added 9-8-98added 9-8-98
Letter sent on Aardvark Letterhead
Jeffrey P Nolan Baker, Silberberg & Keener 2850 Ocean Park Boulevard Suite 300 Santa Monica, CA 904405
August 20, 1998
Dear Mr. Nolan
I received your August 12, 1998 letter and I do wish to respond to you.
In Smith v Brink I am in pro per. Please make sure my name and address continues on the service lists. In that case, Tom Mesereau represents Sandra Kardos. I am prepared to stipulate to a number of issues to reduce trial time and complexities. I will join in his meeting with you to develop stipulations. If you have issues you would like me to stipulate to concerning that case, send them to Mr. Mesereau and to me, at the above address, by mail or fax.
In Aardvark v IGS CV 86-600 JSL I am represented by Tom Mesereau and am not "defending myself" as your letter states".
This is a partial response to your recent letter.
The 180+ partnerships making up the Aardvark Partnerships were all general partnerships with no managing or administrative partner designated. They have the same partnership agreement as drafted by TFP and I am enclosing an Electric partnership agreement, one of the Aardvark Partnerships, (Exhibit A). This agreement clearly states at 3.4 "No partners shall have the authority to bind the partnership" and at 3.2, that all decisions "shall be decided by a majority vote of the partners".
To give me authority to represent the partnerships I obtained a power of attorney, from the majority, in ownership, of partners giving me authority to act for their partnership interest. I am enclosing a copy of that power of attorney, which was drafted by Wyman Bautzer and has Peter Smith’s signature page (Exhibit B). I will submit all of the original signed counterpart signature pages under seal to the appropriate court. I am unwilling to release these to you because they contain privileged information concerning each partner.
With the power of attorney, I included a letter (Exhibit C) advising the partners of my intended actions if they granted me the Power of Attorney. This letter clearly states:
"to defend the IRS case for the partnership, and to bring suit against T&FP to either prove the trading was real or for damages, and Understand, we did not expect to recover any money to be paid to the partners and at best we might get enough from T&FP to pay the cost of the IRS litigation."
And it asked for a fee of 2% of their original investment to fund the litigation.
The partners had already employed Sandra Kardos CPA to prepare their 1981, 1983, 1984, and 1985 partnership returns (Exhibit D). Kardos had Powers of Attorney (Exhibit E) to file the returns and administrate the partnerships years before the TFP litigation fund was even established.
Sandra Kardos CPA, who already had a multi-year relationship with each partner and Partnership, was logical choice and clearly not a surprise to any partner. Her Business address was the Partnership address on all returns except 1981. The partners had given her their Power of Attorney. It was expected by all that she would be hired to defend the partnerships before the IRS and in Tax Court. The settlement agreement confirms this at 5.5.4 "and continue to retain the firm of Sandra Kardos CPA, as plaintiff’s accountant, to do all necessary support work on the IRS litigation and to continue all necessary investor support.
The partnerships never gave any authority to Peter Smith to act on their behalf or control the TFP litigation fund. This fund has always been the property of the Aardvark Partnerships under my control. The settlement agreement (Exhibit F) at 3.2 calls for the money "shall be paid to the plaintiffs". At 3.2 "shall be placed in the TFP litigation fund" which is defined in the settlement agreement at 2.28 as "the fund created by Brink to defend the plaintiffs with respect to any claim made by the IRS and to recover funds through Aardvark". As Smith never had authority to represent a single partnership or partner, it was not necessary to remove him from a position he did not enjoy.
The "Reply To Opposition To Motion For Finding Of Good Faith Settlement", prepared by Rucker's firm (Exhibit G) dated October 31, 1988, on page 20 states in part "Nor is there any question that Mr. Brink has the express authority to represent the plaintiffs". This brief was done by Rucker's firm while representing TFP, prior to substituting in as attorney of record for the Aardvark Partnerships. Robert L. Clarkson signed it for the Rucker firm.
The settlement agreement states at 11.9.1: "Brink specifically warrants and represents that he is the attorney-in-fact for Plaintiffs and that he has received authority to act in that capacity from a majority of the partners of the 1981 Partnerships, and a majority of the individual Claimants in the 1982 Government Securities Trading Program".
At 11.9.2 "Brink specifically warrants and represents that he has the legal capacity and authority to enter into this Settlement Agreement on behalf of Plaintiffs, and each of them, and to bind them to the terms, conditions, and provisions of this Settlement Agreement and has the authority to execute any releases required by this Settlement Agreement."
On the counterpart No 1 to settlement agreement page 27, the only signature for the plaintiffs is Charles Brink. The full copy of the agreement has only my signature binding the Aardvark Partnerships. As Rucker prepared the documents and the Court approved both of these documents over the vigorous objections of the IGS counsel, this certainly defines me as the only representative of the Aardvark Partnerships.
I retained Rucker, exclusively by my signature, to represent the Aardvark Partnerships through the powers of attorney listed above, and I fired him using the same authority (Exhibit H). My authority to be the sole representative of the partnerships has the approval of the majority of partners of each partnership, the court, and the insurance companies. This should make it clear to you that I had the sole and only authority to represent the Aardvark Partnerships.
Nowhere in the settlement agreement does it call for establishing a trust or trustee. Brink, Kunkle and Smith are name as "Directors" (see section 4). No where in the settlement does it make Smith or anyone else a "trustee" or does it give the directors control of the Aardvark Partners or the Aardvark litigation. It does give (at 5.5.4.2) the directors control of the Sanda Litigation fund and the "IGS litigation". The Sandia Fund was paid in full to Rucker’s firm.
At no time did Smith, as trustee of any trust, take possession or control of the Aardvark Partnerships or their bank account. Smith has testified that he does not represent a single partnership and has never contacted any of the partners. None of my powers of attorney, including the one signed by Peter Smith, has been revoked.
The powers of attorney clearly give me the right to sue anyone as the representative of the Aardvark Partnerships. I have used this authority to bring the original Aardvark litigation. I have the authority to bring an action against your firm. I am currently contacting partners to fund this lawsuit against your firm for falsely claiming that you represent the Aardvark Partnerships in the OSC. This lawsuit will be brought with the Aardvark Partnerships as plaintiffs. The TFP litigation fund and Sandia litigation fund were bank accounts only - not legal entities and they cannot bring any legal actions.
Smith v Brink
In Smith v Brink, Smith claims to be a trustee for a non-existent trust in which he, as a trustee, does not know who the beneficiaries are. As no trust was ever established or any trustee named, it is not surprising, he knows nothing of the trust.
I expect to prove in court that Smith, in fact, represents no one but himself, has no standing to bring the action, that there is no trust, and he never was a trustee.
Even If we assume a trust does exist arising from the Aardvark litigation, then the sole beneficiary of that trust must be the plaintiffs in that case, the Aardvark Partnerships. It is incontrovertible and undisputed in any document that I am the sole representative of the Aardvark Partnerships. I don't know much about your firm except what I have been told by a couple of attorneys who have indicated willingness to represent the Aardvark Partnerships against you.
I'm sending you this letter to offer you the opportunity to extract yourself and your firm from this case with minimum legal exposure. Regardless of what happens to me, the lawsuit against you is prepared to be filed based on your claimed representation of the Aardvark Partnerships and other issues.
Peter Smith signed the substitution of attorney filed by your firm in Aardvark as director/trustee for the Aardvark Partnerships. The partnership agreement, which I have enclosed, clearly states that no one may act for any of the partnerships without the approval of the majority, in interest, of the partners. As I have shown in the documents no trust was formed, there is no Trustee, and the directors never had control of the Aardvark case. This means that you have no authority to represent my partnerships.
Will you please provide any documentation why you think Smith has the authority to act for the partnerships?
Further, in Smith v Brink, please provide documentation showing that a Trust exists, who are the trustees and who are the beneficiaries of the Trust along with the trust documents. I believe you will find that Smith is a trustee of nothing and has no standing to bring the action Smith v Brink. Smith has been notified of this and has continued action without authority.
An attorney has advised me that your firm and Mr. Smith are subject to various actions from the defendants and the alleged beneficiaries of the trusts.
Charles Brink
CC Tom Mesereau
Enclosed Exhibits
Electric Partnership agreement
Power of attorney and Peter Smith’s signature page
Letter advising my intended actions if they granted the
POA. 1981, 1983, 1984, and 1985 partnership returns.(Page 1)
Kardos Powers of Attorney (For Smith)
Settlement agreement Reply To Opposition To Motion For Finding Of Good Faith Settlement
Letter firing Rucker on December 19,1991 as attorney for Aardvark Partnerships
