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Northwest Territorial Mint - Page 9
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Thread: Northwest Territorial Mint

  1. #81
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    Are the rumors actually true, he has an inside track to the rumor mill... Documents attached to the bottom, not much said but very interesting just the same.


    Chapter 7 Rumor


    September 1, 2017 from about.ag

    I recently heard that there was talk that Chapter 11 Trustee Mark Calvert might be considering converting the case to Chapter 7. I do not see any signs of this, aside from a request made for a status conference (which the judge denied).

    Chapter 11 is "reorganization", where debts are paid to the extent possible while allowing the business to continue. In this case, the idea is to get the company running and growing with reliable accounting records and to sell the business, with the proceeds going to creditors (not Ross Hansen, the owner of the company).

    A Chapter 7 bankruptcy is "liquidation" -- essentially a "fire sale." The idea is to shut down operations and pretty quickly sell whatever assets there are, with any proceeds going to creditors. Most bankruptcies are Chapter 7, but Chapter 11 typically provides the best results to creditors if it is possible to reorganize the business successfully. A Trustee would normally only consider converting to Chapter 7 if the business could not continue profitably, and a Chapter 7 liquidation would therefore provide more money.

    In the June, 2017 monthly financial report (from just over a month ago) the idea of liquidation came up, but only if the business could not be successfully sold. The more recent July monthly financial report (from a couple weeks ago) does not mention the possibility of liquidation, although with the difficulties NWTM has faced, it certainly cannot be ruled out.

    If I get further information, I will certainly report it here."



    Trustees request for a hearing: http://about.ag/pics/bk/nwt/1171.pdf

    Judges denial to that request: http://about.ag/pics/bk/nwt/1179.pdf

    Which sounded more like a, "get your sh!t together notice" to the trustee..
    Last edited by valerb; 2nd September 2017 at 03:27.
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  2. #82
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    Sounds like Diane said to herself, "splainen" is for fools if I can end up going to jail cause my "splainen" isn't consistent.


    Diane Erdmann Pleads the Fifth

    September 25, 2017 2:20PM

    The Trustee just filed the August Monthly Financial Report.

    In it, he says that he conducted a 2004 exam of Diane Erdmann on August 3, 2017. He states "At the deposition, Diane Erdman invoked her 5th amendment rights in connection with questioning regarding her liquidation of the precious metals and her prior sworn testimony." The Fifth Amendment states that no person "... shall be compelled in any criminal case to be a witness against himself," and is usually used in criminal proceedings so a defendant does not have to answer questions that could incriminate themselves.

    To be clear, there is currently no criminal case against anyone involved in what happened at NWT Mint (but at least one criminal investigation is in the works).
    Last edited by valerb; 26th September 2017 at 05:02.
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  3. #83
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    I suspect the AG isn't the only one having accounting problems!!! For a company that is run so bad that they would have already run through $35 million of their customers money by 2008, I find it hard to believe they would somehow find the skills to come back to a point in the future and only be $20 million behind and then go all the way up to $45 million behind again.

    It's hard to argue with the final number, but how these people seemed to arrive at them from 2008 - 2016 amazes me. It sounds more like, pick a number out of a hat and throw it at yearly calendars and that's what we'll go with.

    Think about this Dollar amount, it has to represent the value or the number of ounces of Silver that was not delivered to their customers. That does not change in the future, only the value of those ounces and at the end of 2008 it was only worth around $10.50 an ounce at best or the equivalent to 3.3 million ounces of Silver short. Carry that number of ounces short out to 2011 and they would have been short $158 million in value at the $48 level, assuming they had not managed to lose any additional customer money over the next 2 1/2 years.

    Just extend the same loss out to their demise in April of 2016 and their final value at a loss of $45 million at a spot price of $16 an ounce = 2.8 million ounces. Somehow they managed to run their business into the ground by 2008 with 3.3 million ounces of our Silver and yet over the next 7 1/2 years managed to put 500K of it back, while being accused of stealing it for different purposes.

    Put another way, they produced around 50,000 ounces a day at maximum capacity at their height or so it was said. If they were short 3.3 million ounces in capital to run the business, they would need to delay every order out to a minimum of 13 weeks with 5 work day's or 13 weeks forever without falling behind another ounce and that wasn't the case. Business drastically fell off for everyone after 2008 and that would have pushed the order delay out many more weeks beyond a 13 week delay just to stay open and keep the pyramid going.

    I'm not trying to defend NWTM, just trying to point out the absurdity associated with the numbers put out by the Bankruptcy trustee and his accusation about how things were then and now in making his case for whatever.

    What he should be doing is finding a safe hiding spot from the creditors for spending the rest of what's left of their claim.

    Hansen, he belongs in Jail, but will that ever happen, it's hard to put one financial crook in jail without putting all of them and that's not what they do any more to protect one another.



    Attorney General Completely and Utterly Fooled

    ... AG Signed Consent Decree With NWT $35M In The Hole

    October 4, 2017 3:25PM

    The Chapter 11 Trustee Mark Calvert yesterday filed a Report of Investigation and Status Report. Most information is already known, but the lengthy report is likely worth a read.
    What is shocking, however, is that it confirms the incompetence of the Washington State Attorney General in 2008. In February, 2008, the Attorney General filed a complaint against NWT Mint and Ross Hansen, stating that "Consumers have ... waited months for their orders to arrive." A multi-month delay means one of two things: either the company is poorly managed, or it is engaging in financial shenanigans (e.g. delaying orders to keep the interest, trying to time the market, embezzling the money, etc.). But by September, 2008, the Attorney General and NWT Mint shook hands with a Consent Decree, letting NWT Mint continue their practices with certain restrictions and allowances.

    We have known for a year or so that the Washington State Attorney General in recent years was incompetent. One of the AG's goals for 2015 was to "Proactively enforce state and federal consumer protection laws by investigating alleged unlawful activity and taking legal action when appropriate to compensate consumers and deter illegal activity and deceptive practices in the marketplace." In 2015, NWT Mint was running a $30 million Ponzi-like scheme. This is a company that the AG had already tried suing, and had a signed Consent Decree with, and the AG even received more complaints in 2015 about NWT Mint than any other Washington State company (except 3 household names bound to generate complaints:

    Amazon, Microsoft, and Expedia). Is "flying over the radar" a thing?

    But things get worse. This report shows that at the end of December, 2008, about 3 months after the Consent Decree was filed, NWT Mint had assets of about $19M and liabilities of about $55M -- in other words, they owed customers $35,000,000 more than they had. They were insolvent. How can an Attorney General possibly sue a company for delaying millions of dollars of orders by months, and then sign a Consent Decree without even checking their finances?



    The report also says:


    •The assets seized from Ross and Diane (by the defamation victim) included precious metal worth $149,000 and $6,000 in cash

    •The Trustee contacted about 50 potential purchasers for the business, assembled by his company. 8 of them signed confidentiality agreements, 4 toured the operations, and 3 made offers. All 3 offers focused on the liquidation value, and therefore were not acceptable to the Trustee.

    •Later, 2 more parties expressed interest in investing $4M-$5M for a 50% interest in the company, with the balance in a liquidation trust for creditors. Another investor expressed interest in paying $2M for a 20% share.

    •From 2008 to 2016, the company had about $1.2 billion of revenue

    •There were no physical inventories conducted from 2010 through 2016

    •There were no financial statements for fiscal years 2011-2016 [p18]

    •"The results of the analysis suggest that the company had total customer liabilities ranging from a low of $20 million to a high of $45 million over the period 2008 to 2016."

    •"the Company was insolvent from 2008 to 2016"

    •"it appears that the company had attributes of a “Ponzi” or “lapping” scheme from at least (though likely earlier) 2008 to 2016."
    Last edited by valerb; 4th October 2017 at 22:05.
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  4. #84
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    New Lawsuit Against NWTM and Ross Hansen

    October 6, 2017 8:30AM

    I have just found out that the State of Washington Department of Financial Institutions Securities Division sued NWT Mint and Ross Hansen in July, for violation of the Commodity Transactions Act of Washington. The lawsuit states "Any commodity transaction that takes longer than 28 days for delivery will fall under the Act unless an exemption applies." According to the State, it appears this provision of the law has been on the books since at least 1997.

    The lawsuit by itself is fairly meaningless to creditors: it is asking NWTM and Hansen to stop doing this (it stopped over a year ago), and the State intends to fine each $10,000.

    However, it contains information that has the potential to shed more light on the situation, as well as where the Attorney General failed.

    Among other things, it states that between April, 2014 and September, 2014, 70% of the 2,430 orders NWTM took were shipped more than 10 weeks after payment cleared.
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    This is a partial list of the complaints and action or inaction taken by the state AG office and potential problems as reported by this (not me) web master on October 23,2017


    Then Versus Now

    How Many Complaints to Take Action?

    When the AG sued NWT Mint in February, 2008, they reported that the AG's office, BBB, and FTC had received a total of 82 consumer complaints. According to a statement by NWT Mint, in 2007 the AG only received 11 complaints against NWT Mint. I believe it is safe to rely on that number, since NWT Mint announced it in a press release 2 days after the AG sued NWT Mint.

    Compare that with 2013, when the Attorney General's office received 12 complaints. That's more complaints than it originally took to sue NWT Mint. This time, it wasn't about some unknown company; these complaints were about a company that the AG's office had previously sued and signed a Consent Decree with. From my reading, in at least 5 of those cases NWT Mint violated the Consent Decree. NWT Mint didn't even bother to respond to 2 more of them (despite being required by the Consent Decree to respond to customers within 48 hours). How in the world can the Attorney General simply close complaints against a company they previously sued, when the company does not even respond?

    Then, compare it with 2014, when there were 23 complaints filed with the Attorney General (more than twice as many as it took to originally sue them). In fact, NWT Mint in 2014 failed to respond to 11 of the 23 complaints.

    And in 2015, the AG logged 77 complaints against NWT Mint. And still, the AG did not take action.




    Escalated 2013 Complaint


    October 23, 2017 6:35PM

    On January 28, 2013 the Attorney General recorded a complaint from a NWT Mint customer. He stated that he ordered on October 8, 2012, and was told his order would ship by December 28, 2012. The order was delayed, entering the 30-day period (if the order does not ship by the end of the 30 days, an immediate refund of the higher of spot or price paid is required). The customer pointed out that while NWT Mint stated that the 30-day period expired on January 28, it actually expired on January 27, and NWT Mint declined his refund (which is a violation of the Consent Decree: they are required to immediately refund the money; there is no other option, even if the customer begs for delivery).

    The Attorney General dutifully passed the information on to NWT Mint. NWT Mint's in-house counsel apparently lied and stated "Mr. [name removed]’s order was shipped before his 30 day extended shipping time had run [out]." They did not dispute that the order was originally scheduled to ship by December 28. Anyone with a calendar can check this out. The AG tried closing the complaint based on NWT Mint's response, oblivious to the blatant lie. That I can understand: they didn't bother checking a calendar to see who was right, and assumed the company's attorney was right.

    The AG re-opened the file, and the customer stated "The [Consent Decree] has actually provided cover for this business to behave in a manner that I have not seen with other businesses. ... The business model is designed to cheat customers." The customer stated that the AG acknowledged that NWT Mint missed the "drop dead" date (which would be a violation of the Consent Decree if no immediate refund was issued, as was the case here).

    The AG's office then wrote "Your complaint has been discussed with Assistant Attorney General Paula Selis and she is in agreement with our assessment and decision to close your complaint after the receiving the businesses response." Ms. Selis drew up the Consent Decree, so is intimately aware of its details. Apparently she either couldn't figure out that NWT Mint violated the Decree, or felt that NWT Mint violating the Decree was unimportant. The "after the receiving the businesses response" part is damning: it suggests that they felt that the complaint should not have been closed, if not for what NWT Mint said. But the dates confirm that the customer was right. That seems like blatant incompetence for a case that was escalated to the person that signed the Consent Decree.




    Facts


    October 23, 2017 6:15PM

    [I expect to update this section occasionally]
    Complaints to the Attorney General, by year, 2011-2015:


    Year

    # Complaints

    # No Response

    2010 2+ 0+
    2011 3+ 0+
    2012 5+ 0+
    2013 12 2
    2014 23 11
    2015 77 9+


    Quick Sample of 2014 Complaints

    October 23, 2017 1:20PM

    The Attorney General's standard response to complaints included "We may open a formal investigation or take enforcement action pursuant to the Consumer Protection Act at any time if the facts and circumstances indicate that further action is warranted."
    So what should the Attorney General do with a company that in 2014 received complaints like these:
    •"I am on a fixed income and wondering if I should be concerned of loosing most of my savings to a less than scrupulous business"
    •"Please help me I am 83 years old and can't afford to lose this amount of money"
    •"If the company is running a Ponzi scheme, I want my money before the scheme collapses"
    •"PLEASE HELP ME GET MY ORDERS FULFILLED and stop this company from having their operations financed by other people's money."
    All 4 of those comments were made in complaints filed in the first half of 2014, and NWTM only bothered to respond to 1 of them. And the Attorney General allowed this scheme to continue.



    AG Gave Blessing to Illegal Activity


    October 23, 2017 12:30PM

    As I recently reported, the State of Washington Department of Financial Institutions Securities Division (SoWDoFISD?) sued NWT Mint and Ross Hansen. The SoWDoFISD served Hansen, who had 20 days to request a hearing, but failed to do so. The SoWDoFISD then entered a Findings of Fact and Conclusions of Law.

    The summary: The "Conclusions of Law" paragraph 3 states "The offer and/or sale of said commodity, commodity contract, or commodity option violated RCW 21.30.020 because the offer and/or sale was made by a person not exempt under RCW 21.30.030 and the transaction or contract was not exempt under RCW 21.30.040." In other words, NWT Mint selling metal and taking over 28 days to deliver was illegal. It implies that the illegal activity was ongoing since at least early 2008.

    It now seems clear that the Attorney General giving his blessing to NWT Mint operating in a way that violates Washington State law, through the Consent Decree that the AG and NWT Mint signed. We've long known that the Consent Decree gave NWT Mint the AG's blessing to operate in the way they were (e.g. NWT Mint often mentioned the Consent Decree when responding to BBB and AG complaints). But now Washington State has confirmed that NWT Mint's operations were illegal.

    In fairness to the Attorney General, the Consent Decree section 6.7 states "Nothing in this Consent Decree shall be construed as authority for non-compliance with all federal and state laws, including but not limited to those regulating the sale and trading of commodities or securities." In other words, the Consent Decree did not authorize NWT Mint to operate illegally. But there is not a single case under the Consent Decree where the AG would have required delivery in less than 28 days, as Washington State commodities law requires. In fact, the Consent Decree typically allowed NWT Mint over 3 months to deliver metal (and possibly much longer).

    One must also wonder why the 2008 Consent Decree mentioned state laws regulation the trading of commodities. Clearly, the Attorney General does not want to sign documents that could be construed as authorizing illegal behavior. But it appears that the Consent Decree only contemplated behavior that is now known to be illegal. Did the Attorney General draw up the Consent Decree knowing that it might allow behavior violating state commodities law (the AG knew the laws existed)? Did the Attorney General know the practice was illegal in Washington, but allow it to continue anyway? Or did the Attorney General simply not understand whether NWT Mint was violating the law (and if so, why did the SoWDoFISD so easily determine that the law was broken)?

    This is all the more disturbing because NWT Mint relied on the Consent Decree to keep people like me from discovering the fraud early on. I started looking closely into NWT Mint in mid-2014, and then even more closely in late 2014. When people asked me, I made it clear that there was no way to tell if NWT Mint had severe financial problems or not. But I couldn't publish anything or encourage people to complain to authorities, since they were (to the best of my knowledge at that time) operating within the law (and for fear of being sued by Hansen). Had the Attorney General done his job and realized in 2008 that NWT Mint was operating illegally, or checked NWT Mint's finances, NWT Mint would have been shut down years ago.
    Last edited by valerb; 23rd October 2017 at 23:49.
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  6. #86
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    This is a multi-part posted today with the first part posted above. Good luck with any potential sale...


    AG Gave Blessing to Illegal Activity

    This is posted in the message above.


    Dick Bressler Files $9M Claim for $3M Investment

    October 23, 2017 3:40PM

    Dick Bressler, who gave Ross Hansen $3,000,000.00 to purchase Medallic Art Company in 2009, and according to the NWT Mint Trustee received approximately $763,000 in distributions from Medallic, recently filed a claim for $9,000,000.00.

    In March, 2017, Mr. Bressler signed a Settlement Agreement that would have allowed him a general unsecured $3M claim, with no other claim possible in the case, in exchange for supporting consolidation of NWT Mint and Medallic. The Trustee filed a motion for the court to authorize the settlement, and the Creditors' Committee supported it. However, the judge denied the motion (the consolidation had already been approved, the judge felt that Mr. Bressler did not have the ability to fight the motion, and the judge did not want it to appear that Mr. Bressler's testimony could be bought). The judge appeared to believe that the $3M claim was worth much more than whatever Mr. Bressler would be giving up.

    Apparently, Mr. Bressler was upset at the judge. The judge pointed out that Mr. Bressler had not filed a claim, then saying "And the claims bar date has passed, so he's got no claims against the estate." So clearly, the judge thought that Mr. Bressler was not going to be able to have a claim. He was hoping to have a general unsecured claim for $3M, but when that was denied, he decided to put in a $9M claim, stating that NWT Mint violated the RICO act and therefore he is entitled to 3 times their damages.

    Mr. Bressler's claim does not seem to state why he feels that his $9M claim should be allowed nearly a year after the bar date, and his negotiations for a $3M claim failed.

    Note: Mr. Bressler believed he was the legal part owner of Medallic Art that was in dispute until earlier this year when the above took place, which may very well be a great reason not to file a claim against NWTM which he wasn't a partner to or claimant.



    Potential Buyer

    October 23, 2017 4:00PM

    The Trustee filed the September, 2017 Monthly Financial Report. Exhibit 11 (p47) states:

    "The Trustee is in discussions with a potential buyer for the estate and continues to entertain offers for the operating business. The terms are under discussion and we anticipate obtaining a term sheet in the next 30 days. The Trustee objective as of this point is to sell the company to maximize the recovery for the estate and for creditors. Any party with an interest in acquiring the business should contact the Trustee. Total filed claims are in excess of $70 million and the recovery will be limited such that creditors should not expect a high percentage of recovery on their claims. If the tight cash flow issues cannot be resolved, the Trustee will need to close the business and liquidate the assets on terms that will provide very little return to creditors."

    Note that only about $40M of the claims are for customers.
    Last edited by valerb; 24th October 2017 at 00:10.
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    Well it's about time we are getting closer to the potential end of this fiasco, but I seriously doubt it will be as simple as just selling the remnants of NWTM. They still seem to have a number of issues to be resolved regarding potential creditors, who and how much, before they can shell out what hasn't already been spent by the trustee and friends. If I'm not mistaken, NWTM has borrowed some money to keep operating and whatever that is, will come off the top.


    Trustee Wants to Sell NWT by End of Year

    November 18, 2017 8:15AM

    The Chapter 11 Trustee, Mark Calvert, has filed the October, 2017 Monthly Financial Report. The "Other Information" section of the financial reports typically has the most useful information. The financial reports have lots of numbers, but they are all post-bankruptcy numbers, which aren't nearly as important as pre-bankruptcy numbers.

    According to the Trustee, NWT Mint has received a signed asset purchase and sale agreement. This likely means that they have a very serious buyer. The Trustee is expecting to verify the source of funding, and if successful, accept the offer and present it to the Court for approval. He expects to file a motion to approve the sale this month, with a closing by the end of next month.

    It does not provide many clues as to how much money creditors might see from this, aside from "a limited recovery."


    And I want to add a special "Thank You" to the person who has sent me copies of quite a few important court documents, including this one.
    Last edited by valerb; 19th November 2017 at 04:52.
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    Here is some additional information in greater detail regarding the potential sale.



    The Chapter 11 Trustee, Mark Calvert, filed the latest Monthly Financial Report on Friday.

    In it, he says that NWT Mint has received a signed asset purchase and sale agreement, that he expects to file a motion to approve the sale this month, and that he expects a closing date by the end of next month.

    So what does this mean? First, the signed asset purchase and sale agreement suggests that they have a serious buyer who has spent some money doing due diligence (checking to make sure they know exactly what they will be getting) and paying an attorney to either draft or review the agreement. Second, if things go as planned, they will be moving quickly (especially since the sale requires court approval).

    If this does get sold by the end of the year, there would presumably be a fair bit of cash received. It would, however, be much less than the $70M or so of claims against NWT Mint. And there are many bankruptcy expenses that would get paid before creditors (the Trustee, his financial company, and the attorneys have filed for a total of $4.1M of fees/expenses so far). No information is known at this point about how much money the sale is expected to bring in, aside from previous offers suggesting a valuation of roughly $10M.

    I imagine that shortly after the sale, the Trustee would work on getting the first distribution (payment) sent to creditors. The bankruptcy will likely not end at that point, however, for two reasons: first, there may be other ways of recovering some money, and second, the sale might involve payments made over time. As for other ways of recovering money, in the Tulving Company bankruptcy, a multi-million dollar lawsuit was filed against two people who allegedly siphoned money out of the company. Similar actions could have the potential of bringing in more money, but it would be surprising for such actions to bring in enough cash to make a noticeable dent in the amount of claims.

    JG from about.ag
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    Diane Wants Her Metal Back

    December 8, 2017 8:15PM

    Diane Erdmann, de-facto wife of NWT Mint owner Ross Hansen, has requested the return of items seized from their home shortly after the bankruptcy (due to the defamation judgment).

    The declaration lists the items that were seized, valued at $95,000.
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    Judge: I am Deeply Unhappy with [Calvert's] Report

    December 12, 2017 2:15PM

    On October 6, 2017, there was a hearing regarding the expenses of the bankruptcy professionals. It provides some new (pseudo-)transparency into the case (it isn't really transparent, since the hearings are much harder/costlier to access than standard court documents, but lets us know how the Judge feels).

    Apparently, the Judge had requested that the professionals file their fee applications, because he was concerned about the potential expenses. Just prior to the hearing, Chapter 11 Trustee Mark Calvert filed a status report. What was not known is that this wasn't something that was required: he apparently filed it to help justify the expenses.

    The Judge pointed out that the fee applications (for roughly $4M) did not include projected fees, which is required by local rules. You would think if you made $525/hour you would remember the local bankruptcy rules for your state.

    It was also pointed out that the chair of the Creditors' Committee had been sharing information with Ross Hansen througout the course of the case, and subsequently resigned. This is information creditors need to know, and shouldn't be hidden in a hearing.

    The Judge pointed out that there are many Cascade Capital expenses (Cascade is the company of the Trustee) that are really bankruptcy administrative expenses, not accounting. That's an issue because the expenses of the Trustee -- who should be doing that work -- get capped, whereas the other professionals do not have a mandated cap on their expenses. He also pointed out $20K spent on data entry, with no explanation of why it was necessary. The Judge was also concerned that the cap on the Trustee's expenses was not mentioned, and it looked like he was going to try to include $900K of metal returned to customers as distributions (which would increase his cap).

    Then there is the expense application of the law firm used by the Trustee, K & L Gates. The Judge said "So, you’re going to need to tell me why you should be paid for pursuing what I thought what was a doctored and phony dispute... you sought to settle a phony dispute and then presented a sweetheart settlement deal and I have denied them both."

    The worst was the status report. The Judge stated "You can’t really think that this is an objective report. It is, it is filled with allegations, many of which are very severe, unproven. It contains allegations that you’ve litigated that were not proven. I ruled against you. It contains representations that are not true. ... this is basically a personal attack on Ms. Erdmann and Mr. Ross Hansen. But the balance of it is explaining all your victories and all the great things you’ve done. But there’s zero balance, because you’ve had setbacks. I’ve made rulings against you. The rulings are not on the web site are they?"

    The Judge said of the Trustee's status report "there’s a lot of ... patting yourself on the back about all the things that the Trustee has done," and "I was this close ... to saying yank the web site because you are putting improper and inappropriate things on there ... I told you that you were not to put anything on the web site other than just the facts, ma’am. This is not that. This is a vituperative attack on the one hand and on the other hand it is saying how great and how many victories you’ve had without any mention that you’ve had some setbacks ... It’s either, if I can’t trust you to do the web site, then I think the option is to not have a trustee to run the estate. Okay?"

    So it seems pretty clear that while the Trustee is bashing Ross Hansen and Diane Erdmann, the Judge believes that the Trustee isn't exactly behaving very well himself.

    [I am hoping to post a copy of the transcript online, if I can get permission from the person who kindly sent it to me.]
    I'm a proud member of Eggshellman's Liar, Shill, and bully club and a new member of the Super Jew Defense League!!!

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