments for his life insurance?
12 some for his personal use, and then I believe 12 A. Are you saying disbursements on
13 that Matt has a Shell credit card, too. 13 his behalf? Is that what you're --
14 Q. Do you? 14 Q. Yeah.
15 A. No. 15 A. Yes, that would include all of
16 Q. Does Tom Rehme? 16 those.
17 A. No. 17 Q. Okay. As you look at this list on
18 Q. Does Melissa? 18 insurance, is there any other -- we talked
19 A. No. Well, I take that back. I 19 about CIC, and I guess let me break CIC down.
20 believe that she does. She lives in Columbus, 20 What all did Waite Schneider pay for through
21 and the firm does pay for her gas when she 21 CIC?
22 comes down here. 22 A. As I was describing to you before,
23 Q. Okay. So, of the users of the 23 I'd have to look at each one of these. There
24 credit card to buy gas, it would either be 24 may be an auto insurance payment in here, but
25 Matt, who works maintaining the vehicles, or 25 as I say, without actually researching it, I

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1 couldn't tell you. 1 agreement?

2 Q. Okay. And in the next page, legal 2 A. Yes.
3 filing fees, I assume that relates to 3 Q. And Waite Schneider paid for the
4 Mr. Rehme? 4 legal services by Marion Little to prepare the
5 A. I don't -- I'm sorry. What page 5 windup agreement. Correct?
6 are we on? 6 A. Yes.
7 Q. I went to the next page. 7 Q. All right. And we know Marion
8 A. You're on page six? 8 Little represented Waite Schneider in the Davis
9 Q. Yeah. It's the -- 9 case?
10 A. I would imagine so, yeah. 10 A. Yes.
11 Q. You've already told me about 11 Q. What else has Marion Little done
12 office supplies. Parking expenses on page 12 for Waite Schneider or Stan?
13 seven? 13 A. I don't recall specifically.
14 A. Yes. 14 Certainly those are the two largest things.
15 Q. Does the firm -- 15 Q. And the reason it sticks out is
16 A. The firm pays for parking for 16 the windup agreement is in April of '13, the
17 Melissa, Tom, myself and Stan. 17 Davis settlement is in September of '15, and
18 Q. Okay. So, again, if we were 18 he's on a contingency for that. So I'm trying
19 trying to capture payments made to him or for 19 to figure out how it is you pay 264,000.
20 his benefit, his share of the parking would be 20 A. I'd have to look at the bill. I
21 included? 21 don't remember.
22 A. Yes. 22 Q. Okay. That's fair. Kegler Brown,
23 Q. Okay. Then we get to payments to 23 did they represent Stan in the Davis case?
24 attorneys. That's on page eight. 24 A. I'm sorry. I don't remember.
25 A. Yes. 25 Q. Okay. We've been through Frost

Page 94 Page 96

1 Q. Okay. Strauss Troy, which I might 1 Brown and who they represent. How about O --
2 now connect the dots, because you told me Rick 2 A. O'Riordan.
3 Wayne represented you folks. Do you know what 3 Q. -- O'Riordan Bethel?
4 all Strauss Troy did -- or let me back up. Who 4 A. They were involved in the
5 all did Strauss Troy do work for besides Waite 5 settlement of the Fannie Mae case.
6 Schneider? 6 Q. We know Benton. Benton is the one
7 MR. RAFFERTY: You mean in connection 7 we've talked about. Rippe and Kingston?
8 with? 8 A. That's not an attorney. We pay
9 THE WITNESS: I don't understand. 9 them for the firm's accounting and
10 Q. During this time period, October 10 recordkeeping package. We use Rippe and
11 of 2014, Waite Schneider paid $750,000 to 11 Kingston's cloud package to do that.
12 Strauss Troy? 12 Q. Okay. Speaking of accounts at the
13 A. It's my understanding that that 13 top, all of these payments to Clark Schaefer --
14 was his fee for handling Waite Schneider's 14 A. Yes.
15 interests in the Fannie Mae litigation. 15 Q. -- is that to do tax work?
16 Q. Okay. 16 A. Their bills are for services
17 A. And as far as I know, that was one 17 rendered. So it's tax and accounting and
18 hundred percent what it was for. 18 consulting.
19 Q. All right. Okay. Then the next 19 Q. And does that include tax,
20 is Marion Little. That's his firm? 20 accounting and consulting for Stan personally?
21 A. Yes. 21 A. Yes. There would be some in
22 Q. I understand from, I think, some 22 there, yes.
23 filing here, that Marion Little represented 23 Q. They prepare his personal return?
24 Stan in the windup agreement. Let me back up. 24 A. Yes.
25 I understand Marion Little prepared the windup 25 Q. Okay. So it's either Stan or

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1 Waite Schneider? 1 here, on January 2nd, 2015, Paycor is running

2 A. Yes. 2 the payroll 25,000 a month. Who would that
3 Q. How about any of these entities 3 capture, you, Tom Rehme and Melissa?
4 we've talked about, did Clark Schaefer do the 4 A. Tom does not receive a salary.
5 tax accounting or consulting for entities like 5 It's myself, Melissa and Matt Lad.
6 Milford One, Dickens and Crumpet, Negra 6 Q. Okay. How much does Matt Lad get
7 Enterprises? 7 paid per year?
8 A. It would vary by entity. I can't 8 A. Somewhere in the neighborhood of
9 speak to Cory Kumler. I don't know. But 9 $50,000.
10 Dickens and Crumpet was a wholly-owned or -- a 10 Q. Melissa, as I understand, she's
11 wholly-owned LLC of Stan. So it would have 11 part-time?
12 come under his 1040. 12 A. Well, technically she's full-time.
13 Q. Okay. Any other entities that 13 She works from home, but technically she's
14 Clark Schaefer provided services for? 14 full-time.
15 A. Related to Stan? 15 Q. Okay. And I assume these payments
16 Q. Or the firm. 16 to you or Melissa would be reimbursement for
17 A. They did his gift tax return in 17 something you've done?
18 years gone by. They handled Stan's gift tax 18 A. The small checks?
19 return in years gone by. I can't think of any 19 Q. Yeah.
20 others off the top of my head. 20 A. Yeah. Yeah, like travel expenses,
21 Q. Okay. All right. A few more on 21 if I have to go to the bank or something like
22 the firms. Vorys Sater, do you know what they 22 that.
23 did? Do you know who they did work for? 23 Q. All right. The current rent is
24 A. Yes. I believe that was a 24 approximately $4300 a month?
25 reimbursement to Fifth Third's attorney. Vorys 25 A. Yes.

Page 98 Page 100

1 did work for Fifth Third in the handling of the 1 Q. When does the lease end?
2 settlement, the operating loan. 2 A. Next Monday. I think it's --
3 Q. Right. Okay. We know who Cohen 3 what's May 31st? I shouldn't guess like that.
4 Todd is. Graham Brown? 4 Q. That's next Tuesday.
5 A. I'm sorry. I don't remember. 5 A. Tuesday. I apologize.
6 Q. Cors and Bassett? 6 Q. Okay. Has it been renewed?
7 A. I don't remember. 7 A. Not at this point.
8 Q. Number 1506, 11/18/15, loss of 8 Q. Is there an intention to renew it?
9 Brian somebody. 9 A. I don't know what is going to
10 A. I need more detail. 10 happen.
11 Q. Okay. That's all right. 11 Q. So you don't know if it's going to
12 A. I'm sorry. 12 be renewed, go month to month or you're moving
13 Q. That's all right. Serena Law? 13 out this weekend?
14 A. He's a tax accountant. 14 A. At this point I don't know.
15 MR. RAFFERTY: Lawyer. 15 Q. Okay. Who is dealing with that
16 THE WITNESS: I'm sorry. Tax lawyer, 16 issue? It's not you?
17 tax attorney. 17 A. Honestly, it hasn't been addressed
18 Q. And he did work for the firm or 18 at this point. I would imagine we'll go month
19 Stan or both? 19 to month. I haven't heard from the building.
20 A. Both. He's dealing with the 20 Q. Then if you get to have these
21 audit. 21 checks to the treasury?
22 Q. From the IRS? 22 A. I'm sorry. What page?
23 A. Yes. 23 Q. I'm sorry. Page 11 at the bottom,
24 Q. Okay. All right. Let's ask a few 24 taxes. Those are for the firm or the -- or
25 questions on the payroll. Just using a random 25 Stan?

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1 A. Those are -- I don't recall what 1 it was just speculation.

2 the $500 to the treasury was, but if it was 2 Q. Okay. How about the Hanford?
3 written from the firm's accounts, I would 3 A. I'm not aware of the amount. I've
4 imagine it was for the firm. 4 heard speculation, but I don't know how much it
5 Q. You can assume all of these are 5 would be.
6 written from the firm's account. Sorry if I 6 Q. Okay. Waite Schneider has
7 asked this earlier. Is the firm indebted to 7 identified as exhibits in this case things like
8 Susan Dlott at all today? 8 this.
9 A. No. No. Not that I recall. Not 9 A. Yes.
10 that I can think of. 10 Q. And I'll make an extra copy to
11 Q. Okay. Are you involved at all in 11 mark as an exhibit.
12 the negotiations with the IRS concerning the 12 MR. RAFFERTY: I have copies of all
13 tax lien? 13 of them.
14 A. No. 14 MR. SULLIVAN: Yeah. I marked it as
15 Q. Okay. So you wouldn't know 15 one to Louise, but then I ran out of copies.
16 anything about where that stands or -- 16 So --
17 A. No. I couldn't help you. 17 MR. RAFFERTY: Here. Just a second.
18 Q. Okay. Let me travel down a path I 18 MR. SULLIVAN: Thanks, Don.
19 plodded once already with another witness this 19 THE WITNESS: You can proceed. I
20 morning. Do you have any knowledge, Steve, of 20 know what they are.
21 the fee arrangements or the agreements that are 21 MR. SULLIVAN: I don't want to deny
22 placed for cases that were at Waite Schneider 22 him a chance to object or do something. So --
23 before Stan retired from the practice of law 23 THE WITNESS: Oh.
24 and left to go with other lawyers for their 24 MR. RAFFERTY: What year?
25 handling and disposition? 25 MR. SULLIVAN: The two that I've been

Page 102 Page 104

1 A. Very, very limited knowledge. 1 using, one as of December 31, 2010 and as of
2 Q. Okay. Let me test it just a 2 December 31, 2011.
3 little bit. 3 (Thereupon, Deposition Exhibit No.
4 A. Okay. 4 13, Waite, Schneider, Bayless & Chesley WIP Report
5 Q. So one of which we discussed this 5 as of 12/31/10, was marked for purposes of
6 morning was the Rocky Flats. 6 identification.)
7 A. I have no knowledge of that 7 MR. SULLIVAN: All right. I marked
8 arrangement. 8 as 13 the 2010.
9 Q. Okay. Speaking of Rocky Flats, 9 MR. RAFFERTY: Do you want 2011?
10 has the firm received any money from that, do 10 MR. SULLIVAN: Yeah. You can set
11 you know? 11 that here.
12 A. Not since I've been with the firm. 12 Q. Okay. Steve, Exhibit 13 is the
13 Q. Okay. Are you aware that that is 13 document Waite Schneider WIP report as of
14 identified by the Court in Kentucky as monies 14 December 31, 2010. From our colloquy a minute
15 that should be paid over to the plaintiffs? 15 ago, it sounds like you're familiar with what
16 A. I believe I saw that in -- when I 16 this is?
17 read the -- one of the two -- 17 A. Yes.
18 Q. Orders? 18 Q. What does this intend to tell the
19 A. Yes. 19 reader?
20 Q. Okay. Are you aware of the 20 A. This concept was developed before
21 amount -- 21 I arrived, but when the operating loan was
22 A. No. 22 established, and I think it was in early '08,
23 Q. -- of what the fee would be that 23 as you know, Waite Schneider is a, or was a
24 would -- 24 contingency law firm, and Fifth Third Bank was
25 A. No. I've heard speculation, but 25 looking to understand what Waite Schneider's

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1 potential cash flows were. And so this was put 1 that was submitted to Judge Sargus in the Duke
2 together -- actually, a former assistant of 2 Energy case?
3 mine who was very good with IT was able to go 3 A. As I recall, I printed the BIN
4 in and pull the records and put this together 4 report, which retrieves the costs and the time
5 as a kind of conservative estimate of potential 5 that the firm had on the case.
6 cash flows, potential future cash flows to give 6 Q. And that's from the records
7 the bank some degree of assurance that there 7 available still today at Waite Schneider?
8 was substantial potential money in the 8 A. Yeah. It's from the Rippe and
9 pipeline. 9 Kingston cloud that I described before.
10 Q. Using the first one as an example, 10 Q. All right. Did you -- other than
11 Ross Burton -- 11 pull the information, did you review it in any
12 A. Yes. 12 substantive way?
13 Q. -- is it intended to tell the 13 A. Not really.
14 reader that for calendar year 2010 there's -- 14 Q. Who did you give it to to review
15 A. That's not fair. That's 15 it so that it could be submitted to the Court?
16 cumulative. 16 A. Melissa and Tom.
17 Q. That was going to be my question. 17 Q. Do you know that Tom signed an
18 Is it cumulative? 18 affidavit in support of the fee application in
19 A. It's cumulative. 19 the Duke Energy case?
20 Q. So, from whenever the Ross Burton 20 A. I don't know that I know that for
21 case began, at least as of December 31, there 21 a fact, but if you say he did.
22 had been 4,342 in costs and 431 in hours? 22 Q. I'll represent to you that he did.
23 A. Yes. 23 I just want to know if you were aware of that?
24 Q. And then somebody decided $150 an 24 A. It would seem logical that he did,
25 hour would be sort of a conservative guess as 25 because he's the only attorney.

Page 106 Page 108

1 to what that generates in terms of a fee? 1 Q. Are you aware of the fee agreement
2 A. I remember discussions about it 2 that Waite Schneider has suggested is in
3 being important that the hourly rate be 3 existence relative to the Duke Energy?
4 conservatively estimated. 4 A. Yes, I'm aware there's a fee
5 Q. Are you aware of the fee 5 agreement.
6 applications made by Waite Schneider to courts 6 Q. Between some of the lawyers?
7 around the country since you've been there 7 A. Yes.
8 since 2008? 8 Q. Does Waite Schneider have other
9 A. Yes. 9 fee agreements with other law firms which
10 Q. And you're aware, aren't you, 10 you're aware for other cases?
11 Steve, that the hourly rate associated with the 11 A. Off the top of my head, Duke is
12 timekeepers at Waite Schneider, give or take, 12 the only one that's existing or of substance.
13 is around $600 an hour? 13 Q. And you, I assume, would expect at
14 A. That varied according to attorney. 14 some point in the future, if there is a fee
15 Some attorneys were at that level, yes. 15 application made for some cases originating
16 Q. You have seen, have you not, that 16 with Waite Schneider and ended up somewhere
17 even for associates -- strike that -- employees 17 else, you would be asked to provide the
18 like, say, Terry Coates, who was relatively new 18 accounting data?
19 to the firm, that as part of a fee application 19 A. Yes.
20 Waite Schneider would attach $600 to each hour 20 Q. So somebody could review it for a
21 he worked? 21 fee application?
22 A. Depending on the case, they may 22 A. Yes.
23 have. 23 Q. Okay. You have these for every
24 Q. All right. Incidentally, were you 24 year?
25 involved in putting together the information 25 A. No. No. Well, define every year.

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1 Q. Okay. I'm sorry. It ends -- 2011 1 seen the premise of your question.
2 is the last one that was produced. So was a 2 MR. SULLIVAN: Well, you have to
3 similar report produced? 3 accept the premise. So --
4 MR. RAFFERTY: No. That's not -- 4 THE WITNESS: Are you saying that --
5 there was one in 2012, as well. 5 are you saying that --
6 Q. I apologize, then, if there was 6 Q. Here's what I'm saying.
7 one in 2012. 7 A. I don't understand what you're
8 A. As I recall, when I gave those to 8 asking me.
9 Don, I gave them up through the very end of 9 Q. I see in 2014 there's a payment
10 when they were no longer being produced. 10 Fannie Mae. We saw 8.7 million. So we know
11 Q. If I wanted to find what are the 11 money comes in. There's another payment. The
12 cases in which Waite Schneider can expect some 12 two of those, 8.7 plus the other combined, is
13 fee sometime in the future, we know Castano 13 roughly $17 million?
14 because we've already talked about that, where 14 A. Yes.
15 would I look and how would I put my arms around 15 Q. I know from the fee agreement
16 this is the list of cases? 16 application that Waite Schneider was going to
17 A. I don't -- I don't have knowledge, 17 get $25 million.
18 because all of the cases were, for lack of a 18 MR. RAFFERTY: That Waite Schneider
19 better word, farmed out, and I don't have 19 what?
20 knowledge of what cases still have any income 20 MR. SULLIVAN: Was going to get 25
21 potential, other than the handful that you've 21 million.
22 mentioned. 22 MR. RAFFERTY: Asked for?
23 Q. Would anybody else at Waite 23 MR. SULLIVAN: I think it was
24 Schneider know that? 24 actually agreed.
25 A. Stan has the most familiarity with 25 THE WITNESS: No, I don't believe

Page 110 Page 112

1 the cases because -- from his days of being 1 that that was true.
2 president of the firm. 2 MR. RAFFERTY: The premise of your
3 Q. Okay. While we're on fees that 3 question is incorrect.
4 came in, on the Fannie Mae case are you aware 4 MR. SULLIVAN: It may be.
5 from the records that Waite Schneider made part 5 THE WITNESS: I don't remember that
6 of its request for the approval that there 6 number, but I do know that the only funds that the
7 would be approximately $25 million to Waite 7 firm received from Fannie Mae were the approximate
8 Schneider for Fannie Mae, 14 million in fees 8 $17 million.
9 and 11 in expenses? 9 Q. Okay. And you believe that that
10 A. I'm not aware -- I wasn't involved 10 would extinguish the obligation? The 17
11 in the negotiations. So I -- no, I don't know. 11 million is what Waite Schneider expected to get
12 I don't know that to be true, or I don't recall 12 in total?
13 that happening. 13 A. Yes.
14 Q. Here's my question, Steve. If 14 Q. Okay.
15 I -- based on what I believe I've seen from the 15 A. And they've not received any
16 records, if Waite Schneider claimed its share 16 since, and I have no knowledge of any more
17 of Fannie Mae was 25 million, 14 in fees, 11 in 17 coming.
18 expenses, and I've looked at all of the other 18 Q. Okay.
19 records of Waite Schneider and I can find, give 19 MR. SULLIVAN: If you guys want to
20 or take, 17 million accounted for, I'm trying 20 take a break at any time for like 20 or
21 to find the missing eight-and-a-half million. 21 30 minutes, otherwise I'm going to keep going.
22 Do you have any idea where I might look to see 22 MR. RAFFERTY: Go ahead. Keep
23 any other revenue or monies that came in 23 rolling.
24 relative to Fannie Mae? 24 Q. I'm going to get to the tax
25 MR. RAFFERTY: I object. I've never 25 returns in a minute, but -- so you don't think

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1 I'm hiding anything. Are you aware that in 1 shareholder?

2 2013 and 2014 the tax returns for Waite 2 A. No.
3 Schneider had attached to them a K-1 for Stan? 3 Q. Okay. You're aware, are you not,
4 A. Yes. 4 Steve, that there have been other corporate
5 Q. And then on those K-1s it 5 documents after the windup agreement where Stan
6 identified Stan as 100 percent shareholder of 6 has signed them on behalf of Waite Schneider?
7 Waite Schneider? 7 A. Yes.
8 A. Yes. 8 Q. Mr. Rehme described those as
9 Q. Are you aware that Mr. Rehme told 9 mistakes, as well. Would that be your --
10 me that was a mistake when I asked him? 10 A. That's -- yes.
11 A. My understanding of what's going 11 Q. Would you agree that, even as
12 on there is that Tom is the owner of the shares 12 described as a mistake, that there was no
13 and that Stan is a, I believe the term is a 13 remedy put in place to rectify the mistake to
14 contingent beneficiary, basically, that 14 say either he didn't have authority or some
15 economics and tax consequences still revert to 15 other corporate action to change what he had
16 Stan, the firm, but Tom owns the shares. 16 signed on behalf of the corporation?
17 That's my understanding of legally what's going 17 A. Other than, when the mistake was
18 on. 18 discovered, it -- to my knowledge, it stopped.
19 Q. And I appreciate that. My 19 Q. And the mistake we're talking
20 question, first, was to establish if you knew 20 about, would you agree with me, is for calendar
21 that Tom Rehme described that to me as a 21 year -- most of these occurred in calendar year
22 mistake. I don't know if you know that or not. 22 2014, where he's signing checks on behalf of
23 A. I think I remember that from his 23 Waite Schneider North Side account, he's
24 deposition. 24 executing corporate documents on behalf of the
25 Q. Okay. And now my question is to 25 entity, he's filing tax returns, Waite

Page 114 Page 116

1 you is that a mistake where in 2014, now a 1 Schneider filed a tax return where he's
2 year, nine months after the windup agreement, 2 identified as 100 percent shareholder?
3 the Waite Schneider tax return identifies him 3 MR. RAFFERTY: Hold on. He didn't
4 as 100 percent shareholder? 4 say that was a mistake. He said he believes the
5 A. For tax purposes, his 5 economic interest holder is identified.
6 contingent -- his status as a contingent 6 MR. SULLIVAN: That's fair.
7 beneficiary, I would imagine that the software, 7 Q. I guess, other than -- let me back
8 the accounting firm doesn't have a way to 8 up. Other than describing his mistake and say
9 describe that in any different way. 9 it stopped, anything else that happened to
10 Q. Is it fair to say, Steve, you've 10 ensure that Stan wasn't out doing things which
11 never had a discussion with the accounting firm 11 Waite Schneider says he didn't have authority
12 as to whether he should be identified as 100 12 to do?
13 percent shareholder or whether the accounting 13 A. I don't understand what you're
14 software is capable of that? 14 asking me, or maybe you can be more specific.
15 A. No, I never have. 15 Q. Yeah. In 2014 Stan did things, of
16 Q. You have reviewed the income tax 16 which I understand from you and Mr. Rehme, he
17 returns filed on behalf of Waite Schneider, I 17 didn't have authority to do --
18 assume? 18 A. Okay.
19 A. Yes. To the limit of my tax 19 Q. -- described as a mistake.
20 knowledge, yes. 20 A. Okay.
21 Q. All right. And you have done 21 Q. Other than saying essentially
22 nothing, you meaning Waite Schneider, has done 22 stop, what else has been put in place to make
23 nothing since the filing of that return to 23 sure --
24 qualify, describe differently anything that K-1 24 A. Nothing that I can think of.
25 that identifies Stan as 100 percent 25 Q. Okay. Do you get the financial

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1 statements prepared by Clark Schaefer -- 1 Q. So this essentially was a document

2 A. Yes. 2 for that purpose?
3 Q. -- for Waite Schneider? 3 A. That was the primary purpose, yes.
4 A. Yes. 4 Q. Okay. All right. I'm going to
5 Q. And there's a similar one prepared 5 show you a check.
6 by Clark Schaefer for Stan Chesley? 6 (Thereupon, Deposition Exhibit No.
7 A. Yes. 7 15, Statement of Financial Condition dated
8 Q. All right. I take it you've seen 8 12/31/11, was marked for purposes of
9 in the various statements that there's like a 9 identification.)
10 qualifier from Clark Schaefer about the 10 Q. Steve, Exhibit 15 is the review of
11 information made available to it? 11 financial conditions for Stan Chesley at end of
12 A. Could you read it to me? 12 year 2011. Correct?
13 Q. I'm going to. 13 A. Yes.
14 A. Show it to me. 14 Q. Okay. What I was referring to
15 Q. Well, I'm going to show you 14. 15 when I asked this question earlier was the last
16 (Thereupon, Deposition Exhibit No. 16 paragraph on this report on page two, where it
17 14, Financial Statement as of 12/31/12, was marked 17 says, Stanley M. Chesley has elected to admit
18 for purposes of identification.) 18 to substantially all of the disclosures
19 MR. RAFFERTY: '14? You mean 2012? 19 required by accounting principles generally
20 MR. SULLIVAN: It's Exhibit 14. I'm 20 accepted in the United States of America. If
21 sorry. 21 the amended disclosures were included in the
22 MR. RAFFERTY: Oh. Okay. All right. 22 statement of financial condition they might
23 Q. And I will tell you, if it's not 23 influence the user's conclusion about the
24 on this one it's going to be on his personal 24 financial condition of Stanley M. Chesley.
25 return, or personal financial statements, but 25 Accordingly, the financial statement is not

Page 118 Page 120

1 I'll find out. 1 designed for those who are not informed about
2 A. Okay. 2 such matters.
3 Q. But let's just walk through a 3 A. Okay.
4 minute. Clark Schaefer prepares this for Waite 4 Q. So that's the statement I was
5 Schneider? 5 referring to earlier where there's this
6 A. Yes. 6 qualifier --
7 Q. Are you the person who provides 7 A. Okay.
8 the information to make sure Clark Schaefer has 8 Q. -- Stan's not given all of the
9 access to the information? 9 information.
10 A. Myself and my staff do, yeah. 10 A. Okay.
11 Q. Okay. And so in this first 11 Q. Now, in the end of 2011 it looks
12 paragraph -- this is described as a review as 12 like Stan had assets in excess of $83 million?
13 opposed to an audit, and you're obviously aware 13 A. Yes.
14 of the differences? 14 Q. And even without providing all of
15 A. Yes. 15 the information to Clark Schaefer, that's the
16 Q. All right. Do you know if these 16 number that they came up with?
17 reviews, financial reviews were provided to 17 A. Yes.
18 third parties to rely upon for either extending 18 Q. And his net worth was almost
19 credit, making loans or doing something 19 slightly more than $29 million?
20 relative to Waite Schneider? 20 A. Yes.
21 A. The primary reason for the 21 Q. And you reviewed these as they
22 preparation of this was for Fifth Third Bank. 22 were prepared by Clark Schaefer?
23 Q. After the debt got paid off at the 23 A. I saw them, discussed them with
24 Fifth Third Bank in 2014 these continued? 24 Denice, but --
25 A. No. 25 Q. Denice Hertlein is an accountant

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1 at Clark Schaefer. 1 A. No. Please understand I'm

2 A. Yes. She was the partner on the 2 thinking in terms of the firm's balance sheet.
3 account. 3 Okay. The firm's balance sheet would have a
4 (Thereupon, Deposition Exhibit No. 4 note on there, would have debt and -- but, as I
5 16, Statement of Financial Condition dated 5 say, for basis purposes, as I understand it,
6 12/31/12, was marked for purposes of 6 Clark Schaefer and Hackett wanted to reclassify
7 identification.) 7 the debt and the equity as equity, and as I,
8 Q. I'm going to hand you 16. Sixteen 8 say it's my understanding it was for basis
9 is the statement of Stan Chesley just one year 9 purposes.
10 later. Correct? 10 Q. Okay. While we have those two in
11 A. Yes. 11 front of you, keep it in front of you.
12 Q. Again, the same qualifier on this 12 A. Okay.
13 statement, as well? 13 (Thereupon, Deposition Exhibit No.
14 A. Yes. 14 17, Financial Statement as of 12/31/11, was marked
15 Q. And here, according to this 15 for purposes of identification.)
16 report, his assets are worth $19.3 million? 16 Q. Exhibit 14 was the Waite Schneider
17 A. Okay. 17 as of December 2012. I'm going to hand you
18 Q. Would you agree with me? 18 Exhibit 17, which is the Waite Schneider
19 A. That's what the report says, yes. 19 financial statement as of December 31, 2011.
20 Q. And his net worth is $2 million? 20 The same two-year comparison is what we're
21 A. Yes. 21 trying to do here. So, if you're following me,
22 Q. If you can help me, Steve, because 22 Exhibit 17 tells us, would you agree, that the
23 I'm looking for some help, how Stan's assets 23 assets of Waite Schneider at the end of 2011
24 were -- 24 are slightly more than $34 million?
25 A. The -- 25 A. Yes.

Page 122 Page 124

1 Q. Hold on. Let me finish the 1 Q. And the assets of Waite Schneider
2 question. 2 a year later is slightly more than $3 million.
3 A. I'm sorry. 3 That would come from Exhibit 14. So we're
4 Q. -- went from an excess of 83 4 comparing 14 and 17.
5 million in 2011 down to 19.3 in 2012? 5 A. Yes.
6 A. There were issues -- this is all 6 Q. All right. Now I'm trying to
7 dictated by the accounting firm. There were 7 figure out the combined, between Mr. Chesley
8 tax related issues related to basis, and the 8 and his law firm, how at the end of 2011 it had
9 firm's balance sheet had debt and equity, large 9 assets exceeding $110 million and one year
10 debt and equity numbers. And, as I recall, 10 later it had assets substantially less than
11 Clark Schaefer and Hackett said that, 11 that.
12 effectively, these notes were really equity in 12 A. As I say, if you'll look on the,
13 the firm, and so that the debt and the equity 13 on page two of 2011, it advances to
14 in the balance sheet of the firm was rolled 14 stockholder, and then if you look in '12, that
15 into one and creating like a netting effect. 15 is gone. As I say, that was part of the
16 And so they reclassified his notes from notes 16 journal entry netting these advances and notes
17 to equity in the firm. 17 all as equity, and that must have -- I recall
18 Q. So it would be essentially a 18 it being done, and it must have -- clearly it
19 transfer of the assets from Stan to Waite 19 happened in 2012.
20 Schneider? 20 Q. Okay. So, other than the advance
21 A. No. No. It was a 21 to stockholder, 31 million, are you able to
22 reclassification. 22 tell me any other explanation for the drop?
23 Q. As it reclassifies, though, it's 23 MR. RAFFERTY: Well, that's --
24 an asset here. It's reclassified to what, an 24 THE WITNESS: I'd have to look at it.
25 asset or liability? 25 MR. RAFFERTY: The drop in total

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1 assets? 1 four exhibits which are the 2011 and 2012

2 MR. SULLIVAN: Yeah, from the 2 statement of financial conditions prepared by
3 combined. So we're going from more than 110 3 Clark Schaefer for both Mr. Chesley and Waite
4 million for these two combined. 4 Schneider, and I was asking Steve to help me
5 MR. MAUER: No. We're going from 34 5 understand the drop in combined assets from
6 to three. 6 that 2011/2012 period, and we took a break for
7 MR. RAFFERTY: Brian, I'm not 7 him to look at it. So --
8 following you. 8 A. First of all, this is four and
9 THE WITNESS: Where do you get 110 9 five years ago. So I really don't remember the
10 million? 10 details perfectly well, but I would draw your
11 Q. Okay. You take Stan in 2011, he 11 attention to Stan's 2011 statement, page two,
12 has assets of $83 million, and I added 34 12 the assets, and you'll see the closely held
13 million from his law firm. That's how I got 13 business note receivable of $50 million and
14 110. Then a year later Stan and his law firm 14 change. As a part of this netting that I was
15 went from more than 110 million to 22 million. 15 describing, that was netted -- well, and then
16 I'm trying to figure out where the 90 odd 16 if you look correspondingly at page three of
17 million dollars went. 17 Waite Schneider's statement for 2011, you'll
18 A. I think it's important to note -- 18 see an identical number as a liability of the
19 MR. RAFFERTY: Hold on. Are you 19 firm. And then if you look at page two of the
20 expecting him to do like this -- a review? 20 firm's 2011 statement, there's advances to
21 Because if you are, we're going to take a break 21 stockholders of $31 million. Clark, Schaefer
22 and he can look at it. I don't want him narrating 22 and Hackett was classifying, for reasons I
23 his thoughts on the record. I'm not clear what 23 don't recall, distributions as advances to
24 the -- 24 stockholders. See that $31 million asset
25 MR. SULLIVAN: Well, I guess it's a 25 there?

Page 126 Page 128

1 combination. I mean, one, he is the accountant, 1 Q. Yes.

2 so I would expect him to have some knowledge, but 2 A. Okay. And, as I say, I don't
3 I want to give him the fair time; and two, I think 3 recall the reason. Then, if you look at -- as
4 he's been identified by you as a witness who will 4 I say, this netting occurred because Clark
5 testify as to the financial conditions and the 5 Schaefer was saying that effectively it was all
6 need for this cash infusion. 6 equity transactions, as I recall. So, if you
7 MR. RAFFERTY: And so what does that 7 look at December 2012, Stan's page two under
8 have to do with combining a personal financial 8 assets, you'll see the $50 million is no longer
9 statement and a business financial statement and 9 there, okay, a journal entry transaction, if
10 combining them to 110 million and trying to ask 10 you will. And then, if you go to the firm's
11 him what the difference is? 11 2011, page two, you'll see that the $31 million
12 MR. SULLIVAN: If he knows, but I am 12 he advances to shareholders is no longer there.
13 interested in the accountant's explanation, if 13 So, if you add those numbers together, you're
14 any, how the combination of essentially the single 14 in the $80 million ballpark. Okay. But while
15 person law firm and the person went from assets 15 you were out, it looks to me like there's
16 greater than 110 million to about 22 million in a 16 actually an error. I don't know this for sure.
17 single year. So we can take a break. 17 I'd want to check it. But it looks to me like
18 MR. RAFFERTY: We can take a break 18 there is an error in the December 31 Stan's
19 then. 19 financial statement. December -- I'm sorry.
20 MR. SULLIVAN: Okay. Let's take a 20 December 2012. Okay.
21 break and give you few minutes to take a look at 21 Q. Okay.
22 this. 22 A. If you look at -- I'm sorry. Let
23 (Break taken.) 23 me refer you back to page three of the firm's
24 Q. Okay. We're back on the record, 24 2012. You'll see a notes payable shareholder
25 and while we took a break we were looking at 25 of $29 million.

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1 Q. Mm-hmm. 1 shareholder distributions.

2 A. As I -- I'd have to go back and 2 Q. Okay. So his W-2, 1.5 million we
3 review records. I would want to talk to 3 talked about, would be somewhere else?
4 Denice, but it appears to me that that 4 A. It would be separate. It would be
5 $29 million should be listed as an asset there. 5 included in the expenses of the firm for the
6 It's a note. Do you understand what I'm -- 6 year.
7 Q. Where? 7 Q. Okay. So, if I read this right,
8 A. I'm sorry. On Stan's personal. 8 he personally took out about $31 million in
9 But I don't know that for sure without 9 2011?
10 reviewing it. 10 A. No. No, no, no. That would be
11 Q. Okay. So the 29 million note 11 cumulative.
12 payable of Waite Schneider should be a 12 Q. Oh. Not for just 2011?
13 $29 million asset on Stan's? 13 A. That would be a cumulative number
14 A. It appears that way. 14 and I could not tell you for --
15 Q. Okay. 15 Q. From when to when?
16 A. I don't know for sure. Okay. As 16 A. It would be a number of years.
17 I say, it was four years ago and I just don't 17 Q. Oh. Okay. So it started sometime
18 remember it. It appears to be an error. But, 18 before 2011. This is the amount as of
19 as I say, if you refer back to page two of 19 December 31, 2011?
20 2011 -- 20 A. Yes. And without reviewing the
21 Q. Personal or company? 21 records, I couldn't tell you the period.
22 A. I'm sorry. Page three of 2011 for 22 Q. Okay. Steve, as I understand, I
23 the firm, the $50 million number that shows as 23 don't have it right in front of me, you have
24 a note payable stockholder shows up on Stan's 24 been identified as somebody who is going to
25 2011 as a note receivable. 25 testify on Thursday about the liquidity needs

Page 130 Page 132

1 Q. Yes. 1 of Waite Schneider for some period of time. I

2 A. And then in 2012 the $29 million 2 don't have it right in front of me, otherwise
3 note on the firm's does not show up on Stan's 3 I'd read it to you verbatim. I'm just trying
4 personal. And, as I say, I don't have an 4 to figure out what it is you'll tell us on
5 explanation for that without researching it. 5 Thursday if you testify.
6 Q. Okay. Well, I appreciate that 6 A. I didn't know I was going to be
7 explanation. Just a couple of questions on 7 doing that.
8 the -- when you were describing the 8 Q. I'm sorry to break the news to
9 distribution from the 2011 Waite Schneider of 9 you. If you do testify, do you have any idea,
10 $31 million -- 10 as you sit here today, what topics you would be
11 A. I'm sorry. I'm looking at the 11 asked to testify to?
12 wrong one. What page? 12 A. No, I don't.
13 Q. Two. 13 Q. Okay. All right. Let me see if I
14 A. Okay. 14 can get organized and not spend a lot more time
15 Q. $31 million advance to 15 with you. Other than the Schneider, whatever
16 stockholders. 16 the name of that pension company is, is there
17 A. Yes. 17 any other third party that Waite Schneider has
18 Q. And you say that's distributions? 18 used for pension assistance?
19 A. Those were distributions to Stan, 19 A. I believe that there was a law
20 as I recall, that Clark Schaefer Hackett 20 firm at some point that has helped with -- I
21 elected to classify as advances. 21 don't remember if it was calculations. I don't
22 Q. Okay. So those are actual 22 remember. I don't remember.
23 distributions to him as either W-2 employment 23 Q. Okay.
24 or -- 24 A. It's always been primarily Chuck
25 A. No, no, no. They would be 25 Schneider's firm.

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1 Q. Other than Clark Schaefer and 1 Give me just a minute, then. Don, give me just
2 Rippe and Kingston from the platform, I guess, 2 five minutes.
3 is there any other accounting firm that Waite 3 (Break taken.)
4 Schneider has employed since 2008 through the 4 (Please refer to Volume II for the
5 present? 5 continuation of Mr. Horner's deposition.)
6 A. Well, Terry Serena is a tax 6 * * *
7 attorney. I can't think of anybody else. 7
8 Q. All right. Is there any other 8
9 third parties, whether it's accountants, 9
10 consultants, whatever, that Waite Schneider has 10
11 employed to help in the windup of the affairs 11
12 of the business and the accounting or other 12
13 financial functions? 13
14 A. Well, Marion Little. 14
15 Q. Is a lawyer, but -- 15
16 A. There's still a 401K plan that's 16
17 handled by a company by the name of Pen Corp. 17
18 I can't think of anybody else at this point. 18
19 Q. If I were to ask you what is left 19
20 to do from your perspective to wind up the 20
21 affairs of Waite Schneider, would you be able 21
22 to answer that question? 22
23 A. In a general way. There's a 23
24 number of cases, small number of cases 24
25 outstanding, I think you've listed most of 25

Page 134 Page 136

1 them, that the firm is waiting to get the

2 results from. Obviously, when it comes time to
3 close the office the lease will have to be
4 terminated. The 401K plan will have to be
5 closed down. There's some off site storage
6 primarily of case files which will have to be
7 disposed of. I can't remember anything else.
8 Did I mention the 401K plan?
9 Q. You did.
10 A. Yeah.
11 Q. And a similar question, then, I
12 think we've established that, as we sit here
13 today, there are no outstanding liabilities in
14 terms of either debt of the firm, unfunded
15 pension, including 401K, obligations or
16 anything of that nature, is there?
17 A. Well, the 401K plan is ongoing,
18 because Melissa and I still participate.
19 Q. Okay. Other than the
20 administrative expenses --
21 A. Right. Correct.
22 Q. -- there's no other outstanding
23 obligations to satisfy?
24 A. Not that I can think of.
25 MR. SULLIVAN: Okay. All right.

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Page 137
1 STATE OF OHIO )
2 COUNTY OF MONTGOMERY ) SS: CERTIFICATE
3 I, Vicky L. Marcon, a Notary Public
4 within and for the State of Ohio, duly
5 commissioned and qualified,
6 DO HEREBY CERTIFY that the
7 above-named STEVE HORNER, CPA, was by me first
8 duly sworn to testify the truth, the whole truth
9 and nothing but the truth.
10 Said testimony was reduced to writing
11 by me stenographically in the presence of the
12 witness and thereafter reduced to typewriting.
13 I FURTHER CERTIFY that I am not a
14 relative or Attorney of either party, in any
15 manner interested in the event of this action, nor
16 am I, or the court reporting firm with which I am
17 affiliated, under a contract as defined in Civil
18 Rule 28(D).
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Page 138
1 IN WITNESS WHEREOF, I have hereunto set my
2 hand and seal of office at Dayton, Ohio, on this
3 25th day of May, 2016.
4
5
6
7 _________________________________
VICKY L. MARCON, RPR
8 NOTARY PUBLIC, STATE OF OHIO
My commission expires 3-17-2019
9
10
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Page 139
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
* * *
CONNIE MCGIRR, et al.,
Plaintiffs,
vs. CASE NO. 1:16-cv-464
THOMAS F. REHME, et al., VOLUME II
Defendants.
* * *
Deposition of STEVE HORNER, CPA, Witness
herein, called by the Plaintiffs for
cross-examination pursuant to the Rules of Civil
Procedure, taken before me, Mindy R. Huffman, a
Notary Public in and for the State of Ohio, at the
offices of Dinsmore, 255 East Fifth Street, Suite
1900, Cincinnati, Ohio, on Tuesday, May 24, 2016,
at 2:46 p.m.
* * *

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1 EXAMINATIONS CONDUCTED PAGE 1 (Thereupon, Exhibit 514, a copy of

2 BY MR. RAFFERTY:....................... 149 2 the December 31, 2009 and 2008
3 BY MR. SULLIVAN:....................... 194 3 financial statements for Waite,
4 4 Schneider, Bayless & Chesley, LPA,
5 EXHIBITS MARKED 5 was marked for purposes of
6 (Thereupon, Exhibit 538, a copy of a 6 identification.)....................... 157
7 document entitled Plaintiffs' Summary 7 (Thereupon, Exhibit 515, a copy of
8 of Cash Transfers from Chesley's 8 the December 31, 2010 and 2009
9 Personal Johnson Trust Company 9 financial statements for Waite,
10 Accounts and 5/3rd Investment 10 Schneider, Bayless & Chesley, LPA,
11 Accounts and Personal Checking 11 was marked for purposes of
12 Account to Waite, Schneider, 12 identification.)....................... 157
13 Bayless & Chesley Commercial Account, 13 (Thereupon, Exhibit 516, a copy of
14 was marked for purposes of 14 the December 31, 2011, financial
15 identification.)....................... 150 15 statements for Waite, Schneider,
16 (Thereupon, Exhibit 508, a copy of a 16 Bayless & Chesley, LPA, was marked
17 document entitled What Happened to 17 for purposes of identification.)....... 157
18 the $59 million, was marked for 18 (Thereupon, Exhibit 517, a copy of
19 purposes of identification.)........... 154 19 the December 31, 2012, financial
20 (Thereupon, Exhibit 509, a copy of 20 statements for Waite, Schneider,
21 the 2009 federal tax return for 21 Bayless & Chesley, LPA, was marked
22 Waite, Schneider, Bayless & Chesley, 22 for purposes of identification.)....... 157
23 LPA, was marked for purposes of 23
24 identification.)....................... 155 24
25 25

Page 140 Page 142

1 (Thereupon, Exhibit 510, a copy of 1 (Thereupon, Exhibit 519, a copy of a

2 the 2010 federal income tax return 2 Waite, Schneider, Bayless & Chesley
3 for Waite, Schneider, Bayless & 3 document entitled Vendor Inquiry for
4 Chesley, LPA, was marked for purposes 4 the date range of 1/1/2009 to
5 of identification.).................... 155 5 12/31/2009, was marked for purposes
6 (Thereupon, Exhibit 511, a copy of 6 of identification.).................... 168
7 the 2011 federal income tax return 7 (Thereupon, Exhibit 520, a copy of a
8 for Waite, Schneider, Bayless & 8 Waite, Schneider, Bayless & Chesley
9 Chesley, LPA, was marked for purposes 9 document entitled Vendor Inquiry for
10 of identification.).................... 156 10 the date range of 1/1/2010 to
11 (Thereupon, Exhibit 512, a copy of 11 12/31/2010, was marked for purposes
12 the 2012 federal income tax return 12 of identification.).................... 170
13 for Waite, Schneider, Bayless & 13 (Thereupon, Exhibit 521, a copy of a
14 Chesley, LPA, was marked for purposes 14 Waite, Schneider, Bayless & Chesley
15 of identification.).................... 156 15 document entitled Vendor Inquiry for
16 (Thereupon, Exhibit 513, a copy of 16 the date range of 1/1/2011 to
17 the 2013 federal tax return for 17 12/31/2011, was marked for purposes
18 Waite, Schneider, Bayless & Chesley, 18 of identification.).................... 170
19 LPA, was marked for purposes of 19 (Thereupon, Exhibit 522, a copy of a
20 identification.)....................... 156 20 Waite, Schneider, Bayless & Chesley
21 21 document entitled Vendor Inquiry for
22 22 the date range of 1/1/2012 to
23 23 12/31/2012, was marked for purposes
24 24 of identification.).................... 170
25 25

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1 (Thereupon, Exhibit 523, a copy of a 1 (Thereupon, Exhibit 533, a copy of a

2 Waite, Schneider, Bayless & Chesley 2 section of a Waite, Schneider,
3 document entitled Vendor Inquiry for 3 Bayless & Chesley payroll consensus
4 the date range of 1/1/2013 to 4 report for 2011, was marked for
5 12/31/2013, was marked for purposes 5 purposes of identification.)........... 183
6 of identification.).................... 170 6 (Thereupon, Exhibit 534, a copy of a
7 (Thereupon, Exhibit 524, a copy of a 7 section of a Waite, Schneider,
8 spreadsheet which is attempting to 8 Bayless & Chesley payroll consensus
9 track the activity in the four 9 report for 2012, was marked for
10 Johnson investment accounts owned by 10 purposes of identification.)........... 184
11 Stan Chesley, was marked for purposes 11 (Thereupon, Exhibit 535, a copy of a
12 of identification.).................... 171 12 section of a Waite, Schneider,
13 (Thereupon, Exhibit 525, a copy of a 13 Bayless & Chesley payroll consensus
14 document entitled The Recirculating 14 report for 2013, was marked for
15 $22 Million, was marked for purposes 15 purposes of identification.)........... 185
16 of identification.).................... 174 16 (Thereupon, Exhibit 536, a copy of a
17 (Thereupon, Exhibit 527, a copy of a 17 section of a Waite, Schneider,
18 Waite, Schneider, Bayless & Chesley 18 Bayless & Chesley payroll consensus
19 WIP report as of December 31, 2009, 19 report for 2014, was marked for
20 was marked for purposes of 20 purposes of identification.)........... 185
21 identification.)....................... 177 21 (Thereupon, Exhibit 537, a copy of a
22 22 section of a Waite, Schneider,
23 23 Bayless & Chesley payroll consensus
24 24 report for 2015, was marked for
25 25 purposes of identification.)........... 186

Page 144 Page 146

1 (Thereupon, Exhibit 528, a copy of a 1 (Thereupon, Exhibit 543, a copy of a

2 Waite, Schneider, Bayless & Chesley 2 document entitled Accomplishments
3 WIP report as of December 31, 2010, 3 During Wind-Up, was marked for
4 was marked for purposes of 4 purposes of identification.)........... 186
5 identification.)....................... 177 5 (Thereupon, Exhibit 544, a copy of a
6 (Thereupon, Exhibit 529, a copy of a 6 document entitled Remaining Tasks
7 Waite, Schneider, Bayless & Chesley 7 Under Wind-Up, was marked for
8 WIP report as of December 31, 2011, 8 purposes of identification.)........... 191
9 was marked for purposes of 9
10 identification.)....................... 177 10
11 (Thereupon, Exhibit 530, a copy of a 11
12 Waite, Schneider, Bayless & Chesley 12
13 WIP report as of December 31, 2012, 13
14 was marked for purposes of 14
15 identification.)....................... 177 15
16 (Thereupon, Exhibit 531, a copy of a 16
17 section of a Waite, Schneider, 17
18 Bayless & Chesley payroll consensus 18
19 report for 2009, was marked for 19
20 purposes of identification.)........... 182 20
21 (Thereupon, Exhibit 532, a copy of a 21
22 section of a Waite, Schneider, 22
23 Bayless & Chesley payroll consensus 23
24 report for 2010, was marked for 24
25 purposes of identification.)........... 183 25
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1 APPEARANCES: 1 Q. And when the -- from a bookkeeping

2 On behalf of the Plaintiffs: 2 perspective, when the funds were transferred
3 Dinsmore
4 By: Brian S. Sullivan 3 from the IOLTA account to a Stan Chesley
Attorney at Law 4 account, how was that handled by the firms?
5 255 East Fifth Street
Suite 1900 5 A. It was classified as B income to
6 Cincinnati, Ohio 45202 6 the firm and a distribution to Stan.
513-977-8233
7 7 Q. There were also a number of
[email protected]
8 On behalf of the Defendant Waite 8 questions, Steve, about funds that had been
Schneider:
9 transferred by Stan Chesley to the law firm
9
Cohen, Todd, Kite & Stanford, LLC 10 over the course of a number of years. Do you
10 11 remember that?
By: Donald J. Rafferty
11 Attorney at Law 12 A. Say that again. I'm sorry.
250 East Fifth Street 13 Q. About funds being transferred by
12 Suite 2350
Cincinnati, Ohio 45202 14 Stan Chesley from his personal accounts into
13 513-421-4020 15 the firm account.
[email protected]
14 16 A. Okay.
Also present: Angela Ford 17 Q. You're aware of that?
15
18 A. Yes.
* * *
16 19 Q. Okay.
17 20 (Thereupon, Exhibit 538, a copy of a
18
19 21 document entitled Plaintiffs' Summary of Cash
20 22 Transfers from Chesley's Personal Johnson Trust
21
22 23 Company Accounts and 5/3rd Investment Accounts and
23 24 Personal Checking Account to Waite, Schneider,
24
25 25 Bayless & Chesley Commercial Account, was marked

Page 148 Page 150

1 STEVE HORNER, CPA 1 for purposes of identification.)

2 of lawful age, Witness herein, having been 2 BY MR. RAFFERTY:
3 previously duly cautioned and sworn, as 3 Q. I'll show you what's been marked
4 hereinafter certified, was examined and said as 4 as Exhibit 538 (providing). Have you seen
5 follows: 5 Exhibit 538 before?
6 CROSS-EXAMINATION 6 A. Yes.
7 BY MR. RAFFERTY: 7 Q. And what's your understanding of
8 Q. Steve, I wanted to ask you a 8 Exhibit 538?
9 couple of follow-up questions, follow-up 9 A. I believe it's -- they put
10 questions from this morning's examination 10 together the spreadsheet showing money put into
11 conducted by Brian. Initially there were a 11 the firm by Stan over a period of four or five
12 series of questions from Brian concerning the 12 years.
13 payments from the Castano trust that were wired 13 Q. They being the plaintiffs in the
14 to the Waite, Schneider, Bayless & Chesley 14 Kentucky lawsuit?
15 IOLTA account for a number of years. Do you 15 A. Yes. I'm sorry.
16 remember that? 16 Q. And, Steve, if you were asked to
17 A. Yes. 17 respond to the notion that this $59-plus
18 Q. And I think you indicated that the 18 million was placed in the firm for purposes of
19 practice from its inception until 2011 was that 19 rendering Stan insolvent, how would you respond
20 the funds were wired from the Castano trust to 20 to that?
21 the Waite Schneider IOLTA account. Sometime 21 A. It doesn't make any sense to me.
22 thereafter, Stan elected to make a distribution 22 Q. Okay. Are you aware of Stan
23 to himself equal to the amount that had been 23 transferring money to the firm over -- this
24 wired? 24 chart covers from 2009 to 2013.
25 A. Yes. 25 A. Yes.

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1 Q. Okay. Can you describe for me how 1 (Thereupon, Exhibit 508, a copy of a
2 it went about that Stan was called upon or 2 document entitled What Happened to the $59
3 decided to put funds into the firm? 3 million, was marked for purposes of
4 MR. SULLIVAN: Objection. 4 identification.)
5 Foundation. Go ahead. 5 BY MR. RAFFERTY:
6 THE WITNESS: Okay. The firm -- cash 6 Q. I'm going to ask you to look at
7 flow into the firm was sporadic due to the nature 7 the document marked Exhibit 508 (providing).
8 of the cases that the firm worked on, so the firm 8 I'll ask you if you've seen that before.
9 could go for long periods of time without really 9 A. Yes.
10 seeing any appreciable revenue. There were 10 Q. What is it?
11 expenses running the firm, payroll, rent, all the 11 A. It was -- it's -- it's an
12 office costs, all those sorts of things. And 12 examination or an attempt to reconcile what
13 Stan, during this period of time, would also take 13 happened to the $59,000,000 that's been
14 distributions from the firm. So on a regular 14 discussed.
15 basis, the way it would work is if the firm was 15 Q. The $59,000,000 that's summarized
16 running low on cash, I would go to Stan and say 16 in Exhibit 538?
17 we're at this level in cash, and typically -- I 17 A. Yes.
18 would say we need cash to operate the firm. 18 Q. Okay. If you could, just look at
19 Typically what he would do is say -- put together 19 the top line in Exhibit 508. It says profit,
20 a letter for me so I could authorize a transfer 20 paren, loss excluding noncash.
21 from one of the Johnson investment accounts to 21 A. Okay.
22 inject money into the firm to keep the firm 22 Q. Can you tell me what that line
23 operating. 23 represents?
24 BY MR. RAFFERTY: 24 A. Well, that's a listing of profits
25 Q. Did Stan, to your recollection, 25 or -- actually I should say losses for those

Page 152 Page 154

1 ever come to you and say that he wanted to put 1 periods with adjustments for noncash items like
2 money into the firm without you raising the 2 depreciation and that sort of thing.
3 issue of cash flow? 3 Q. Okay. And do you recall what the
4 A. Not that I recall. I would say 4 source documents were for putting together this
5 that perhaps every single time that he put 5 top line in Exhibit 508?
6 money in the firm, it was either myself or 6 A. Either the firm's financial
7 somebody from my staff if I wasn't -- maybe if 7 statements as prepared by Clark Schaefer, and
8 I was out of town, saying, you know, we need 8 it seems to me that there was one from the tax
9 operating cash. That would trigger Stan saying 9 return because -- I believe the last year, that
10 okay, fine, put together a letter authorizing 10 there was a financial statement from WSBC. It
11 the transfer from Johnson. 11 was '12. I think '13 might have been from the
12 Q. From the heading on Exhibit 538, 12 tax return. I don't recall.
13 this appears to show -- to summarize cash 13 MR. RAFFERTY: Brian, you're going to
14 transfers from Stan Chesley's personal Johnson 14 stipulate -- do I need to walk through each of
15 accounts and his Fifth Third investment 15 the (indicating) --
16 accounts and personal checking account to Waite 16 MR. SULLIVAN: No. If he tells us
17 Schneider. Do you see that? 17 these are complete copies, then I'm fine.
18 A. Yes. 18 MR. RAFFERTY: Okay.
19 Q. Now, during the period from 2009 19 (Thereupon, Exhibit 509, a copy of
20 to 2013, did Waite Schneider send back to Stan 20 the 2009 federal tax return for Waite, Schneider,
21 any funds into either one of his Johnson 21 Bayless & Chesley, LPA, was marked for purposes of
22 accounts or one of his Fifth Third accounts? 22 identification.)
23 A. Yes, there were distributions to 23 (Thereupon, Exhibit 510, a copy of
24 Stan. Generally I would say it was into his 24 the 2010 federal income tax return for Waite,
25 personal account at Fifth Third. 25 Schneider, Bayless & Chesley, LPA, was marked for

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1 purposes of identification.) 1 been marked as Exhibit 514, 515, 516 and 517
2 (Thereupon, Exhibit 511, a copy of 2 and ask you what those documents are
3 the 2011 federal income tax return for Waite, 3 (providing).
4 Schneider, Bayless & Chesley, LPA, was marked for 4 A. Those are the reviewed financial
5 purposes of identification.) 5 statements from -- prepared by Clark, Schaefer
6 (Thereupon, Exhibit 512, a copy of 6 and Hackett.
7 the 2012 federal income tax return for Waite, 7 Q. Okay. And it looks like they
8 Schneider, Bayless & Chesley, LPA, was marked for 8 start the 2009 and '08 report and end in 2012,
9 purposes of identification.) 9 the financial statements?
10 (Thereupon, Exhibit 513, a copy of 10 A. Yes.
11 the 2013 federal tax return for Waite, Schneider, 11 Q. And that is consistent with your
12 Bayless & Chesley, LPA, was marked for purposes of 12 recollection, is it, that in 2014, the source
13 identification.) 13 data for the chart Exhibit 508 was the tax
14 BY MR. RAFFERTY: 14 return?
15 Q. I'm going to show you what's been 15 A. Yes.
16 marked as 509, 510, 511, 512 and 513 16 Q. Okay. If we could look at
17 (providing). 17 Exhibit 514, please, and turning, in
18 A. Okay. 18 particular, to page 4, can you -- can you show
19 Q. I'll ask you, are those copies of 19 me on page 4 where the data was drawn to fold
20 the 2009 through 2013 tax returns for Waite, 20 into Exhibit 508?
21 Schneider, Bayless & Chesley? 21 A. It -- there's a net income loss
22 A. Yes, they appear to be. 22 item of $6.5 million, and then there would be,
23 MR. SULLIVAN: They are complete 23 I believe, a depreciation add-back from -- if
24 copies? 24 we go back into the body of the --
25 THE WITNESS: To the best of my 25 Q. Is that page 10?

Page 156 Page 158

1 knowledge. 1 A. Page 10, yes. There's a line item

2 MR. SULLIVAN: Okay. You're just 2 about maybe a third of the way down for 2009
3 entering the copies? 3 where there's $88,000 in depreciation, which is
4 MR. RAFFERTY: That's what I'm going 4 a noncash item.
5 to do. 5 Q. And so in round numbers, for 2009,
6 (Thereupon, Exhibit 514, a copy of 6 Exhibit 508 shows that there was a cash loss of
7 the December 31, 2009 and 2008 financial 7 approximately $6.4 million?
8 statements for Waite, Schneider, Bayless & 8 A. That's what that spreadsheet
9 Chesley, LPA, was marked for purposes of 9 shows, yes.
10 identification.) 10 Q. Okay. And in 2010, looking at
11 (Thereupon, Exhibit 515, a copy of 11 Exhibit 515, can you point to the same sorts of
12 the December 31, 2010 and 2009 financial 12 data points that were used?
13 statements for Waite, Schneider, Bayless & 13 A. On page 4, there's a net loss
14 Chesley, LPA, was marked for purposes of 14 number of $7.7 million. Then on page 10,
15 identification.) 15 there's an $81,000 noncash item add-back.
16 (Thereupon, Exhibit 516, a copy of 16 Q. For depreciation?
17 the December 31, 2011, financial statements for 17 A. For depreciation, yes. I'm sorry.
18 Waite, Schneider, Bayless & Chesley, LPA, was 18 Q. And amortization?
19 marked for purposes of identification.) 19 A. Yes.
20 (Thereupon, Exhibit 517, a copy of 20 Q. And for 2011, if you look at
21 the December 31, 2012, financial statements for 21 Exhibit 516, --
22 Waite, Schneider, Bayless & Chesley, LPA, was 22 A. On page 4, close to the bottom,
23 marked for purposes of identification.) 23 there's a line item that says net loss of
24 BY MR. RAFFERTY: 24 $15,400,000 and change. Then there are
25 Q. I'm also going to show you what's 25 actually two line items that impacted that.

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1 That was the year that the cars were sold to 1 A. It's -- it's a reasonably accurate
2 Susan Dlott, and they had been carried on the 2 approximation of the cash that the firm lost,
3 books in a number of -- somewhere in the 3 spent net for that five-year period.
4 neighborhood of $4.7 million, so there was a 4 Q. Okay. So expenses exceeded --
5 loss booked of $4.2 million. So that was added 5 actual cash expenses exceeded revenues during
6 back to the loss. Then also there's a 6 that time period by approximately $33 and a
7 depreciation number on page 9 about halfway 7 half million?
8 down of $80,400. That was also added back. 8 A. Yes. Based on what they looked at
9 Q. Okay. And when the book loss in 9 here, yes.
10 those noncash items are added back, the net is 10 Q. Okay. Again going back to
11 the cash loss approximately? 11 Exhibit 508, the second line which says bank
12 A. Approximately, yes. 12 debt change, paren, reduction --
13 Q. Again, in 2012, Exhibit 517, can 13 A. Uh-huh.
14 you identify the same numbers? 14 Q. -- can you tell me what that row
15 A. On page 4, there's a net loss 15 depicts?
16 close to the bottom of the page of numbers of 16 A. The activity in the Fifth Third
17 $5.3 million. On page 10, roughly halfway down 17 operating loan for that period.
18 the page, there's a depreciation and 18 Q. Okay. And from where did you
19 amortization number of $57,000 and some change, 19 gather the data that's depicted in the second
20 which would be, once again, the add-back. 20 row of Exhibit 508?
21 Q. Then I think you said, for 2013, 21 A. From the financial -- the data is
22 it was the tax return? 22 from the financial statement of the firm.
23 A. Yes. 23 Q. Okay. Can you show me, in
24 Q. Exhibit 513 is -- that you 24 Exhibit 514, how that transpired?
25 identified as the 2013 tax return, can you 25 A. Let's see. If you look on page

Page 160 Page 162

1 identify where the data came for the top line? 1 3 -- are you okay?
2 A. Line item 21 on the -- on the 2 Q. Yep.
3 front page, the $3.188 million, then there's a 3 A. If you look on page 3, the top
4 depreciation add-back. It's on page 5 towards 4 line item says note payable, bank. If you look
5 the top in the upper left-hand corner of 5 at 2008, the number was $2,600,000. In 2009,
6 $53,282. 6 it was -- I'm sorry. I misspoke. 2008 was
7 Q. Are you looking at Schedule M-1? 7 $20,615,000. 2009 was $24,565,000. The
8 A. Yes, I'm sorry. Schedule M-1. 8 difference between those two numbers is the
9 Q. So in Schedule M-1, the first line 9 increase in the loan for the year, which would
10 is net income loss per books, correct? 10 mean that the firm actually borrowed an
11 A. Uh-huh. 11 additional $3.9 million from Fifth Third during
12 Q. Is that a number that would 12 the course of 2008.
13 correlate to the net income or loss that you 13 Q. Is that cash into the firm from
14 would see on a financial statement as opposed 14 borrowings?
15 to a tax return? 15 A. That's correct.
16 A. Theoretically, yes. 16 Q. And in 2010, there's a positive
17 Q. Okay. And then to that would be 17 $400,000 in that same second row. Can you show
18 added the $53,282 in depreciation? 18 me where that came from?
19 A. Yes. 19 A. On page 3, if you look at --
20 Q. Okay. And in the far right 20 towards the top, note payable, bank, for 2009,
21 column, top row under cumulative, there's a 21 it was $24,565,000, and in 2010, it was
22 number that is negative $33.5 million. Do you 22 $24,965,000. Once again, it was an increase in
23 see that? 23 the operating loan of $400,000, which would
24 A. Yes. 24 mean that the firm borrowed an additional
25 Q. What is that? 25 $400,000 from the bank.

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1 Q. Okay. And did you tell me -- tell 1 also have to refer back to the December 2010
2 us earlier, rather, that the line of credit 2 statement also. The balance on the loan on
3 from the bank was -- had a limit of 3 page 3 of Exhibit 515 under 2010 was
4 $25,000,000? 4 $24,965,000. Then the balance on page 3 of the
5 A. I don't recall saying that, but 5 December 31, 2011, statement, the note payable
6 that -- my recollection was that the limit was 6 was $15,000,000. The difference was
7 $25,000,000. 7 $9,900,000, which is the number reflected on
8 Q. Okay. In 2011, on Exhibit 508, in 8 the spreadsheet here.
9 the second line, there's a -- I think that's 9 Q. Okay. Moving to 2012, it looks
10 $9.9 million number, negative number. Do you 10 like a net reduction of $3.3 million
11 see that? 11 approximately. Can you --
12 A. Yes. 12 A. Once again, I believe that these
13 Q. What does that represent? 13 are -- it's only a single-year financial
14 A. That would be a pay-down of the 14 statement. It's not comparative. If you look
15 loan, a payment, a payment against the 15 at the balance as of -- I'm sorry, on the
16 operating loan from the firm. 16 December 2011 statement on page 3, the note
17 Q. And do you recall, in 2011, there 17 payable to the -- I'm sorry, the note payable
18 being a large pay-down of the Fifth Third Bank 18 is $15,000,000, and the note payable in 2012 is
19 line of credit? 19 $11,677,000. The difference is the
20 A. Yes. 20 $3.3 million that's reflected on the -- on the
21 Q. How did that come about? 21 spreadsheet here.
22 A. Stan took money from his Johnson 22 Q. And then in 2013, when you don't
23 investment accounts and put it in the firm, and 23 have the financial statement, as you indicated
24 it was, in turn, paid to Fifth Third to pay 24 earlier, how did you identify -- how do we
25 down the loan. 25 identify the reduction in the bank debt?

Page 164 Page 166

1 Q. Did Stan elect or choose to make 1 A. If you look at the 2013 tax
2 that pay-down on his own, or was that the 2 return -- there's no exhibit number on it.
3 demand from Fifth Third? 3 Q. It is Exhibit 513.
4 A. It was the demand from Fifth 4 A. Oh, I'm sorry. I apologize. On
5 Third. 5 page 4 of the balance sheet is line item 17,
6 Q. In 2011, how would you 6 and there's a balance at the beginning of the
7 characterize the firm's relationship with 7 year and a balance at the ending of the year on
8 lenders at Fifth Third? 8 the loan. The beginning of the year was
9 MR. SULLIVAN: Object on foundation. 9 $11,677,000. The end of the year was
10 THE WITNESS: My recollection is 10 $10,238,000. The difference is the $1.4
11 because the firm was losing money and because Stan 11 million pay-down of the loan.
12 was putting money into the firm and, thereby, 12 Q. Okay. In the cumulative column of
13 depleting his cash reserves at Johnson 13 the second row, there's a number of
14 investments, the bank was becoming concerned about 14 approximately $10.3 million. Do you see that?
15 the viability of the loan. 15 A. Yes.
16 BY MR. RAFFERTY: 16 Q. Okay. What does that represent?
17 Q. Okay. And did you interact with 17 A. That would be the net pay-down of
18 the folks at Fifth Third Bank with respect to 18 the loan over that -- the five years on this
19 the loan? 19 spreadsheet.
20 A. From time to time. 20 Q. And that represents -- is it fair
21 Q. Again showing you Exhibit 516, 21 to say that that represents approximately
22 which is the 2011 financial statement, can you 22 $15,000,000 in pay-downs, but there were about
23 identify where you obtained these numbers? 23 $4-plus million of draws?
24 A. We would actually have to refer -- 24 A. Yes.
25 this is not a comparative statement. We would 25 Q. The net effect of those?

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1 A. Yes. There were draws in the 1 (Thereupon, Exhibit 520, a copy of a

2 first two years and pay-downs in the last 2 Waite, Schneider, Bayless & Chesley document
3 three. 3 entitled Vendor Inquiry for the date range of
4 Q. In the third row, cash 4 1/1/2010 to 12/31/2010, was marked for purposes of
5 distributions to SMC, do you see that? 5 identification.)
6 A. Yes. 6 (Thereupon, Exhibit 521, a copy of a
7 Q. Okay. What does that represent? 7 Waite, Schneider, Bayless & Chesley document
8 A. There were distributions made to 8 entitled Vendor Inquiry for the date range of
9 Stan during each of these years in the form of 9 1/1/2011 to 12/31/2011, was marked for purposes of
10 cash distributions and also distributions as 10 identification.)
11 were described before, credit cards or those 11 (Thereupon, Exhibit 522, a copy of a
12 sorts of things. 12 Waite, Schneider, Bayless & Chesley document
13 Q. Okay. 13 entitled Vendor Inquiry for the date range of
14 (Thereupon, Exhibit 519, a copy of a 14 1/1/2012 to 12/31/2012, was marked for purposes of
15 Waite, Schneider, Bayless & Chesley document 15 identification.)
16 entitled Vendor Inquiry for the date range of 16 (Thereupon, Exhibit 523, a copy of a
17 1/1/2009 to 12/31/2009, was marked for purposes of 17 Waite, Schneider, Bayless & Chesley document
18 identification.) 18 entitled Vendor Inquiry for the date range of
19 BY MR. RAFFERTY: 19 1/1/2013 to 12/31/2013, was marked for purposes of
20 Q. I'm going to show you a document 20 identification.)
21 marked Exhibit 519 (providing). Do you see 21 BY MR. RAFFERTY:
22 that? 22 Q. I'll show you what's been marked
23 A. Yes. 23 as Exhibit 520, 521, 522 and 523 as well
24 Q. And can you tell me what that is? 24 (providing).
25 A. That is a report generated from 25 A. Okay.

Page 168 Page 170

1 the firm's accounting system, being Kingston 1 Q. I'll ask you what those are.
2 cloud that I told you about before. It's -- it 2 A. Those are similar reports to the
3 appears to be a listing of distributions to 3 2009 report listing the -- listing the checks
4 Stan as vendor ID number 100. This is a 4 that were disbursed to Stan for 2010, 2011,
5 listing of the distributions to Stan per that 5 2012 and 2013 respectively.
6 record. 6 Q. Okay. And these checks that were
7 Q. So are these either checks written 7 disbursed to Stan in these vendor inquiry
8 to Stan or wire transfers to Stan? 8 reports would not include the additional sums
9 A. I believe that it only covers 9 paid for Stan's benefit on, for example, the
10 checks, as I look at it. 10 American Express account that --
11 Q. If I go to the last page, there's 11 A. No.
12 a total column. Can you identify that for me? 12 Q. -- you testified about earlier?
13 A. Yes. It's $4.7 million. 13 A. That's correct.
14 Q. Okay. And at the top, there's a 14 Q. Okay.
15 couple of different rows. One of them says 15 (Thereupon, Exhibit 524, a copy of a
16 paid amount. Do you see that at the top 16 spreadsheet which is attempting to track the
17 column? 17 activity in the four Johnson investment accounts
18 A. Yes. 18 owned by Stan Chesley, was marked for purposes of
19 Q. Is that the column that we're 19 identification.)
20 looking for for the total of checks written? 20 BY MR. RAFFERTY:
21 A. Yes, I believe that that's 21 Q. I'm also going to show you what's
22 correct. It would be the paid column. 22 been marked Exhibit 524 and ask you if you've
23 Q. So in 2009, this would reflect 23 seen that before (providing).
24 checks to Stan of $4,735,000? 24 A. Yes.
25 A. Yes. 25 Q. What is it?

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1 A. It's a spreadsheet tracking -- 1 Stan -- I'm sorry, the cash distributions to

2 which is an attempt to track the activity in 2 SMC on this spreadsheet.
3 the four Johnson investment accounts that Stan 3 Q. Okay. And the cash distribution
4 owned. 4 items to Stan reflected in Exhibit 524 are the
5 Q. And who prepared this exhibit? 5 yellow highlighted items?
6 A. I prepared this spreadsheet 6 A. Yes.
7 contemporaneously. 7 Q. Using that basic calculation for
8 Q. So is that something you kept in 8 the distributions from Waite Schneider to Stan
9 the accounting system of your -- 9 over the 2009 to 2013 period, what was the
10 A. Yes. 10 aggregate distribution back to Stan?
11 Q. Is it an Excel spreadsheet? 11 A. The number here is $21,822,394.
12 A. Yes, it is. 12 (Thereupon, Exhibit 525, a copy of a
13 Q. Okay. And there are some items 13 document entitled The Recirculating $22 Million,
14 that are highlighted in yellow in here. Can 14 was marked for purposes of identification.)
15 you tell me what those are? 15 BY MR. RAFFERTY:
16 A. Those are -- those reflect the 16 Q. Let me show you what's been marked
17 distributions of the Castano proceeds that we 17 as Exhibit 525 (providing). I'll ask you if
18 discussed before. When the money was wired 18 you've seen that before.
19 from the Castano trust to the firm's IOLTA and 19 A. I believe I have, yes.
20 then, in turn, wired back to Stan's Johnson 20 Q. Okay. If we look at the top row,
21 account as distributions to Stan. 21 it says -- in Exhibit 525, it says funds from
22 Q. So looking back at Exhibit 538, 22 SMC per AF exhibit. Do you see that?
23 which was the chart prepared in the Kentucky 23 A. Yes.
24 case showing the $59,000,000, if we look on 24 Q. And then in 2009, that number is
25 page 1, there's a box labeled 2009. Do you see 25 $12,750,000?

Page 172 Page 174

1 that? 1 A. Yes.
2 A. Yes. 2 Q. And if you look at Exhibit 538, do
3 Q. And the return of funds from Waite 3 you see that corresponding number in the
4 Schneider to Stan, as reflected in these yellow 4 summary box?
5 highlights on Exhibit 25, 24, do you see those 5 A. Yes.
6 on Exhibit 538? 6 Q. And if we go across that top row
7 A. You're asking if the -- the yellow 7 for each of the years, do you see the number
8 items -- 8 corresponding to the summary box on
9 Q. Right. 9 Exhibit 538?
10 A. No. 10 A. Yes, I do.
11 Q. So the money back to Stan is not 11 Q. And then the cash distributions to
12 reflected? 12 SMC row in Exhibit 525 appears to be the same
13 A. No, it's not. 13 numbers represented in Exhibit 508 for cash
14 Q. The third row on Exhibit 508, cash 14 distributions?
15 distributions to SMC, what is that comprised 15 A. Yes, they do.
16 of? 16 Q. Okay. And so if we -- what
17 A. I believe that if you take the 17 does -- what does Exhibit 525 tell you about
18 distributions from Exhibit 519, the 18 the cash that Stan was putting in and then, in
19 $4.7 million, and then you add the -- there's 19 addition, the cash that he was receiving back
20 one, two, three -- I'm sorry, four 20 from the firm?
21 distributions. It looks like they total, 21 A. The first line is a reflection or
22 perhaps, $2.4 million. I believe that if you 22 a list of money that Stan invested in the firm
23 add the distributions from Castano to the 23 over that five-year period. The second line,
24 distributions to Stan from the spreadsheet, 24 the cash distributions to SMC, is a reasonable
25 they would total these cash distributions for 25 approximation of the distributions to Stan

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1 during that same five-year period taking into 1 Waite, Schneider, Bayless & Chesley WIP report as
2 account that it -- there may be other 2 of December 31, 2012, was marked for purposes of
3 distributions that weren't in the form of cash. 3 identification.)
4 They would have been in the form of payments on 4 BY MR. RAFFERTY:
5 credit cards and other items. 5 Q. Steve, I'm going to show you a
6 Q. So the distributions shown in 6 collection of four documents that are marked
7 Exhibit 508 and 525 would represent a 7 Exhibits 527, 528, 529 and 530 and ask you to
8 conservative estimate? 8 identify those for me, if you can (providing).
9 A. I think so. 9 A. Those are what were referred to as
10 Q. Steve, turning back to Exhibit 508 10 the WIP reports.
11 for a moment, in the absence of the cash 11 Q. And I think you testified
12 injections that were provided to the firm 12 regarding one or two of these earlier this
13 during the 2009, 2013 time period by Stan 13 morning?
14 Chesley, what would have happened to Waite 14 A. Yes.
15 Schneider? 15 Q. Okay. Again, if you will, what
16 MR. SULLIVAN: Objection. Lacks 16 was the purpose of the WIP reports?
17 foundation, calls for speculation and requires an 17 A. That concept was put in place,
18 expert opinion. Go ahead. 18 actually, before I started with the firm. As I
19 THE WITNESS: The firm was losing 19 understand it, because the firm is a -- a
20 money every year, and the primary -- the firm 20 cash-basis firm and the -- and there were a lot
21 needed to stay in existence in order to collect 21 of contingent cases on the books, the bank was
22 these -- the fees that were -- the potential fees 22 concerned that there was -- that there was a
23 that were in the pipeline. In order to keep the 23 solid potential pipeline of cash flow rolling
24 bank -- above water and also to keep the bank 24 into the future. These reports were put
25 comfortable with the operations of the firm, Stan 25 together to give a listing of potential -- it

Page 176 Page 178

1 needed to put money into the firm to make that 1 was intended to be a reasonably conservative
2 happen. 2 estimate of potential future fees -- well, I
3 BY MR. RAFFERTY: 3 should say revenues for the firm.
4 Q. And based on your experience as 4 Q. And was the -- I see the $150 an
5 a -- as a CPA and the CFO for the firm, did you 5 hour for unbilled time column. Was the $150 an
6 believe the firm needed the cash in order to 6 hour set to represent the value of that time?
7 sustain its operations? 7 A. No. My understanding was that the
8 A. Yes. 8 concept was that they wanted to estimate their
9 Q. And were you concerned that if the 9 time at a conservative level. They were -- the
10 cash was not provided, that the firm would shut 10 firm would always target a much bigger number
11 its doors? 11 than that. Once again, the firm was just
12 A. Yes. 12 trying to establish that there was a
13 (Thereupon, Exhibit 527, a copy of a 13 substantial potential pipeline. That's
14 Waite, Schneider, Bayless & Chesley WIP report as 14 conservatively stated.
15 of December 31, 2009, was marked for purposes of 15 Q. And were these WIP reports
16 identification.) 16 actually delivered to Fifth Third Bank?
17 (Thereupon, Exhibit 528, a copy of a 17 A. Yes.
18 Waite, Schneider, Bayless & Chesley WIP report as 18 Q. Exhibit 530 says, at the top, as
19 of December 31, 2010, was marked for purposes of 19 of January 31, 2012. Do you see that?
20 identification.) 20 A. Yes.
21 (Thereupon, Exhibit 529, a copy of a 21 Q. Do you believe this report is a
22 Waite, Schneider, Bayless & Chesley WIP report as 22 report as of January 31?
23 of December 31, 2011, was marked for purposes of 23 A. No, I don't believe so. I believe
24 identification.) 24 it was from May. I think that's a typo.
25 (Thereupon, Exhibit 530, a copy of a 25 Q. Why do you believe that?

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1 A. Because when I went into the Excel 1 that -- the only other attorney I remember
2 system to retrieve these reports, it was -- the 2 discussing the potential settlement value with
3 description of the report in Excel said May of 3 was Jim Cummings.
4 2012. 4 Q. Was Jim actively involved in the
5 Q. On Exhibit 530, about seven or 5 Fannie Mae case, to your knowledge?
6 eight cases down, there's a line for client 6 A. Yes.
7 number 24057, Fannie Mae. Do you see that? 7 Q. So if we look at Exhibit 530 for
8 A. Yes. 8 Fannie Mae, in the total column, it looks like
9 Q. Do you recall the Fannie Mae case? 9 the unbilled costs plus unbilled time at $150
10 A. Yes. 10 an hour was totaling $28.2 million?
11 Q. It appears that as of the 2012 WIP 11 A. Yes.
12 report that we have here, it was over 12 Q. And was it your understanding that
13 $5.8 million of costs advanced -- 13 the -- that at the time that WIP report was
14 A. Yes. 14 printed in the 2012 time frame, there was an
15 Q. -- for the Fannie Mae case? 15 expectation that Fannie Mae would have a value
16 A. Yes. 16 in excess of that?
17 Q. Do you remember Fannie Mae, during 17 A. Yes.
18 the 2009 to 2012 time period, as being a 18 (Thereupon, Exhibit 531, a copy of a
19 significant case? 19 section of a Waite, Schneider, Bayless & Chesley
20 A. Yes. 20 payroll consensus report for 2009, was marked for
21 Q. With -- what do you remember about 21 purposes of identification.)
22 Fannie Mae? 22 BY MR. RAFFERTY:
23 A. Fannie Mae was -- you mean from 23 Q. Steve, I'm going to show you
24 the standpoint of significance? 24 what's been marked as Exhibit 531 and ask you
25 Q. Yes. 25 if you've seen that before (providing).

Page 180 Page 182

1 A. Fannie Mae was far and away the 1 A. Yes.

2 largest case that the firm was working on at 2 Q. What is it?
3 that time and far and away the most 3 A. It's a -- it's a section of a
4 time-consuming case that the firm was working 4 payroll report that I submitted -- a census
5 on at the time. 5 report that I prepared each year to send to
6 Q. And did you have occasion during 6 both the pension administrators and the 401(k)
7 the time period from 2009 to 2012 into 2013 to 7 administrators.
8 talk to or have conversations with Stan Chesley 8 Q. Okay. So this is a report that
9 concerning the Fannie Mae case? 9 comes from the Waite Schneider business
10 A. He would periodically give me 10 records?
11 updates on the status. 11 A. No. It actually comes -- the
12 Q. And what do you recall about -- if 12 information for it comes from Paycor, which is
13 anything, about Stan's view of the value of the 13 the payroll service.
14 Fannie Mae case? 14 Q. And does this reflect all of the
15 A. Well, I heard of lot of numbers of 15 folks that were on the payroll of Waite,
16 the potential settlement value of the case. 16 Schneider, Bayless & Chesley for the calendar
17 Q. And what were those numbers? 17 year 2009?
18 A. A low end of $500,000,000, and I 18 A. Yes, I believe it does.
19 believe the initial -- the initial settlement 19 (Thereupon, Exhibit 532, a copy of a
20 proposal was $1.9 billion. 20 section of a Waite, Schneider, Bayless & Chesley
21 Q. And those were from Stan? 21 payroll consensus report for 2010, was marked for
22 A. Stan or other attorneys working on 22 purposes of identification.)
23 the case. 23 (Thereupon, Exhibit 533, a copy of a
24 Q. And who were the other attorneys? 24 section of a Waite, Schneider, Bayless & Chesley
25 A. As I recall, the only other person 25 payroll consensus report for 2011, was marked for

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1 purposes of identification.) 1 section of a Waite, Schneider, Bayless & Chesley

2 (Thereupon, Exhibit 534, a copy of a 2 payroll consensus report for 2014, was marked for
3 section of a Waite, Schneider, Bayless & Chesley 3 purposes of identification.)
4 payroll consensus report for 2012, was marked for 4 (Thereupon, Exhibit 537, a copy of a
5 purposes of identification.) 5 section of a Waite, Schneider, Bayless & Chesley
6 BY MR. RAFFERTY: 6 payroll consensus report for 2015, was marked for
7 Q. Same question for Exhibits 532, 7 purposes of identification.)
8 533, 534 (providing). What are those? 8 BY MR. RAFFERTY:
9 MR. SULLIVAN: What's the last year, 9 Q. Just for cleanup, Exhibits 536 and
10 534? 10 537, can you tell me what those are
11 THE WITNESS: 534 is -- 11 (providing)?
12 MR. RAFFERTY: It's 2012. 12 A. Those are similar payroll reports
13 THE WITNESS: It's 2012. 13 for 2014 and 2015 respectively.
14 MR. RAFFERTY: I have others. 14 Q. Do they reflect all of the people
15 MR. SULLIVAN: Hold on. I had 2011 15 who were W-2 employees of Waite Schneider
16 as 531. Did I make -- 16 during these years?
17 MR. RAFFERTY: Hold on. No. 2009 is 17 A. Yes.
18 531. 18 (Thereupon, Exhibit 543, a copy of a
19 MR. SULLIVAN: I have that as well. 19 document entitled Accomplishments During Wind-Up,
20 Let's go off for a second. 20 was marked for purposes of identification.)
21 (Thereupon, an off-the-record 21 BY MR. RAFFERTY:
22 discussion was had.) 22 Q. Steve, I'm going to show you an
23 BY MR. RAFFERTY: 23 exhibit that's marked Exhibit Number 543
24 Q. Steve, let me ask my question 24 (providing). Do you see that?
25 again. I've shown you Exhibits 532, 533 and 25 A. Yes.

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1 534 and asked you, are these exhibits showing 1 Q. I believe this morning Brian asked
2 all of the employees on the Waite, Schneider, 2 you some questions concerning matters that had
3 Bayless & Chesley payroll for the years 2010, 3 been accomplished in the wind-up of Waite
4 2011 and 2012? 4 Schneider.
5 A. Yes, I believe that's -- I believe 5 A. Yes.
6 that is correct. 6 Q. Do you recall that?
7 Q. And this would include lawyers, 7 A. Yes.
8 other professionals, administrative staff? 8 Q. The first item on Exhibit 543
9 A. Anyone who would have been on the 9 makes reference to sustaining Waite Schneider
10 payroll. 10 to collect legal fees. Do you see that?
11 (Thereupon, Exhibit 535, a copy of a 11 A. Yes.
12 section of a Waite, Schneider, Bayless & Chesley 12 Q. In addition to the Fannie Mae case
13 payroll consensus report for 2013, was marked for 13 that ultimately came in, are there other cases
14 purposes of identification.) 14 pending that Waite Schneider is being sustained
15 BY MR. RAFFERTY: 15 in order to maximize the recovery?
16 Q. Okay. Exhibit 535, what is that 16 A. Yes. I don't know if I could name
17 (providing)? 17 all of them. The ones of any consequence are
18 A. That's the -- a similar payroll 18 the Rocky Flats, there's also the Hanford case,
19 report for calendar year 2013. 19 and I have also recently gotten word that the
20 Q. I noticed a significant drop in 20 McCarthy case might have some value.
21 the number of people on the payroll report from 21 Q. In addition, you testified this
22 2012 to 2013. Is that consistent with your 22 morning about the payoff of the Fifth Third
23 recollection? 23 Bank debt.
24 A. Yes. 24 A. Yes.
25 (Thereupon, Exhibit 536, a copy of a 25 Q. I think you also testified about

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1 the pension. Is that -- do you recall that? 1 Q. As you sit here today, are there
2 A. We talked about it, the 2 any other lingering severance or employment
3 $1.6 million distribution -- not distribution, 3 agreements that need to be closed out that
4 but payment to the pension plan, but there was 4 you're aware of?
5 an additional 800 and some odd thousand dollar 5 A. No, I don't believe that there
6 statement into the fund in 2014 that was made 6 are.
7 to cure an underfunding issue. 7 Q. The next bullet point says
8 Q. And do you recall whether -- are 8 transitioned client files to appropriate
9 you familiar with the PBGC? 9 persons in law firms. Do you see that?
10 A. Somewhat. 10 A. Yes.
11 Q. What's your understanding of the 11 Q. Okay. Were you a participant in
12 PBGC, if anything? 12 that process?
13 A. PBGC stands for the Pension 13 A. No.
14 Benefit Guarantee Corporation. 14 Q. Are you aware whether that
15 Q. Do you recall whether there was 15 transition of client matters --
16 any activity by the PBGC with respect to the 16 A. Well, I know --
17 Waite Schneider pension? 17 Q. -- was completed?
18 A. Well, there was a -- initially the 18 A. I know that all of the cases are
19 firm talked -- as I recall, to the PBGC about 19 being handled by other firms at this point.
20 possible distressed termination of the plan, 20 Q. The next bullet point says
21 but the PBGC, as I recall, basically indicated 21 liquidated substantial office furniture and
22 that that would not be acceptable. 22 furnishings. Do you see that?
23 Q. And as you sit here today, the 23 A. Yes.
24 plan has been fully funded? 24 Q. What do you recall about the
25 A. Yes. To my understanding per 25 liquidation of those furniture and furnishings?

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1 Chuck Schneider, the plan has been fully funded 1 A. Well, the firm was two floors in
2 and all the participants have received their 2 the old PNC Tower, 15th and 16th floor. The
3 respective lump sum distributions. 3 16th floor was completely vacated. The
4 Q. The next bullet point on 4 furniture was either sold or disposed of. On
5 Exhibit 543 references discontinued and 5 15, 80 percent of the office furniture was
6 terminated medical disability and related 6 evacuated, and the furniture was, again, either
7 benefit plans. Do you see that? 7 sold or gotten rid of.
8 A. Yes. 8 Q. And when the -- when the furniture
9 Q. Were you involved in any of the 9 and furnishings were disposed of, did the --
10 activity relative to the termination of the 10 did the firm do anything with the size of its
11 benefit plans? 11 leased space?
12 A. Yes, I was. 12 A. Yes. The lease -- the lease was
13 Q. The next bullet point mentions 13 renegotiated. The lease payments prior to the
14 fulfilled employment and termination 14 renegotiation were, I believe, in the
15 arrangements with employees. Do you see that? 15 neighborhood of $45,000 a month. Now it's
16 A. Yes. 16 $4,300 a month. Did I say $4,300?
17 Q. What did that involve? 17 MR. SULLIVAN: You said $45,000, went
18 A. There were less than a handful of 18 down to $4,300.
19 employees who either had termination -- I'm 19 THE WITNESS: Okay. That's correct.
20 sorry, severance agreements, and Joe Deters had 20 I wanted to make sure I worded it right. There
21 an employment agreement with the firm. 21 are a lot of numbers.
22 Q. And were you involved in 22 MR. RAFFERTY: Off the record.
23 overseeing that those were closed out? 23 (Thereupon, an off-the-record
24 A. Yes. I had some involvement in 24 discussion was had.)
25 it, yes. 25 (Thereupon, Exhibit 544, a copy of a

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1 document entitled Remaining Tasks Under Wind-Up, 1 MR. SULLIVAN: Uh-huh.

2 was marked for purposes of identification.) 2 (Pause in proceedings.)
3 BY MR. RAFFERTY: 3 MR. RAFFERTY: I have no further
4 Q. I have now shown you what's been 4 questions.
5 marked as Exhibit 544 (providing). It has a 5 FURTHER CROSS-EXAMINATION
6 heading remaining tasks under the wind-up 6 BY MR. SULLIVAN:
7 agreement. Do you see that? 7 Q. Steve, I'm going to ask you some
8 A. Yes. 8 follow-up questions. I took your deposition
9 Q. Is this a document you've seen 9 this morning. I'm going to jump around a
10 before? 10 little bit because I'm focused on the exhibits
11 A. Yes. 11 he showed you. Okay?
12 Q. Can you describe generally what 12 A. Okay.
13 this document depicts? 13 Q. We'll start with the most recent.
14 A. I would describe it as a to-do 14 You identified a number of cases as cases for
15 list for the firm to complete the wind-up. 15 which Waite Schneider were to collect legal
16 Q. Okay. And the first item is 16 fees going forward. The McCarthy case?
17 collection of future fees? 17 A. Yes.
18 A. Yes. 18 Q. What's that?
19 Q. Is that the fees on the cases that 19 A. That was a personal injury case
20 you said were noteworthy a few minutes ago? 20 involving an individual who was harmed on a
21 A. Yes. 21 railroad car. I don't remember a lot of
22 Q. The second bullet point is the 22 details. It was a personal injury case.
23 resolution of the ongoing IRS tax audit and 23 Q. Is that Patrick McCarthy?
24 examination. 24 A. Yes.
25 A. Yes. 25 Q. Looking at Exhibit 530 tells me

Page 192 Page 194

1 Q. Can you tell me what is going on 1 there's a million dollars in unbilled costs and
2 with respect to the IRS audit and examination? 2 15,000 hours spent on that case.
3 A. My knowledge is rather limited. 3 A. Yes.
4 It's being handled by both Clark, Schaefer and 4 Q. Who is currently handling that
5 Hackett and Terry Serena. 5 case?
6 Q. There was discussion earlier about 6 A. I don't know. I would be
7 a tax lien and tax audit of Stan Chesley's 7 guessing. It's not within the firm.
8 personal taxes. Do you recall that? 8 Q. I didn't think it would be within
9 A. Yes. 9 the firm, but if it's a case in which you
10 Q. Is the -- is there a separate IRS 10 expect to collect fees, you don't know who is
11 tax audit or examination going on with respect 11 even working on it?
12 to Waite, Schneider, Bayless & Chesley? 12 A. I believe it's somebody over at
13 A. Yes. 13 the MS -- I'm sorry, Markovits, Stock and
14 Q. And that's independent of the Stan 14 DeMarco firm, but I don't know which one.
15 Chesley tax audit? 15 Q. What is the agreement that Waite
16 A. Yes. 16 Schneider has with the Markovits firm as to how
17 Q. The -- as you look down the rest 17 the fee was to be split?
18 of the bullet points on Exhibit 544, are there 18 A. I don't know that there was an
19 any items missing from that list that you 19 agreement.
20 believe, as general categories, need to be 20 Q. What was the understanding of the
21 accomplished in order for you to complete the 21 amount of money that Waite Schneider might
22 wind-up of Waite Schneider? 22 receive if that case comes to settlement or
23 A. Not that I can think of. 23 fruition?
24 MR. RAFFERTY: Can we just take a 24 A. All I know is that -- I was told
25 minute? 25 that it was rekindled. The firm lost at trial

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1 on that several years ago, and I would suppose 1 Q. Okay. So that's something that
2 there's an appeal or something of that nature 2 you've done recently, gone back and figured out
3 that's going on. 3 what was active as of 2012?
4 Q. Is this the guy in the railroad 4 A. No.
5 car lid near Lunken Airport? 5 Q. Okay. On the task of the wind-up,
6 A. Yes. 6 Exhibit 544, if my number is correct, this IRS
7 Q. That case has been kicking around 7 issue for Waite Schneider, is it fair to say
8 for a while? 8 you're not sure exactly what that entails?
9 A. Yes. 9 A. I have general knowledge, but not
10 MR. SULLIVAN: Bad use of words, I 10 specific knowledge of where it stands.
11 guess. 11 Q. Okay. An accountant at Waite
12 (Thereupon, an off-the-record 12 Schneider is not the right person to ask for
13 discussion was had.) 13 the best estimate of what's going on?
14 BY MR. SULLIVAN: 14 A. No. I'm not a tax accountant, and
15 Q. Okay. So would you agree with me 15 I'm not involved in those negotiations.
16 that it's your expectation as you sit here 16 Q. Okay. When you were talking to
17 today between Rocky Flats, Hanford, McCarthy 17 Don earlier and were going through this series
18 and Castano, the amount of fees and expenses 18 of 2009, 2010, '11, '12, '13 -- are you with
19 that might come to Waite Schneider in the 19 me?
20 future is in excess of $20,000,000? 20 A. Yes.
21 A. That's reasonable. 21 Q. Will you agree with me that during
22 Q. Okay. Are there any other cases 22 this time period, Stan Chesley was under
23 you're aware of? 23 investigation by the Kentucky Bar Association
24 A. I don't have ongoing knowledge of 24 and reports had started to come out concerning
25 activity in any of the cases. I'm not -- I'm 25 his conduct which ultimately led to his

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1 not in that loop. 1 disbarment in 2013?

2 Q. Who at Waite Schneider is keeping 2 A. I don't know the dates of all
3 track of that? 3 those activities, but I was aware that Stan was
4 A. I would say -- I would say that 4 under --
5 we're -- the firm relies on reports from sundry 5 Q. Would you agree with me that, for
6 attorneys. 6 example, when you said in 2011, Fifth Third was
7 Q. And if you were asked to prepare a 7 putting pressure on the firm to pay down the
8 WIP report as of April 15, 2013, for those 8 debt, that might have something to do with the
9 cases, you could do that? 9 fact that a trial commissioner determined in
10 A. You would have to ask me to -- I 10 Kentucky that he committed conduct so egregious
11 can't tell you which of the cases on there are 11 that he should have been disbarred?
12 still alive. 12 A. I don't know that.
13 Q. I appreciate that. I'm trying to 13 Q. You were aware -- I assume in 2011
14 figure out, if I wanted to find out, 14 when a report like that came out about the sole
15 essentially, the day Stan retired from the 15 owner of the firm, you would have been aware of
16 practice of law in Ohio, what's outstanding? 16 it?
17 A. I do not have the technical 17 MR. RAFFERTY: Objection.
18 ability to generate the WIP report from three 18 THE WITNESS: Yes.
19 years ago. I had an assistant by the name of 19 BY MR. SULLIVAN:
20 Phil Harmon who generated those for me. 20 Q. And I assume, as the accountant
21 Q. Exhibit 530, as an example, which 21 for the firm, you would have been concerned
22 you identified as a state lien, said it's 22 about the viability of the firm if the only
23 January, it's really May of 2012. When was it 23 person that owns the firm might lose his
24 rendered? 24 license?
25 A. I would imagine somewhere in 2012. 25 A. I can see where you would say

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1 that, yes. Fifth Third called for the payment 1 end of 2009, Waite Schneider did not indicate
2 on the loan. 2 in its books and records that it had a
3 Q. Right. I'm suggesting -- and you 3 liability for the pension, correct?
4 can disagree -- that that is at least one other 4 A. You mean underfunding?
5 factor that related to the viability of the 5 Q. Or any liability in connection
6 firm, if its only owner is under that kind of 6 with the funding of the plan. That's what it
7 investigation, fair? 7 says.
8 A. I don't know what the status of 8 A. Where are you reading?
9 the cases were at that time. 9 Q. Last line, paragraph five -- the
10 Q. Okay. Would you agree with me 10 first paragraph -- I'm sorry -- the company has
11 that -- during this time period, I think we 11 not recorded an asset or liability in
12 established that Stan's account at Johnson 12 connection with the projected funding status of
13 investment -- money is going from there into 13 the plan.
14 Waite Schneider, right? 14 A. Okay. I'm sorry. Can you say
15 A. Yes. 15 your question again?
16 Q. And I thought we established 16 Q. Would you agree with me that as of
17 earlier this morning that the Johnson account 17 the end of 2009, the company, meaning Waite
18 was one of the things that was securing the 18 Schneider, that it had a liability for the
19 Fifth Third debt. 19 pension plan, right?
20 A. Yes. 20 A. I would read that as saying that
21 Q. So the balance on the Johnson 21 the firm didn't have an underfunded liability.
22 account was reduced as Stan took money out and 22 Q. Okay. You just disagree with what
23 put it into Waite Schneider? 23 that sentence means? That's okay.
24 A. Yes. 24 A. I'm not saying that. I'm not
25 Q. And that caused Fifth Third to 25 saying that.

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1 grow concerned and want additional security, 1 Q. Okay.

2 which led to the Castano trust arrangement we 2 A. I guess I'm having a hard time
3 discussed this morning, correct? 3 relating your question to what's being said
4 A. Yes. 4 there.
5 Q. And the extinguishment of that 5 Q. Well, I'm kind of relating it all
6 debt is not only an extinguishment of an 6 back to this accomplishment of Waite Schneider
7 obligation of Waite Schneider, but of 7 during the wind-up in 543. It says fully
8 Mr. Chesley as a coborrower, correct? 8 funded pension delinquent and underfunded by
9 A. Yes. 9 approximately 2.7.
10 Q. Okay. If you would look at 514 -- 10 A. Okay.
11 do you have 514? 11 Q. I'm trying to figure out when that
12 A. Yes. 12 liability began. I read -- and you tell me if
13 Q. Okay. Steve, if you would turn to 13 I'm wrong -- that at least as of the end of
14 page 7, there's a paragraph five, retirement 14 2009, that was not the case.
15 plan? 15 A. Once again, there's a difference
16 A. Yes. 16 between -- once again, this is getting into
17 Q. Am I correct if I read this and 17 pension law, but my understanding is that the
18 conclude that as of December 31, 2009, the 18 plan does not have to be fully funded and --
19 pension plan was fully funded? 19 it does not have to be fully funded in order
20 A. I'm getting into pension -- 20 for you to have no under -- to not have an
21 pension law. The definition of fully funded, I 21 underfunded situation. In other words, you can
22 believe, does not necessarily mean it has to be 22 operate the pension less than fully funded, but
23 100 percent funded. There are funding minimums 23 if you're going to terminate the plan, you have
24 that need to be met. 24 to fully fund it to do so.
25 Q. Let's put it this way: As of the 25 Q. Turn to 515. I would direct you

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1 to page 7 again. The last sentence -- second 1 If you look -- if you look at -- I don't know
2 to the last sentence of the first paragraph 2 what exhibit number that is, but the number --
3 under paragraph five, retirement plans, do you 3 Q. This (indicating)?
4 see that? 4 A. Yes.
5 A. Say that again. 5 Q. That's 508.
6 Q. The sentence that says the 6 A. If you look at the profit/loss
7 estimated amount of the unfunded liability is 7 number, it's $11 million. If you look at the
8 $1.2 million? 8 net loss for the year on Exhibit 516, it shows
9 A. Yes. 9 a $15 million loss. And there's -- in addition
10 Q. Can I conclude that the unfunded 10 to depreciation, there's a $4 million add-back
11 liability at the end of 2010 is $1.2? 11 for the loss in the sale of the automobiles.
12 A. Yes. 12 Q. Maybe I missed it, and I
13 Q. Okay. And it says pension plan 13 apologize.
14 was frozen in 2010. 14 A. That's okay.
15 A. Yes. 15 Q. The $15.4 loss before taxes -- you
16 Q. Who decided to freeze it? 16 said you added back the $4.2?
17 A. That would have been Stan. 17 A. That is added back in that
18 Q. Okay. Would you agree that Stan 18 spreadsheet.
19 is the biggest beneficiary of the pension plan? 19 Q. Comprising the $11.1?
20 A. Yes, I believe he is. 20 A. Yes.
21 Q. If you turn to page 8, related 21 Q. Okay. That was my mistake.
22 party transactions, do you see that? 22 A. That's a noncash item.
23 A. I'm reading. 23 Q. All right. On page 7 of 516,
24 Q. Paragraph eight. I'm sorry. Take 24 retirement plan, do you agree that as of
25 your time. 25 12/31/2011, the unfunded liability is $1.355?

Page 204 Page 206

1 (Pause in proceedings.) 1 A. Yes.

2 THE WITNESS: Yes. 2 Q. We don't have, unfortunately,
3 BY MR. SULLIVAN: 3 these statements after 2011, so I'm trying to
4 Q. So if I looked at the records 4 figure out --
5 which I was showing you earlier about the net 5 MR. RAFFERTY: We do in '12. It's
6 loss of Waite Schneider in 2010, we're talking 6 517.
7 about the expenses exceeded the income or the 7 MR. SULLIVAN: Okay. Here it is.
8 revenue. Would you agree that some of the 8 I'm sorry.
9 expenses that are captured in those expenses 9 BY MR. SULLIVAN:
10 for the year would include payments to related 10 Q. 517, page 7.
11 parties? 11 A. I'm sorry.
12 A. Yes. 12 Q. Paragraph five, retirement plans.
13 Q. 516? You told us in your 13 A. Yes.
14 testimony from Exhibit 508, this was the year 14 Q. Okay. It says the unfunded
15 that had the largest loss. This is -- 15 liability as of 12/31/2012 is in excess of
16 MR. RAFFERTY: Is it 2011? 16 $1.5.
17 MR. SULLIVAN: Yes. 17 A. Yes.
18 BY MR. SULLIVAN: 18 Q. Is there a way I could figure out
19 Q. If I can simply read it, that's 19 exactly what that number is as of 2012?
20 more loss than any other years? 20 A. I would think that we would have
21 A. Yes. 21 to reach out to Chuck Schneider.
22 Q. Okay. Would you agree that one of 22 Q. Here's my question, Steve: As I
23 those causes for the loss is found on page 4 of 23 see employees dwindle -- we saw '13 as just a
24 the loss on sale of automobiles? 24 handful, and I know at the end of 2012 it was
25 A. No, I would not. It's backed out. 25 somewhere around $1.5, it says, in excess.

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1 Exhibit 543 says it was $2.7. How did it grow 1 quarterly when the statements from Johnson
2 by $1.2 million as the employees continued to 2 came.
3 drop off? 3 Q. Okay. What is Chesley number one?
4 A. As I understand it -- and I want 4 A. There were four different Johnson
5 to emphasize that -- there's a difference 5 investment accounts, and they were numbered
6 between minimum funding standards and being 6 one, two, three and four. That was just used
7 fully funded. I believe, without looking into 7 as a reference.
8 the historical records, that the shortfall had 8 Q. Were each of the Johnson
9 to do with -- the firm was actually beneath 9 investment accounts owned by Stan?
10 what was the minimum funding requirements. 10 A. Yes.
11 There's a shortfall to get to minimally funded 11 Q. Anyone else on the account?
12 and then additional requirement in order to be 12 A. No.
13 fully funded. The pension could not be 13 Q. Does it matter why number four was
14 terminated unless it was fully funded. 14 used to track money coming and going?
15 Q. So it was fully funded with the 15 A. I don't recall why specific funds
16 payment from the Davis settlement in September 16 were used for specific reasons. They were set
17 of '15, right? 17 up before I came.
18 A. Yes. 18 Q. If I read this right -- and you
19 Q. Again, Stan was the biggest 19 tell me if I'm wrong -- as of 12/31/2008, did
20 beneficiary of that fully funded -- 20 Stan have a little more than $49,000,000 in the
21 A. Yes, I believe it was. 21 Johnson investment?
22 Q. Incidentally on Exhibit 508 where 22 A. That's what that shows, yes.
23 you list all these cash distributions to Stan 23 Q. Okay. And these Castano fees, I
24 Chesley, does that include the approximately 24 think we established this morning, they
25 $1.5 million he received each year as a W-2 25 essentially came into the IOLTA account, then

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1 employee? 1 went out to Chesley number four in the Johnson

2 A. It does not. 2 trust --
3 Q. If we want to figure out how much 3 A. Yes.
4 was given to Stan in draws, W-2 income, 4 Q. -- until Fifth Third caused the
5 payments made on his behalf or entities that he 5 change?
6 owned or were related as we went over this 6 A. Yes.
7 morning, we would have to do a little analysis 7 Q. Okay. And since 2014 when the
8 and figure out what that number would be, 8 Fifth Third debt has been paid, those Castano
9 correct? 9 fees go where?
10 A. Yes. 10 A. They are deposited into the firm's
11 Q. You would agree with me, at a 11 account at North Side Bank.
12 minimum, it's larger than these numbers? 12 Q. And does Stan get a similar
13 A. Yes. But I think it's important 13 disbursement out like he did back in 2011, say?
14 to note that if you include the distribution to 14 A. No.
15 Stan in that -- I'm sorry, the W-2 wages to 15 Q. I forgot to ask you a question on
16 Stan in the third row there, you would have to 16 517. I apologize.
17 subtract -- add them back, rather, to the 17 A. What report is it?
18 profitability of the firm. 18 Q. 2012. If you turn to page 8, I'll
19 Q. Has either Exhibit 508 or 525 been 19 direct you to paragraph nine, going concern.
20 run through the present? It ends at 2013. 20 A. Yes.
21 A. No. 21 Q. Okay. About the middle of that
22 Q. 524, I think you told us this is a 22 talks about Stan's situation. It says due to
23 spreadsheet that was prepared contemporaneous 23 that withdrawal, the company is presently in
24 with events? 24 wind-up mode. Are you with me?
25 A. I should say it was prepared 25 A. Yes.

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1 Q. In the next sentence, it says the 1 the vendor inquiries, you told Don that these
2 period of the wind-up is uncertain as it is 2 are for checks only?
3 dependent upon the resolution of a limited 3 A. Yes. I believe that that captures
4 number of large cases which were contractually 4 only actual checks written from the firm's
5 assigned to other firms for completion, these 5 accounting system.
6 firms have a reimbursement contract on those 6 Q. So if there were wire transfers to
7 certain cases which will reimburse the firm for 7 Stan's account, we would have to add those to
8 its outlay and fees if resolved. Do you see 8 the total number at the end, right?
9 that? 9 A. Yes.
10 A. Yes. 10 Q. And obviously this doesn't include
11 Q. Do you know who provided this 11 the W-2 payments?
12 information that allowed Clark Schaefer to 12 A. It does not.
13 identify reimbursement contracts for certain 13 Q. Okay.
14 cases? 14 MR. SULLIVAN: With that, give me
15 A. I would imagine it was Stan. When 15 just a minute here.
16 the -- when the cases were sent to other firms, 16 (Pause in proceedings.)
17 Stan was obviously heavily involved in that. 17 BY MR. SULLIVAN:
18 Q. Then it goes on that other cases 18 Q. Just a couple follow-ups. On the
19 had been assigned or had been moved to other 19 WIP report we looked at earlier -- you don't
20 firms without remuneration to the company and 20 need to pull it out -- that software that's
21 no amounts for these cases will be reimbursed. 21 used to generate that, that's still available
22 Do you see that? 22 in the firm?
23 A. Yes. 23 A. Yes. Once again, it was -- my
24 Q. You're not able to identify those 24 assistant who did it was IT savvy, but I
25 for me? 25 believe it had to be done relatively

Page 212 Page 214

1 A. No. 1 contemporaneously because as new information

2 Q. And it is expected when these 2 came in, attorneys' working hours or additional
3 cases are completed, the receipts will be 3 costs, it would -- you would lose -- you know,
4 sufficient to settle the liabilities of the 4 in other words, I don't know that a snapshot
5 company. Do you see that? 5 could be taken of, say, June of 2014.
6 A. Yes. 6 Q. My question is, if someone,
7 Q. And one of the liabilities of the 7 whether it's the Court or somebody in
8 company is the note from Stan? 8 Markovits, says we're about to settle, for
9 A. Note from Stan? 9 instance, the McCarthy case, could you provide
10 Q. If you just keep reading, it says 10 us a report?
11 the firm holds notes receivable from the 11 A. I could run you a BIN.
12 stockholder. 12 Q. And a BIN would tell me all of the
13 A. Yes. 13 unbilled costs and all of the time incurred by
14 Q. Those -- those were -- that was 14 anybody working at Waite Schneider for that
15 one of the items that was dealt with in, I 15 matter?
16 believe, the subsequent year when Clark, 16 A. Yes.
17 Schaefer and Hackett made the journal entries 17 Q. And the -- do you use QuickBooks?
18 showing the netting of notes and the 18 A. Not for the firm, but for -- when
19 distributions? 19 I write Stan's personal checks for him, I do
20 Q. Okay. 20 use QuickBooks.
21 MR. SULLIVAN: Give me just one 21 Q. Okay. For Stan personally, it's
22 second. 22 QuickBooks. For the firm, it's not?
23 (Pause in proceedings.) 23 A. It's the Rippe & Kingston software
24 BY MR. SULLIVAN: 24 I told you that.
25 Q. On 519 and the others, which are 25 Q. Okay. Which is it for these

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800-894-4327
McGirr, Connie, et al. v. Rehme, Thomas F., et al. Steve Horner, CPA

1 other -- Dickens and Crumpet and Milford One?

2 A. QuickBooks.
3 Q. So it's QuickBooks for everybody
4 but Waite Schneider?
5 A. Yes.
6 Q. And you have that?
7 A. I have access to that, yes.
8 MR. SULLIVAN: I think that's all the
9 questions I have. Thanks for your time today.
10 (Thereupon, the deposition concluded
11 at 4:23 p.m.)
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1 I, STEVE HORNER, CPA, do hereby certify

2 that the foregoing is a true and accurate
3 transcription of my testimony.
4
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7 __________________________
8
9 Dated __________________________
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Page 218
1 STATE OF OHIO )
2 COUNTY OF MONTGOMERY ) SS: CERTIFICATE
3 I, Mindy R. Huffman, a Notary
4 Public within and for the State of Ohio, duly
5 commissioned and qualified,
6 DO HEREBY CERTIFY that the
7 above-named STEVE HORNER, CPA, was by me first
8 duly sworn to testify the truth, the whole truth
9 and nothing but the truth.
10 Said testimony was reduced to writing
11 by me stenographically in the presence of the
12 witness and thereafter reduced to typewriting.
13 I FURTHER CERTIFY that I am not a
14 relative or Attorney of either party, in any
15 manner interested in the event of this action, nor
16 am I, or the court reporting firm with which I am
17 affiliated, under a contract as defined in Civil
18 Rule 28(D).
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Page 219
1 IN WITNESS WHEREOF, I have hereunto set
2 my hand and seal of office at Dayton, Ohio, on
3 this 25th day of May, 2016.
4
5 _______________________________
MINDY R. HUFFMAN
6 NOTARY PUBLIC, STATE OF OHIO
My commission expires 3-21-2019
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