Dead Solid Pluperfect

A Hot Buttered Guff™ Production

Arbortext Royalty Fraud #26: Surrounded by Wolves

Chapter Twenty-Six

Surrounded by Wolves


I don’t know if Dick Blair was an unethical scoundrel as a general rule, or if he just donned the black hat while acting as Blueberry’s Receiver. It did appear to me, however, that he exhibited a comfort level with his twisted machinations that strongly suggested he had quite a bit of prior practice in scoundreling. And not just a comfort level. No, this was a man who enjoyed what he did.

Morgan, Miller, and Blair was a very successful, hoity-toity law firm in Walnut Creek. Why would a full partner in this firm bother himself much with a small potatoes Receivership for a poor, beat up little dissolution matter? A dissolving company with very marginal assets, either for the company or for the two individuals in the company. As I said earlier, Blair’s secretary could have handled his Receivership duties without breaking a sweat.

Mary and I had a few theories about this. Well, I did anyway. Mary basically had only one: I don’t want to talk about that man. It was her standard reply when I broached one of my theories with her.

The theory that to me seemed closest to the truth was a simple one. Dick had discovered fairly early in his legal career that he was a lousy lawyer and he could make a whole lot more money skimming it out of dissolving companies than he could by representing clients. It was easy work, nobody was watching, the money was there, just reach in and grab a handful. Handling a law suit could max out a lawyer for a year or more. But a lawyer could handle scads of Receiverships all year long, week in week out, without even working on Fridays. Even tiny tots like Blueberry had some free money to shift into his pockets with a little creative time-card stretching. And for Dick, no money was too small for his appetite.

Lending credence to this theory was Dick’s reaction, when we first visited him in his office and informed him of the $120,000 that VistaSource owed Blueberry. He promptly gazed towards the ceiling and began stroking his beard fondly. “That’s a nice chunk of change,” he murmured.

Real lawyers don’t speak folksy like that. Con artists do.

Combining that sentiment with his previously mentioned remark about the VistaSource money being “his” money, not Blueberry’s, and I believe I’ll rest my case here on the viability of my best guess theory. No exotic psychological space flights necessary. He was just a shyster, let’s face it.

As January of 2004 wended its way over the horizon, Dick’s Receivership plans fell into place as neat as an inside straight. When Arbortext laid $100,000 on the table, combined with the $120,000 due from VistaSource, his game plan was clear. He could force the Buy Out, which would get Dwan his half of the dissolution money and leave me with virtually nothing, and gouge his own retirement fund out of the VistaSource money. The only purpose Mary and I served was to provide Blair with the personal satisfaction that he had ruined us but good.

We had Blair, Bernheim, and Dwan chewing at us from behind, and Sterken, Schiavone, and Peralta barricading the doors in front of us. All six trying to determine the fate of a contract and a company that none of them had any ownership rights to.

And Judge D. Lowell Jensen was deaf to our pleas to him to kindly enforce his ruling and inform Blair that he was completely out of order.

So there we sat in the middle of the mayhem, watching our life crumble around us. Six months after winning sole ownership of Blueberry and its source code, I effectively owned nothing. Given the responsibility of maintaining and administering the Arbortext contract, I was prevented from doing so. Blair was simply ignoring the Court Ruling and making up his own. With the active and enthusiastic help of Bernheim and Dwan.

Our dispute with Arbortext had come up in the court trial with Dwan and the Judge had remarked, “Sounds like a possible law suit.”

That was six months ago, yet Blair had not yet asked to be briefed on the case or examine our evidence. He had managed to examine virtually everything else about Blueberry and certainly all of Dwan’s endless list of complaints and fears. But the one item that represented serious concern and monetary improvement for Blueberry – and thus both of the two ex-partners – did not interest him at all. It involved helping me and cooperating with me and that was a Dick Blair taboo. He preferred instead to cooperate with the party he should be looking into possibly suing.

Dick’s own agenda was all that mattered to him. And after we had openly questioned his motives and performance, destroying us had elevated itself from mere amusement to lethal intent.

After a few phone calls with Peralta, bringing himself up to snuff on the Arbortext/Blueberry dispute, without even once discussing with Mary or me the Blueberry version of the dispute, Dick Blair was ready to launch his assault. Clever shyster that he was, Dick enticed Peralta to write him a letter explaining Arbortext’s viewpoint, which Dick could submit to the Judge, making Dick a passive conduit of news, rather than an active advocate. Needless to say, his conduit did not include any counter-balancing viewpoint letter from Mary and me.

Peralta’s letter (see Exhibit H) was surely not intended to be read as high comedy. He was, after all, a CFO business type guy. Not exactly a profession known for humor.

Still, the letter was, if not humorous, certainly comedic. Arbortext didn’t just want to buy Blueberry out of the contract, they wanted to end making royalty payments and yet continue to have absolute rights to all of Blueberry’s source code in perpetuity. Even though “we expect the need for the Blueberry technology in our client base to lessen dramatically over the next 2-3 years.”

Peralta even went so far as to predict the declining royalties Blueberry would be experiencing in the future. On royalties! What omniprescience had Dave been endowed with? “For 2003 product sales, Arbortext paid Blueberry royalties of $33,520 under the existing contract. For a similar level of product sales in 2004 and future years, Arbortext will pay Blueberry annual royalties of $29,112 under the existing contract.”

Why would “annual royalties of a similar level of product sales in 2004” be less “under the existing contract” than they were now in 2003? Because Dave asserted Arbortext would be applying an 8% discount rate to them. Where was this mentioned in the “existing contract”?

I won’t point out that $29,112 represents a 13% discount, not an 8% discount. No sense further embarrassing this highly skilled MBA. Besides, Dave wasn’t hired for his arithmetic skills. He was hired to cover up a fraudulent accounting system.

America’s businesses. Purring along with all this high-powered, highly educated, superior CFO brain power. Makes you want to rush out and by some stocks – in foreign companies.

Let me pause for what appears to be some simple arithmetic. If Blueberry’s royalties would certainly decline, why would Arbortext not simply let them decline? Or force them to with Discount Dave’s magic eraser? Why pay us $100,000 instead, if simple declination cost less? This did not appear to be a sound business proposal. Unless, of course, the hidden motive was to Shut Blueberry Up. Permanently. And to prevent the discovery that, just as Mary and I suspected, the royalties owed were far greater than $100,000.

Which Dave did not address.

Why any of them, especially old $350 an hour wizard attorney Dick Blair, could not come to awareness of the absurdness of Peralta’s statements and his offer was a leading indicator that Blair and Bernheim and Dwan SIMPLY DIDN’T GIVE A CRAP WHETHER IT MADE SENSE OR NOT.

Mary and I, on the other hand, demurred.

Not to be demurred lightly, Dick decided to haul out the Judge for an In Camera session disguised as a “bringing the court up to date on his receivership” agenda (oh, right. VistaSource. We’d almost forgotten it. Whatever happened with that, anyway?). And to discuss Peralta’s letter with the Judge. Try to get his okay to ram it down our throats.

Hi ho, hi ho. It’s back to court we go.


To be continued . . .

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July 21, 2008 - Posted by | Business, Law, Life, Stories, Writing | , , , ,

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