Dead Solid Pluperfect

A Hot Buttered Guff™ Production

Arbortext Accounting Fraud #31: The Extraordinary Fear Of Audits

Chapter Thirty-One

The Extraordinary Fear Of Audits


On June 16, Dick Blair finally threw in the towel of sabotage and sent Dave Peralta a fax informing him that the Judge had okayed the audit and Blueberry had hired Kessler International to perform it. He even requested Peralta’s prompt and full cooperation.

The next day, Dick sent another fax. This one to me, Bernheim, and Dwan which informed us he had spoken with Peralta and Peralta had agreed to cooperate fully and expeditiously with the audit. Peralta also said he would be discussing this latest development within the company and that very likely Arbortext would proceed to give two years notice of termination of the contract and would discontinue using Blueberry’s software.

Sore loser.

And a hollow threat. Instead of canceling the contract, Arbortext chose instead to change its mind about Dave’s assurances that they would cooperate with the audit. They decided to refuse to let Kessler International perform the audit. My word, these clowns sure were deathly afraid of being audited.

At first, Arbortext said Kessler couldn’t audit because there were outstanding ownership issues with the Blueberry partners. This ridiculous tactic was debunked by a letter from me and a reminder that ownership issues had been resolved by a court trial. Which Arbortext had known about for nearly a year.

Finally, on July 30, 2004, Peralta faxed me a letter which expressed Arbortext’s great concern about close adherence to the terms of the contract with Blueberry. Pardon me, I have to leave the room for a moment and die of laughter. Attempting to foist the notion that Arbortext had any concern about abiding by the contract after all they had done to NOT abide by it was a performance of SHEER GALL that defied comprehension.

Hey Dave, try closely adhering to this line in the contract: “Arbortext’s records shall be open to examination and copying by Blueberry or its independent auditors upon reasonable notice.” Section 6.3: Records and Reports.

But Dave was not done heaving epic smelling manure. No, he went on to explain that this great concern had led Arbortext to reject Kessler International’s qualifications to perform the audit because Kessler International was not an “independent auditor.” A term he believed had a well-defined meaning.

The next paragraph of Peralta’s letter must be read to be believed. It is the most extraordinary hair-splitting abuse of the English language I have ever witnessed. Coupled with the most insanely illogical conclusion ever attempted by a supposedly rational person in the entire history of planet earth. See Exhibit N. Be sure to wear a bib. Dave is going to quote from three dictionaries to nail down this term “independent auditor.” All three examples amount to the auditor not being a member of Blueberry and not being a member of Arbortext. Which pretty much describes Kessler International. Except to Dave. Dave thinks these definitions rule out Kessler. I know I’ve had some issues lately, but seriously Dave, have you been letting Hannibal Lector play doctor with your brain?

I have mentioned Alice In Wonderland, Kafka, Rod Serling, and Spooky Shit in attempting to convey the atmosphere surrounding Mary and my life herein. This letter leaves me without any historical or literary or mystical inspiration to draw on for comparison. Guinness Records, I have a submission for you. I just don’t know how to classify it. Good luck.

Good thing we had a Receiver and a Judge who could remind Arbortext that they were required to obey the law. And the contract.


Quite the contrary. On September 1, 2004, Dick Blair resurfaced as Peralta’s subversive henchman and for the fourth time sent a letter to Judge Jensen trying to get the Judge to reverse his audit okay and let Blair negotiate the Buy Out instead. See Exhibit O for this letter.

Arbortext wasn’t a software company, it was a Mel Brooks movie with Peralta playing Dr. Frankenstein and Blair in the role of Igor. It had been five months since we’d hired Kessler International and Arbortext was going to the mat to prevent the audit from occurring.

This led Mary and I to conclude we’d better hire a Michigan attorney to assist us back there in Ann Arbor, since it was obvious Arbortext was never going to pay much attention to two unrepresented poor and powerless people located way out in California hounded by an evil Receiver at every turn.

Enter one Claudia Rast. Lawyer Number Eight. Mary trotted through the Internet, as was her wont, and located Claudia practicing law right there in Ann Arbor, the scene of the crime. Mary related our tale of woe, which was becoming second nature to her by now, and Claudia was very sympathetic and accepted our case for a small retainer. Her job would be to oversee the audit and deal with Dave Peralta somewhat more forcefully than we were able to do ourselves. As in trotting down to the court house for various types of Orders, if necessary.

In examining Dave’s absurd communication, Claudia remarked that, though he would not accept Mike Kessler and his Sherlockian magnifying glass, he did state he would accept a “top ten auditing firm” and Arbortext would split the bill. Mary and I had read this to mean “very prohibitively beyond Blueberry’s means expensive auditing firm.”

Claudia saw it differently. For one, in order for us to get Mike Kessler in the door we would most likely have to go all the way to Arbitration to simply point out that the contract expressly gave us the right to audit and to choose our auditor. Heck, the contract said Mary and I could do the audit ourselves. Even when that was accomplished, Arbortext could still refuse to cooperate and we would have to go to a Michigan court to enforce the Arbitration ruling. If all this sounds incomprehensible, it is. Except for one thing. Money. Arbortext had lots of it and we didn’t. They could play ridiculous court games till we had died of old age. Using the legal system not to gain justice, but to avoid it. Subvert it.

Certainly, Arbortext’s actions in desperately trying to prevent us from forensically auditing them did not scream out the words HONESTY IS OUR POLICY. Oh, no. They were leaking stinky numbers like an old jalopy with bad O-Rings. And how far back did it go? It stretches credulity to think that Jim Sterken and Cherie Van Allen had awakened on the wrong side of the bed on the day of our contract signing and decided to go bad where oncest they’d been good.

But play out the game we must. For Wyatt Earp has left the planet.

And so, Claudia suggested we ram Dave’s promises up his parental guidance suggested bodily cavity by simply hiring a top ten auditing firm. One such existed right down the street named Plante Moran. Number nine in the nation, at that particular moment. In fact, they had been the lead auditors in the investigation of the Enron scandal and she personally could suggest an auditor there named Mark Robinson. In the end, this would be a far less expensive solution than spending all our money simply trying to get Kessler in the door and then incurring his expenses on top of it. We’d be broke before he started.

It seemed like a good idea. At the time.

Claudia then went about introducing herself to Dick Blair and Dave Peralta as our Michigan attorney and informing them that we were taking Peralta up on his offer. It could have been a flashback from my days living near farms in Iowa, but I distinctly thought I heard the sound of cud choking somewhere off toward the north east that evening while sitting on the swing with Mary. She thought I was being utterly ridiculous.

We were out there enjoying our final days of enjoying the swing. For hiring Mike Kessler, we had borrowed five thousand from JohnPaul’s savings account, knowing we could pay him back when the house sold. For Claudia’s retainer, we borrowed money from Mary’s ex-husband. Hang my head. Now, for Plante Moran, we borrowed money from two of my sisters and one of my brothers. And Mary’s brother James was still fronting the mortgage payments. Negative financing had become a staple of our lives.

Perhaps we should form a Dot Com company while we were hot. Wait! Blueberry was a dot com company. But it had been formed before Dots were the rage. Before they were lucrative disasters. Before Windows. Before the Internet World. Back in the Unix sub-society. We had missed the boat by rafting out to sea too soon.

Well, the raft part was at least accurate. For our life now, anyway. We were about to be set adrift into the vast and unpredictable ocean of America.

The most heart wrenching contribution we received during these final days, however, was the smallest. One day we found in our mailbox an envelope, without a return address, containing one hundred and seven dollars and seventy-five cents – in cash and three quarters. The handwritten note inside simply said, “I heard you could use some help.”

This anonymous Samaritan had given us all he/she had in the piggy bank. An extraordinary and selfless act of mercy and generosity. Truly amazing. Whoever you are, kind person, Mary and I thank you from the bottom of our hearts. You brought both of us to tears and reminded us, at a time we sorely needed reminding, that good people really do exist out there in the larger world around us.


To be continued . . .

Free Hit Counter website statistics


July 30, 2008 - Posted by | Business, Law, Stories, Writing | , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: