Dirtiest Trials of the Twentieth Century
The Who's Who Worldwide Registry Tragedy

1457
19
20 Court Reporter: HARRY RAPAPORT, CSR
United States District Court
21 Two Uniondale Avenue
Uniondale, New York 11553
22 (516) 485-6558
23
Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1459
1 M O R N I N G S E S S I O N
2
3 (Whereupon, the following takes place in the
4 absence of the jury.)
5 THE COURT: Mr. Trabulus, you wanted to see me?
6 MR. TRABULUS: Yes, your Honor. I wanted to
7 raise a matter that came up yesterday in the questioning
8 of Mr. Ackerman. If you remember, I sought to question

9 Mr. Ackerman on some of his grand jury testimony which I
10 regarded as inconsistent and your Honor regarded as
11 otherwise.
12 I would like to renew my application to question
13 him about it, and not on that basis. But his recollection
14 was refreshed on direct examination with that grand jury
15 testimony. And that's something which, frankly, I simply
16 forgot to mention to your Honor at the point, and that
17 appeared on page 1403. He was directed to that particular
18 grand jury testimony. He was asked to look at pages 20 to
19 23 on the grand jury testimony, and I was going to
20 question him with regard to a portion of that.
21 I think on the basis that he refreshed his
22 testimony on the witness stand on direct, and I ought to
23 be able to question him specifically as to what he said he
24 was reading.
25 THE COURT: I am lost completely.

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1 MR. TRABULUS: Mr. Ackerman refreshed his
2 recollection --
3 THE COURT: What did he say that was
4 inconsistent?
5 MR. TRABULUS: He said on page 20 of his grand
6 jury testimony with his 3500-5-A, and beginning at line
7 20.
8 Question: Now, did Mr. Gordon ever tell you
9 that, for example, he owed the IRS a lot of money
10 personally?
11 Answer: He once indicated to me in a
12 conversation to my recall that he owed the IRS money from
13 prior years.
14 Question: Did he say anything else regarding
15 that? Do you recall the context in which it came up?
16 Answer: The context in which it came up was
17 because I asked him to the best of my recall, I said why
18 did you do the transfers, what was going on and was it
19 Reed.
20 He said, I wasn't scared of Reed. I never was
21 scared of Reed. I never thought that Reed was going to
22 win the judgment, and I think he mentioned that he owed
23 taxes. That's the portion that was included within what
24 he was asked to refresh his recollection with. I am not
25 saying I would necessarily question him about it today if

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1461
1 your Honor permits me, but I would like permission to do
2 so.
3 THE COURT: What is inconsistent with what he has
4 testified to yesterday at the trial? I don't understand
5 that.
6 MR. TRABULUS: When he testified at the trial, he
7 didn't say I think. The point is he was asked this in the
8 grand jury. He was asked the context in which the
9 conversation came up about owing the IRS money. And he
10 said, well, we had a conversation about the transfers, and
11 I think that's when he mentioned he owed taxes. And I
12 think he was more definite, he was more definite --
13 THE COURT: I will let you say, didn't you say I
14 think he said that. That's what you want to bring out?
15 MR. TRABULUS: Yes.
16 THE COURT: All right. I will let you bring that
17 out.
18 I have to make a phone call, and we will start
19 shortly.
20 (Whereupon, at this time there was a pause in the
21 proceedings.)
22 THE COURT: Yes, Mr. Neville.
23 MR. NEVILLE: I wanted to ask the Court if it is
24 possible, when you speak to the jury sometimes, we can't
25 hear you too well in the back. I was wondering if you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1462
1 could raise your voice a little or use a microphone, just
2 the moments when you speak to the jury.
3 THE COURT: I will not use the microphone. But I
4 will raise my voice.

5 MR. NEVILLE: As long as you don't yell at me
6 when you raise your voice.
7 THE COURT: I will never do that.
8 MR. NEVILLE: A little later the lawyers will
9 talk about the Friday schedule perhaps. Some of us have
10 some things.
11 THE COURT: At a break we can discuss it.
12 (Whereupon, the jury at this time entered the
13 courtroom.)
14
15 N E I L A C K E R M A N ,
16 called as a witness, having been previously
17 duly sworn, was examined and testified as
18 follows:
19
20 THE COURT: Good morning, members of the jury.
21 Please be seated.
22 Again I want to thank you for your punctuality,
23 your sense of responsibility, your dedication. I am going
24 to have to look in the book and get some more words
25 because you have been doing a great job. I must apologize

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 for keeping you waiting. It was entirely my fault. I had
2 some other matters on. And at the last minute I had to
3 take care of something.
4 I want to assure you that the lawyers and the
5 parties were all here on time as you were. It was the
6 Court that caused the delay.
7 Also, I am told that occasionally, because of
8 noise in the back of the courtroom my voice is not
9 carrying to all parts of the courtroom. So I will have to
10 talk louder. Slower I always talk, but louder.
11 You may proceed.
12 You have been previously sworn and you are under
13 oath, Mr. Ackerman. You understand that?
14 THE WITNESS: Yes, I am.
15 THE COURT: How am I doing back there? You hear
16 me now.
17 MR. NEVILLE: Beautiful, Judge.
18
19 CROSS-EXAMINATION (cont'd)
20 BY MR. TRABULUS:
21 Q Good morning, Mr . Ackerman.
22 A Good morning.
23 Q You have Exhibit 646 in front of you?
24 A Yes.
25 Q And that's the statement your firm prepared?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 A Rivkin Radler and Kremer, yes.
2 Q Right, your firm at the time?
3 A Yes.
4 Q And I think you testified on direct examination that
5 that covered the period June through December 30th, of
6 1994; do you recall that?
7 A Yes.
8 Q Take a look at it again, and see whether in fact it
9 covers just August through December, 1994. Some of it is
10 hard to read. Look at the first page.
11 A The first page says 8 instead of 6.
12 Q So that would be August?
13 A Yes, that's correct.
14 Q And during this time period, that's a two month time
15 period?
16 A Yes.
17 Q The bill for services, and I am leaving out the
18 disbursements or expenses, but the bill for services was
19 somewhat in excess of $51,000; was it not?
20 A Yes.
21 Q And that represented a total of 297.7 hours of time
22 spent by attorneys and paralegals at your firm, correct,
23 at the Rivkin Radler firm?
24 A As summarized on page 38, yes.
25 Q Now, just in terms of who was working on it and how

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Ackerman-cross/Trabulus

1 much time they put in, you put in 50.1 hours; is that
2 correct?
3 A That's what is recorded there.
4 Q And there were two other attorneys who actually put
5 in more time than you did, in fact, three other attorneys;
6 is that correct, is that Mr. Kardisch, K A R D I S C H, he
7 put in.
8 His billing is 65.3 hours; is that correct?
9 A Yes, as recorded.

10 Q And Ms. Yehuda, Y E H U D A, 52.4 hours; is that
11 correct?
12 A Yes.
13 Q And yesterday you spoke about Mr. Catalanello?
14 A Catalanello.
15 Q Sorry if I mispronounced it, but his time is 89.4
16 hours; is that correct?
17 A Recorded, yes.
18 Q And I think you indicated that sometimes there is
19 time spent that isn't recorded; is that correct?
20 A There is always that possibility.
21 Q Always there is that. But in terms of what was
22 recorded these were recorded; is that correct?
23 A Yes.
24 Q These time records, included in Exhibit 636, contain
25 some fairly detailed indications of what the various

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Ackerman-cross/Trabulus

1 people reported that they did on particular days, both the
2 number of hours, and also the description of who they

3 spoke to and what they spoke about, and so forth; is that
4 fair to say?
5 A Yes.
6 Q I would like to direct your attention to page 2 of
7 this document --
8 THE COURT: Is this Government's Exhibit 636?
9 MR. TRABULUS: Yes. I will only be speaking
10 about that until I indicate another exhibit number. 636.
11 Q That contains entries for Mr. Kardisch?
12 A Yes.
13 Q And did Mr. Kardisch occupy a position at Rivkin
14 similar to yours?
15 A He was a partner in litigation department.
16 Q You were a partner in the bankruptcy department?
17 A The head of the bankruptcy department.
18 Q When I say -- he was comparable to you?
19 A Yes.
20 Q And you both billed at the same rate when I say
21 comparable?
22 A I wouldn't be surprised, right.
23 Q And Mr. Kardisch was involved in an adversary
24 proceeding in this particular bankruptcy; is that correct?
25 A Yes.

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Ackerman-cross/Trabulus

1 Q And that's an adversary proceeding, which is a
2 lawsuit within the bankruptcy; is that correct?
3 A Yes.
4 Q And that was being brought on behalf of Who's Who; is
5 that correct?
6 A Yes.
7 Q Now, I think you mentioned earlier yesterday in
8 response to Mr. White that Mr. Gordon told you he never
9 had expected to lose the lawsuit that Reed had brought; is
10 that correct?
11 A Yes.
12 Q And that he never had been afraid of Reed?
13 A Yes.
14 Q Now, in the notes -- in the bill that Mr. Kardisch,
15 that portion of the bill, the entry on page 2 --
16 THE COURT: Actually, it is page 1, isn't it?
17 MR. TRABULUS: Your Honor, I am referring to page
18 2. It has the word page 2 at the bottom. Kardisch begins
19 at page 1, but he continues.
20 THE COURT: All right.
21 MR. TRABULUS: Let me just ask the witness.
22 On this bill the time of the particular people is
23 generally indicated on -- above the first date for which
24 they put in time; is that correct?
25 A On the first line of their entry.

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Ackerman-cross/Trabulus

1 Q The first line?
2 A Yes.
3 Q Of their entry?
4 A Yes.
5 Q Take a look at page 2.
6 Are those also time entries for Mr. Kardisch?
7 A Those are Mr. Kardisch's time entries, yes.
8 Q Just to make sure about that.
9 A Yes.
10 Q Now, there is a reference here for August 5th, 1994,
11 where he indicates, and I will read part -- the whole
12 thing. Meet with Bruce Gordon, Marty Reffsin, Niel Flaum
13 and associates, do you have it?
14 A Yes, I have it right in front of me.
15 Q Re bankruptcy and adversary proceedings, and matter
16 before Magistrate Jordan, review all documentation from
17 trademark infringement action before Magistrate Jordan,
18 preliminary injunction and appellate matters, review
19 bankruptcy pleadings, work on engagement agreement.
20 Do you know what the reference there is to the
21 preliminary injunction and appellate matters?
22 A I think it referred to the fact they were taking the
23 appeal from Magistrate Jordan's decision, and that was
24 included in the appeal --
25 Q How about the reference to the preliminary

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 injunction? Are you familiar with a preliminary
2 injunction as it may have related to this?
3 A I am familiar with prelimina ry injunctions in
4 general. I don't know how it related to this.
5 Q Do you recall ever having a conversation with
6 Mr. Gordon concerning whether or not there had been an
7 injunction for preliminary injunction brought by Reed?
8 A At the beginning of their lawsuit before the
9 bankruptcy?
10 Q Yes.
11 A Oh, yes.
12 Q Did Mr. Gordon explain to you that Who's Who had won
13 that?
14 A Yes, absolutely.
15 Q And that's one of the reasons he never expected to
16 lose the case ultimately?
17 A That and the fact that the denial had been appealed,
18 and they lost an appeal also.
19 Q Reed lost it on appeal?
20 A Yes.
21 Q Up to the point where the judgment had been awarded
22 against Who's Who, there had been some prior decisions
23 which Who's Who had won; is that correct?
24 A Yes. In that separate federal court litigation.

25 Q Right, it wasn't in the bankruptcy. These things

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Ackerman-cross/Trabulus

1 happened before you got involved; is that correct?
2 A Before the bankruptcy was even filed, yes.
3 Q In fact, the bankruptcy was only filed because there
4 was a judgment in favor of Reed for over 1.6 million
5 dollars; is that correct?
6 A It was filed after such judgment was entered, yes.
7 Q Did Mr. Gordon explain to you that if it had not been
8 for that judgment there never would have been any
9 bankruptcy filing?
10 A That was stated to me.
11 Q Now, yesterday -- let me ask you, Mr. White asked you
12 yesterday if you ever had a conversation with Mr. Gordon,
13 in which he told you that the logs were not correct. Do
14 you recall being asked that question or something similar
15 to that by Mr. White?
16 A I believe so, yes.
17 Q And let me ask you this: Did you ever have a
18 conversation with Mr. Gordon in which he told you that the
19 logs were correct? Yes or no.
20 A I had a conversation with him when he was preparing
21 the logs, or when we talked about the logs.
22 Q Before they were prepared?
23 A Before they were sent to my firm.
24 Q Did he tell you that he had seen them, Mr. Gordon?
25 A No. He told me that he was upset that he had

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 prepared that.
2 Q Leave that aside. Did I ask you that? Did I ask you
3 whether he was upset?
4 A I can't answer yes or no to your question. I am
5 sorry.
6 Q Well, didn't I ask you whether or not you had ever
7 had a conversation with Mr. Gordon in which he told you
8 that the logs were incorrect -- excuse me, were correct?
9 Did you ever have that conversation -- did he ever have
10 that question with you? Yes or no, sir? Is that a
11 difficult question?
12 MR. WHITE: Objection.
13 THE COURT: Sustained.
14 MR. TRABULUS: Withdrawn.
15 Q Did he ever tell you that the logs were correct?
16 A I can't answer that question yes or no.
17 Q Did he ever tell you that he had seen the logs after
18 they were prepared, yes or no.
19 A After they were prepared?
20 Q Did he ever tell you, yes, that he had seen them,
21 reviewed them?
22 A On the -- it was sent to me on the 23rd. I was not
23 even in the firm.
24 Q You were out because you were sick or --
25 A I was ill.

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Ackerman-cross/Trabulus

1 Q Okay.
2 MR. JENKS: Norman, he hasn't answered the
3 question.
4 MR. TRABULUS: I know.
5 MR. TRABULUS: Bear with me a moment, your
6 Honor?
7 THE COURT: Sure.
8 (Whereupon, at this time there was a pause in the
9 proceedings.)
10 (Document handed to the witness.)
11 Q Mr. Ackerman, I have shown you 640-A, which is in
12 evidence, and just to remind the jury, that's a fax that I
13 think you indicated that you had sent to Bruce Gordon and
14 Marty Reffsin; is that correct?
15 A Yes, a cover sheet, with a letter on it.
16 Q And annexed to it is a copy of the letter by which
17 you had sent the logs over to the other side; is that
18 correct?
19 A Yes.
20 Q Now, in -- so, basically you sent a fax to Bruce
21 Gordon and to Mr. Reffsin, letting them know among other
22 things that you had sent the logs over to the other side;
23 is that correct?
24 A Ye s, cc'ing copies of the letter, yes.
25 Q And also in the fax you sent to Mr. Gordon and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 Mr. Reffsin, did you not say, and I am reading the last
2 paragraph: I think it would be a good idea for Marty and
3 me to talk and possibly meet on Monday or Tuesday, and for
4 all of us, including Bruce, to talk and possibly meet on
5 Wednesday or Thursday.
6 That is in there; is that correct?
7 A Yes, it is.
8 Q Now, as you sit here today, do you recall whether any
9 of those suggested meetings or conversations ever
10 occurred?
11 A Right now, no, I do not.
12 Q Why don't you take a look at 636 and see whether or
13 not they did. They would be reflected in there, would
14 they not?
15 A They may be, if the hearing came off on the next
16 Friday. So metimes things get adjourned and, therefore,
17 you adjourn the meetings. Let me take a look.
18 I see on 9/27/94, which is page 17 -- let me make
19 sure it is my entries.
20 Q Sure.
21 I will be asking you to look at other people's
22 entries in a moment, too. We are on 636.
23 A 9/27/94, first several lines, telephone call from
24 Bruce Gordon, conference to Marty Reffsin, scheduled
25 meeting at which we can review all. And then I continue,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 telephone call to Doug Skalka, the attorney for Reed,
2 advised him that my wife was having operation on Thursday,
3 and although it is not exactly the same time as hearing on
4 Friday --
5 THE COURT: You have to slow down, Mr. Ackerman.
6 THE WITNESS: Forgive me, sir.
7 THE COURT: You have to speak slower. We have to
8 understand it and hear it, and the reporter has to take it
9 down. Speak slower, will you?
10 THE WITNESS: Yes, sir.
11 Let me start --
12 THE COURT: You are not the only one who does
13 that. Everyone who reads, reads quickly. Everyone reads
14 at a faster rate than they speak. This is a phenomena
15 which I said many times when I retire I will explore
16 this. I may write a book on this some day.
17 However, since I don't intend to retire ever, I
18 don't know when I am going to write the book.
19 Go ahead.
20 THE WITNESS: I will begin again with the words
21 from the third line --
22 Q What page are you on?
23 A Page 17, the third line, starting with the middle of
24 that third line.
25 Telephone call to Doug Skalka. I am inserting

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cros s/Trabulus

1 the words not written there. He was the attorney for
2 Reed. Continuing. Advised him that my wife is having
3 operation on Thursday and although is not exactly same
4 time as hearing on Friday, would be appreciated if he
5 could talk about giving adjournment.
6 Q Okay.
7 A And then it goes on and talks about the fact that
8 there was an adjournment agreed to.
9 Q Let me ask you, Mr. Ackerman, have you gone through
10 these -- this statement, 636, to see whether or not there
11 is any entry in it by anybody at the Rivkin Radler firm
12 which indicates a discussion, whether in person, by
13 telephone or however, with Mr. Gordon concerning the logs
14 after they were prepared?
15 A Have I gone through it? No.
16 Q Would you please do so now.
17 A There is an entry on 9/19/94, a telephone call with
18 Bruce Gordon, which may or may not have pertained to that.
19 Q Were the logs completed by that day?
20 A No. They were not sent to my office until 9/23.
21 There were questions that came up in the meantime when he
22 was preparing them.
23 Q You say he prepared them, do you mean he personally
24 prepared them, Bruce Gordon?
25 A I should not have used that word. They were prepared

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 by Who's Who.
2 Q Thank you.
3 9/19, that's for you?
4 A Yes.
5 Q What page?
6 A That's 9/19/94, page 15 of this exhibit.
7 I see also --
8 Q Can you read that entry.
9 A Telephone call with Bruce Gordon.
10 Q Thank you. That's all it says?
11 A Yes.
12 Q Before going on to the next thing you were going to
13 talk about, throughout this statement there are numerous

14 references to telephone calls or conversations with Bruce
15 Gordon concerning many things; is that correct?
16 A Yes.
17 Q And there are many, many different subjects that can
18 be discussed with him; is that correct?
19 A Yes.
20 Q And so, there was nothing in the entry you just read
21 that indicated that the logs came up before that, yes or
22 no, sir?
23 A There is nothing in such entry.
24 Q And, indeed, there are pages and pages of entries
25 including conversations with Mr. Gordon and Mr. Reffsin as

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Ackerman-cross/Trabulus

1 well, sometimes separate, which make no mention about the
2 logs; is that right?
3 A Yes, that's correct.
4 Q Continue to the next point that you were going to be
5 talking about. What were you going to point out?
6 A On 9/22/9 4, there were -- there is another entry,
7 telephone calls with Gordon, conference with Josh, and
8 telephone calls with Marty Reffsin.
9 Q Does the word "log" appear there?
10 A No, sir.
11 Q Is there any reference to the property in which the
12 logs are kept?
13 A No, there is not.
14 Q There is nothing at all there indicating there was
15 any reference to the logs?
16 A The fact that there was no entry leads me to believe
17 that there was something that we could -- I could not
18 write about because of attorney/client privilege.
19 Q I see, you are saying there was no mention in the
20 logs -- excuse me, let me see what we are talking about
21 here.
22 Are you saying that it would have been a
23 violation of the attorney/client privilege to simply refer
24 to the fact that the logs were discussed? Yes or no, sir?
25 A No, I am not sayin g that.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 Q In fact, there were other entries in which the logs
2 were referred to; is that correct?
3 A Yes.
4 Q So -- but let's -- do you have a specific
5 recollection -- this is page 18?
6 A That was page 15, I believe.
7 Q I am sorry.
8 Page 15 was the one that simply said telephone
9 call with Bruce Gordon, three-tenths of an hour?
10 A 9/19/94, yes.
11 Q What is the one you are on now?
12 A Then there is 9/22 slash 94.
13 Q That's .4 hours?
14 A Yes.
15 Q Telephone call with Gordon, conference with Josh,
16 telephone calls with Marty Reffsin, etcetera?
17 A Yes.
18 Q Josh is Josh Kardisch?
19 A Yes.
20 Q Josh Kardisch is the litigation partner?
21 A Yes.
22 Q Josh Kardisch is the one involv ed in the adversary
23 proceeding; is that correct?
24 A Yes.
25 Q And the adversary proceedings had nothing to do with

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 the logs, did it?
2 A No, it did not.
3 Q Let's continue. Any other references to the logs?
4 A Line 23, but I was out that day.
5 Q Incidentally, Mr. Ackerman, did I ask you for -- to
6 identify entries in this statement that indicated
7 conversations with Bruce Gordon concerning the logs? Was
8 that my question to you?
9 A Yes, and I felt that it might have indicated that,
10 yes.
11 Q Did I ask you to indicate entries in the log that did
12 not indicate conversations with Bruce Gordon concerning
13 the logs, but which you now say, well maybe we didn't put
14 it down? Did I ask you that?
15 MR. WHITE: Objection , your Honor.
16 THE COURT: Sustained as to form.
17 Q Okay.
18 Continue with trying to find an entry concerning
19 any conversation with Bruce Gordon on the logs.
20 A After 9/19/94?
21 Q Keep going.
22 A Okay.
23 Q Anywhere.
24 A I see nothing until the end of the month as to me.
25 Q As to you. So you see nothing at all as to you?

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Ackerman-cross/Trabulus

1 A On -- from 9/23/94 on.
2 Q Okay.
3 Are there any indications here in any of the
4 entries that there was any conversation between you and
5 Bruce Gordon concerning the contents of the logs at any
6 time after they were in existence or -- withdrawn.
7 You have answered September 17th, September 22nd
8 and September 23rd and forward.
9 Are there any earlier conversations that are
10 reflected here in which the contents of the logs are
11 discussed with Bruce Gordon?
12 A I don't believe so.
13 Q Let's go to some of the other attorneys.
14 A Sure.
15 Q I would like you to look at the entries for the other
16 attorneys and see whether there is any indication whether
17 any of them spoke to Bruce Gordon concerning logs?
18 A There is nothing for Richard Weber that I could say.
19 Q Is Richard Weber the one you would logically look to
20 see what you were doing?
21 A Richard was helping me on the case, the primary
22 associates on the case was Gerard. Richard was working --
23 Q Let's deal with Mr. Weber so we know what you are
24 talking about.
25 There is on page 31 an entry --

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Ackerman-cross/Trabulus

1 A 31 or 21?
2 Q 31.
3 A I am sorr y.
4 Okay.
5 Q Was that Richard Weber's?
6 A It appears to be Gerard Catalanello's.
7 Q He was the principal associate?
8 A Yes. He was doing the case on day to day. Not just
9 one matter, but day to day.
10 Q Would you look to -- again I hope I pronounce it
11 correctly, but Mr. Catalanello's entries are particularly
12 detailed?
13 A Yes.
14 Q And they are more detailed than any other attorney's
15 entries, are they not?
16 A They are very detailed.
17 Q Okay.
18 Do you find any entry by Mr. Catalanello
19 indicating he discussed the contents of the logs with
20 Mr. Gordon?
21 A On page 31?
22 Q Well, on any page.
23 A On page 31, he refers to the fact that he discussed
24 them with Maria Gaspar. Let me start again from the
25 beginning, sorry.

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Ackerman-cross/Trabulus

1 Q By the way, there was no attorney/client privilege
2 that presented that from being included in that entry,
3 that he discussed it with Maria Gaspar?
4 A It would depend on the contents of the conversation.
5 Q The fact that the subject matter was discussed, it is
6 not privileged?
7 A The subject matter is not what I am concerned about.
8 I am concerned about revealing certain confidences on the
9 time slip --
10 Q In this incidence, was there anything revealed by
11 saying the log was discussed?
12 A Since Gerard put it in and I did not take it out, I
13 would not think so here.
14 Q Since you discussed the logs with Mr. Gordon
15 yourself, would the fact that -- putting it in have
16 revealed any attorney/client privilege any more than
17 Mr. Catalanello would?
18 A The substance of the conver sation would concern me,
19 not the fact that there was a conversation.
20 Q Did Mr. Catalanello indicate what the conversation
21 was?
22 A No, he said he had a discussion with respect to the
23 logs, and that it was maintained in accordance with the
24 stipulation.
25 Q Continue to look with any conversation that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Mr. Catalanello indicated he had with Mr. Gordon?
2 A Okay.
3 Q If any.
4 A I see nothing else on Mr. Catalanello's time slip.
5 Q You have already looked at Mr. Weber's?
6 A Yes, I have.
7 Q Have you checked the other attorneys that would be
8 reasonable to check on to this?
9 A I don't think that Josh would have anything to do
10 with that.
11 Q Okay.
12 A And I think the rest were paralegals. Let me check.

13 (Whereupon, at this time there was a pause in the
14 proceedings.)
15 A There were some entries in Josh Kardisch's time about
16 preparing for discovery, but I believe they pertained only
17 to the adversary proceedings.
18 Q Which would not have involved the logs?
19 A Not to my belief at this point, no.
20 Q So, is it fair to say that the only entries in this
21 entire statement which indicated that the contents of the
22 logs may have been discussed would be the entry on page
23 31, Mr. Catalanello's?
24 A The only entry which specifically stated they were
25 discussed was the entry on page 31.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Ackerman-cross/Trabulus

1 Q Could you read that portion of that entry.
2 A Yes. It is in the middle of the page on page 31.
3 Discussion with Maria -- M. Gaspar, controller, reg arding
4 property user's log that was and is being maintained in
5 accordance with stipulation and order, re-faxing same,
6 M. Reffsin's comments slash suggestions thereto, etcetera.
7 Q That's the part that relates to the logs?
8 A That's the part that directly states that, yes.
9 Q It doesn't mention Mr. Gordon at all; is that
10 correct?
11 A No, it does not.
12 Q And there are other entries of Mr. Catalanello's that
13 mention Mr. Gordon, does it not?
14 A Yes.
15 Q And indeed, the very next entry on the very next page
16 mentions Mr. Gordon, does it not? The very next words?
17 A Yes, it does.
18 Q Would you read that.
19 A It says discussions with B. Gordon regarding possible
20 adjournments of the 9/30/94 hearing date until 11/4/94.
21 Q And it continues, Reed's change in position --
22 A And decision to continue with hearing on 9/30/ 94.
23 Q And Mr. Catalanello had numerous other entries in his
24 entries, with respect to conversations with Mr. Gordon,
25 for example papers, briefs being submitted and arguments,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1485
Ackerman-cross/Trabulus

1 and so forth. Would you take a look.
2 (Whereupon, at this time there was a pause in the
3 proceedings.)
4 Q Perhaps I will withdraw the word "numerous" and just
5 simply say others.
6 A There were other discussions here in the time sheets.
7 Q Nothing relating to the logs; is that correct?
8 A Correct, none that I can see.
9 Q Okay.
10 Now, yesterday I believe you indicated you heard
11 something about a partial repayment by Mr. Gordon of his
12 loan from the corporation; do you recall that?
13 A Yes.
14 MR. TRABULUS: May I have 772, please?
15 (Coun sel confer.)
16 MR. TRABULUS: Your Honor, the parties stipulated
17 that 772 may be received in evidence.
18 THE COURT: Is that right, Mr. White?
19 MR. WHITE: Yes.
20 THE COURT: What is 772?
21 MR. TRABULUS: 772 is a check. It indicates it
22 is on the account of Bruce Gordon payable to Who's Who
23 Worldwide Registry, Inc., in the sum of $20,000.
24 THE COURT: What is the date?
25 MR. TRABULUS: The date on the check is April

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1486
Ackerman-cross/Trabulus

1 22nd, 1994, and it bears the number 1,001.
2 THE COURT: Government's Exhibit 772 in
3 evidence.
4 (Government's Exhibit 772 received in evidence.)
5 Q Now, Mr. Ackerman, have you ever seen that check
6 before?
7 A No.
8 Q Look at the entry, the memo entry on it. What does
9 it say?
10 A Par tial payment loan.
11 Q Now, this check is dated April 22nd -- April 27th,
12 1994. Take a look at it.
13 A Yes, it is, April 27th.
14 Q And that is after the bankruptcy had been filed; is
15 that correct?
16 A I believe the bankruptcy was filed in February or
17 March of 1994. Possibly in April, I am not quite sure.
18 Q Now, seeing this check, even if you may never have
19 seen the check before, does it refresh your recollection
20 any further concerning what you may have learned about any
21 repayment by Mr. Gordon?
22 A I had heard that there had been repayments on a loan.
23 Q Repayments, more than just that one, yes?
24 A Maybe I shouldn't have used that word. There had
25 been some repayment on a loan.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1487
Ackerman-cross/Trabulus

1 Q Some repayments on a loan? That's wha t you heard?
2 (The witness nods his head.)
3 Q You have to say yes or no. The reporter can't take
4 down a nod, even though we can all see it.
5 A Sorry, yes.
6 Q Now, this particular repayment was at a time when the
7 Who's Who was in bankruptcy; is that correct?
8 A I believe that Who's Who filed bankruptcy in April or
9 March. It might have been --
10 Q You were not involved until August?
11 A Yes.
12 Q If I tell you there is evidence in the record that
13 the filing was filed in March, March 22nd, 1994, then this
14 was paid while they were in bankruptcy?
15 A If it was filed on that date, this was
16 post-bankruptcy.
17 Q This is an occasion where Mr. Gordon was paying money
18 to a company that was in bankruptcy out of his own pocket;
19 is that right?
20 A That's what it reflects, right.
21 Q Okay.
22 Now, not to re visit this area overly much, but
23 yesterday we were talking about some transfers among
24 different companies that were affiliated with each other;
25 is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1488
Ackerman-cross/Trabulus

1 A Yes.
2 Q And sometimes -- not talking about this case -- but
3 sometimes in bankruptcy proceedings, people claim -- not
4 the bankrupt company, but creditors may claim -- that
5 before the bankruptcy was filed the debtor company
6 transferred assets away to make them less reachable by
7 creditors; is that correct?
8 A Yes.
9 Q That's a common claim?
10 A Yes.
11 Q Now, in this particular case, is it not correct --
12 withdrawn.
13 Now, the different entities that we are talking
14 about in terms of transfers, that would include Sterling;
15 is that correct?

16 A Yes, to the best of my recollection.
17 Q And was it not correct that shortly before the
18 bankruptcy was filed in this case, Sterling repaid over
19 $580,000 it had borrowed from Who's Who?
20 A I don't remember.
21 Q Okay.
22 MR. TRABULUS: Bear with me a moment.
23 THE COURT: Yes.
24 (Whereupon, at this time there was a pause in the
25 proceedings.)

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1489
Ackerman-cross/Trabulus

1 MR. TRABULUS: May I have 641?
2 (Counsel confer.)
3 (Handed to the witness.)
4 Q Now, Mr. Ackerman, 641, you have seen that before,
5 haven't you?
6 A Yes, it is my letter.
7 Q It is a letter you wrote; is that right?
8 A Yes.
9 Q You wrote it on September 18th, 1994; is that
10 correct?
11 A Yes.
12 Q That's a letter you wrote to answer those la st
13 interrogatories, the ones that hadn't been answered yet
14 relating to, you know, the different purposes of the
15 business loans and transactions, right?
16 A Yes.
17 Q Now, take a look at page 3, paragraph four at the
18 bottom.
19 A Yes.
20 Q I will read it to you.
21 It says, 4. Sterling Who's Who, up to a total of
22 1.652 million loaned to this entity, 1.25 million under
23 long term note annexed hereto, and the remainder as
24 short-term loan. Then in bold, $583,493 of this debt was
25 repaid in March of 1994, just before the bankruptcy

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1490
Ackerman-cross/Trabulus

1 filing, such that the total due was reduced to 1.105
2 million.
3 Does that refresh your recollection that right
4 before the bankruptcy filing Sterling actually paid back
5 over $580, 000 of money to Who's Who, who was about to file
6 for bankruptcy?
7 A Yes.
8 Q And this was something you didn't just put in that
9 letter, but you also put it into something that was filed
10 in the bankruptcy court, and I am looking for the
11 exhibit. Exhibit 633.
12 MR. TRABULUS: May I have that, please?
13 (Counsel confer.)
14 MR. TRABULUS: Thank you.
15 Q Mr. Ackerman, 633 is a portion of a response that you
16 put into the bankruptcy court; is that correct? And you
17 signed it?
18 A It is pages 1, 19, 20 and 21.
19 Q Right. It is a portion of it.
20 A Yes.
21 Q And on page 19, you once again referred to the fact
22 that Sterling had just paid back the money right before
23 the bankruptcy, 580,000 of its debt?
24 A Yes, in bold face.
25 Q Now, I believe yesterday you testified that you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1491
Ackerman-cross/Trabulus

1 didn't recall whether or not Mr. Gordon paid rent to PVI;
2 do you recall that?
3 A Yes.
4 Q PVI was the company that owned the condominium in
5 Manhasset; is that correct?
6 A Yes.
7 Q And you were read some testimony yesterday that
8 Mr. Gordon gave about the time that he spent there; is
9 that correct?
10 A I believe so.
11 Q And I called your attention to the fact that there
12 was a deposition in April of '94, where he gave that as
13 his residence address; is that correct?
14 A You told me that, yes.
15 Q Right.
16 Now, I think you said that you couldn't recall
17 one way or another, right, that he paid rent? Or you
18 didn't know it. I forget?
19 A I believe I said that he had stayed there sometimes,
20 that was the arrangement.
21 MR. TRABULUS: May I have 759 and 770?
22 (Documents handed to Mr. Trabulus.)
23 MR. TRABULUS: Your Honor, by stipulation, 759
24 and 770 may go in evidence. Is that correct, Mr. White?
25 MR. WHITE: Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1492
Ackerman-cross/Trabulus

1 THE COURT: Government's Exhibit , 759 and 770 in
2 evidence.
3 What are they?
4 MR. TRABULUS: A group of checks drawn on the
5 account of Bruce Gordon from National Westminster Bank.
6 759. 770 is also a group of checks drawn on the account
7 of Bruce Gordon held at Sterling National Bank. .
8 THE COURT: In evidence.
9 (Government's Exhibit 759 received in evidence.)
10 (Government's Exhibit 779 received in evidence.)
11 MR. TRABULUS: Your Honor, I will state that
12 there is a break in the sequence of some of the checks.
13 Therefore, it doe sn't necessarily appear that all the
14 checks from the accounts are in there. It is a
15 selection.
16 MR. WHITE: To clarify for the record, 759 is 43
17 checks from Mr. Gordon's personal bank account at NatWest,
18 covering the period of 1993 and 1994. 770 are 63 checks
19 from Mr. Gordon's personal bank account at Sterling
20 National Bank from 1994.
21 Q You are ahead of me, Mr. Ackerman. Which set are you
22 going through?
23 A I am going through number 759.
24 Q Good. That's the one where I want to start. I will
25 not ask about each and every check. I don't know if they

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1493
Ackerman-cross/Trabulus

1 are in the same order in which I have them here. But I
2 would like you to look at check 109, if you got it.
3 A I have it.
4 Q Okay.
5 Is that a check for $2,000 to Publishing
6 Ventures?
7 A Yes, it is.
8 Q It is dated March 1st, 1993?
9 A Yes.
10 Q That's from Mr. Gordon?
11 A Bruce Gordon's account.
12 Q Right.
13 Do you know Bruce Gordon's signature?
14 A I don't remember it as well as I used to.
15 Q Very well, it is from his account.
16 The next one, check 115.
17 A Okay, yes.
18 Q Also to Publishing Ventures for $2,000?
19 A Yes.
20 Q Next month, April 1st, '93?
21 A Yes.
22 Q It says rent?
23 A Yes, 4/93 I think I can read it. Rent.
24 Q On my copy it is -- thank you.
25 Check 124.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1494
Ackerman-cross/Trabulus

1 A Have it.
2 Q Same thing?
3 A 4/30/93 is the date of the check.
4 Q Rent?
5 A It says the word rent.
6 Q $2,000?
7 A Yes.

8 Q Publishing Ventures the payee?
9 A Publishing Ventures, Inc.
10 Q Now, we don't have any checks in this set until
11 November; is that correct? Late November?
12 A There is a check in late November, 11/30/93, 182.
13 Q Also a rent check for $2,000?
14 A Yes.
15 Q There are no checks at all in that set of checks
16 between April and November; is that fair to say?
17 A I believe so.
18 Q Not to anybody?
19 A I don't know if it is to anybody, but I don't see any
20 to Publishing Ventures.
21 Q Just check to see if there are any in November, or
22 any checks, rather, in the intervening months on that
23 subject.
24 A They jump from 4/30/93 to 11/93.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1495
Ackerman-cross/Trabulus

1 Now look at check 191.
2 A I have that before me.

3 Q That's has 1994 check?
4 A Yes, it is.
5 Q January 11th, 1994?
6 A Yes, it is.
7 Q That's for rent?
8 A Yes, it is.
9 Q To Publishing Ventures?
10 A Yes, it is.
11 Q The rent went up?
12 A It is listed as being $2,500.
13 Q That's $500 more than the other one?
14 A Yes, it is.
15 MR. TRABULUS: May I have 757?
16 (Counsel confer.)
17 MR. TRABULUS: Your Honor, I would offer by
18 stipulation, it will be a Government's Exhibit, 757, which
19 consists of bank statements for the personal account of
20 Bruce Gordon at National Westminster Bank USA covering a
21 period, and perhaps all of 1993. It is very hard to read
22 some of the dates on this.
23 THE COURT: Any objection?
24 MR. WHITE: No, your Honor.
25 THE COURT: Government's Exhibit 757 in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPOR TER
1496
Ackerman-cross/Trabulus

1 evidence.
2 (Government's Exhibit 757 received in evidence.)
3 (Handed to the witness.)
4 Q Mr. Ackerman, just take a look at some of the months
5 in there if you can read them. I know it is hard to read,
6 some of the months for which we don't have checks, such as
7 June, July, August, May, and tell me if you see in each of
8 those months an indication that -- if the check, if a
9 check was written for the amount of $2,000?
10 A On 4/2/94 -- '93, excuse me, I see a check for
11 $2,000.
12 THE COURT: You don't have to give us the dates.
13 Q As to whether it is May or June, I want to establish
14 if there are any other $2,000 payments during 1993?
15 A One in May, two in June, another in June, something
16 in August, and in 9 -- September, I see one.
17 Q How about October?
18 A 10/5.
19 Q November?
20 A I see one in November.
21 Q Okay.
22 That's enough of that.
23 Take a look at 770.
24 A Yes.
25 Q Now, on 770, take a look at check 122.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1497
Ackerman-cross/Trabulus

1 A I have it.
2 Q A check for $12,500; is that correct?
3 A Yes.
4 Q That's for rent from February of '94 to June of '94,
5 right?
6 A It is so marked.
7 Q To Publishing Ventures?
8 A Yes.
9 Q And also check 136, that's in July?
10 A Yes.
11 Q Also $2,500?
12 A Yes.
13 Q This would indicate that there was a period --
14 withdrawn.
15 I think yesterday we had some testimony
16 concerning the penthouse apartment in New York City; is
17 that correct?
18 A Yes.
19 Q And about some correspondence that you had from

20 Mr. Gordon in 1996 -- in February of 1996, relating to
21 that. Do you recall that?
22 A Yes.
23 Q And an adversary proceeding after that?
24 A Yes.
25 Q By another law firm.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1498
Ackerman-cross/Trabulus

1 Now, in July of 1995, if you recall, what
2 happened to the premises that Who's Who had had in Lake
3 Success?
4 A I don't recall.
5 Q Did there come a point in time when the lease was
6 disavowed?
7 A Rejected?
8 Q Rejected.
9 A Perhaps by the trustee, yes.
10 Q Do you recall whether in July of 1995 the lease was
11 rejected?
12 A No, I don't recall.
13 Q Do you recall after the lease was rejected such
14 operations as there still were, were all shifted to
15 Manhattan?
16 A I didn't think any operations were going forward on

17 those premises then.
18 Q With regard to Sterling's operations.
19 A I don't think anything was happening at Lake Success.
20 Q Sterling was not in bankruptcy, was it?
21 A No, it wasn't.
22 Q After the trustee was appointed, the trustee was in
23 charge of any business operations at Who's Who; is that
24 correct?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1499
Ackerman-cross/Trabulus

1 Q And the management of Sterling still remained the
2 management of Sterling; is that correct?
3 A Yes, sure.
4 Q And was it your understanding that there was a period
5 of time when Sterling -- some operations of Sterling may
6 have been performed for it at Lake Success?
7 A I wouldn't have been surprised.
8 Q Okay.
9 And, in fact, at one point there was an
10 indication that Who's Who had been hopi ng to get
11 management fees from Sterling; is that correct?
12 A I don't recall that.
13 Q Okay.
14 In any event, did you become aware that at some
15 point after the lease was rejected in Lake Success that
16 Mr. Gordon was working in the City?
17 A I believed that he was working from the City once
18 Who's Who was closed.
19 Q When he was working from the City, is it your
20 understanding that that's when he was starting to do more
21 work at the penthouse?
22 A It is quite possible.
23 Q Now, is it correct that it was one of the least
24 important things to you in the bankruptcy proceeding who
25 owned the stock of Who's Who?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1500
Ackerman-cross/Trabulus

1 A It is not important in a Chapter 11 case.
2 Q In fact, it doesn't really affect the Chapter 11 case

3 in a typical situation?
4 A It depends on whether it is a closed corporation. If
5 it is very small it can affect.
6 Q In this case, did it affect it in any way?
7 A Not really.
8 Q Now, did you have discussions with Mr. Gordon --
9 withdrawn.
10 One of the exhibits there, and I think it is
11 either 633, also 641, I think you were asked about both of
12 them yesterday. And I think in both of them you
13 described -- you wrote something about the loans, and how
14 it was anticipated that it would be a wash, okay?
15 A Yes.
16 Q Now, at any point in time, and particularly before
17 that, had you discussed with Mr. Gordon whether it would
18 be possible for him to take his back salary from the
19 corporation in the bankruptcy proceeding, and use it to
20 pay back the loan?
21 A Use it to pay back the loan?
22 Q Right. Either to pay credit on the loan, even if no
23 money changed hands, or actually draw money, pay taxes on
24 it and use that to pay on the loan. Did you discuss if
25 that would be possible during the bankruptcy proceeding?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1501
Ackerman-cross/Trabulus

1 A I don't recall such a discussion.
2 Q In the context of a bankruptcy proceeding, a Chapter
3 11, Mr. Gordon was allowed to take salary for work he was
4 doing after the filing of the petition; is that correct?
5 A Yes.
6 Q That's called a post-petition expense of the debtor;
7 is that correct?
8 A Yes.
9 Q Now, anything relating to monies that might have been
10 owed from before the filing, that would be called a
11 pre-petition debt; is that right?
12 A Yes.
13 Q And monies cannot be paid on a pre-petition debt,
14 except in the context of the reorganization of the
15 liquidation; is that right?
16 A Or otherwise by court order.
17 Q By court order; is that correct?
18 A Yes.
19 Q And so, once the bankruptcy was filed, Mr. Gordon, or
20 anybody there, would not have been free to pay him any
21 back salary, by simply writing him a check or crediting it
22 against the --
23 A Not without a court order or in writing.
24 Q But if they did one of those things it could have
25 happened; is that right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1502
Ackerman-cross/Trabulus

1 A Yes.
2 Q And did they have any discussions with Mr. Gordon
3 concerning what the original plans would have been before
4 the bankruptcy -- withdrawn.
5 In your conversations with Mr. Gordon, did
6 Mr. Gordon explain to you that -- some of the consequences
7 that the bankr uptcy had -- withdrawn.
8 Did you discuss with Mr. Gordon the effect of the
9 Reed judgment on the business of Who's Who?
10 A Yes.
11 Q Did he discuss with you among other things, Who's Who
12 had to change the cover of its book?
13 A There were certain things that were required under
14 the state court judgment, certain changes required, and he
15 was acting to them.
16 THE COURT: I don't think it was a state court.
17 You mean the federal court?
18 THE WITNESS: Forgive me.
19 MR. TRABULUS: That was my question.
20 Q Did he explain to you one of the things he had to do
21 was simply to change the cover of the book to do what was
22 decided with respect to trademark infringement?
23 A I don't recall specifics, I am sorry.
24 Q Did he explain to you as a result of changing the
25 cover of the book, the delivery of the book would be

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1503
Ackerman-cross/Trabulus

1 delayed? Do you recall that?
2 A I don't recall that.
3 Q Do you recall him telling you as a result of the
4 delay fewer members were making payments for that book?
5 A I recall talking about the harm the bankruptcy was
6 doing. I don't recall the specific statement that you are
7 making.
8 Q Okay.
9 And do you recall him saying, or anyone, whether
10 it be him or someone else in the company, telling you that
11 as a result of having to change the cover on the book, it
12 was both an expense in terms of changing the cover, and
13 also a delay?
14 A I don't recall at this point.
15 Q Did he explain to you as a result of the bankruptcy
16 that the company was suffering economic harm quite apart
17 from any prospect of having to pay any money judgment to

18 Reed?
19 A Oh, yes.
20 Q Okay.
21 Now, did it ever come up in any discussion with
22 him, with Mr. Gordon or with anybody else there what the
23 plans had been with respect to the loans if that harm had
24 not been incurred, and if the bankruptcy had not had to be
25 filed?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1504
Ackerman-cross/Trabulus

1 A The intent on the loans?
2 Q Let me rephrase it.
3 Did Mr. Gordon tell you in so many words, the
4 company was doing very well before the Reed judgment?
5 A Oh, yes.
6 Q Did he ever tell you that he was intending at a
7 certain point in 1994 or 1995, to credit monies against
8 the loans, pay the taxes and basically wipe out the loans?
9 A Not that I recall.
10 Q Did he tell you that he understood he had to pay back
11 the loans, otherwise they really w eren't loans?
12 A No.
13 Q Did he tell you that he was hoping to repay the
14 loans, but the bankruptcy and the judgment prevented that
15 from happening? Do you recall that?
16 A Not that I recall.
17 Q Did that subject even come up?
18 A No, not that I recall.
19 Q Let me ask you this: You were familiar with the
20 raid, the execution of the search warrant and seizure by
21 the government on March 30th, 1995?
22 A Yes, I am.
23 Q And it was only after that a trustee was appointed;
24 is that correct?
25 A It was a month or two after that, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1505
Ackerman-cross/Trabulus

1 Q Before that Reed had tried on several occasions
2 office a trustee appointed and it was not successful; is
3 that correct?
4 A That is correct.
5 Q Now, is there something in t he bankruptcy code
6 relating to reorganization called a cram-down provision?
7 THE COURT: How do you spell that?
8 MR. TRABULUS: C R A M D O W N:
9 A Yes.
10 Q And is a cram-down provision one that permits the
11 Court to impose a reorganization even over the objection
12 of a creditor or creditors?
13 A Yes, providing it complies with certain conditions.
14 Q Now, Reed was always objecting to any reorganization,
15 even a 100 percent plan; is that correct?
16 A Yes. From the time I came into the case, we were
17 always proposing 100 percent, and they continued to
18 object.
19 Q And from the point before the raid, had there been
20 any discussions in the bankruptcy concerning applying the
21 cram-down provision to require Reed to accept such a plan
22 even against its will?
23 A Yes, and there was a second wave, possibly, to.
24 Q Tell me what was discussed. With whom. Were these
25 the lawyers on the other side?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1506
Ackerman-cross/Trabulus

1 MR. WHITE: Objection.
2 THE COURT: To the lawyers --
3 MR. WHITE: The whole line of the subject.
4 THE COURT: With regard to what?
5 MR. WHITE: Relevance. I don't know if you want
6 to hear it during the break or now?
7 THE COURT: We may as well hear it now.
8 Members of the jury, we will take a ten-minute
9 recess. Please do not discuss the case and keep an open
10 mind. Please recess the jury.
11 (Whereupon, at this time the jury left the
12 courtroom.)
13 THE COURT: Yes, Mr. White.
14 MR. WHITE: My objection is the conduct of the
15 bankruptcy proceeding after say, October of 1995, the time
16 period in the indictment where Mr. Gordon and Mr. Reffsin
17 allegedly tried to obstruct the proceeding, is not
18 relevant. It doesn't bear on the intent in any way. The
19 theme seems to be that Reed were the bad guys and they
20 were trying to destroy Mr. Gordon --
21 THE COURT: Hold it a minute.
22 Do you want to step out, Mr. Ackerman, please?
23 THE WITNESS: Yes.
24 (The witness exits the courtroom.)
25 MR. WHITE: Your Honor, the theme appears to be

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1507
1 that Reed is the bad guy and they are trying to destroy
2 Mr. Gordon. That's nice, but it is not a defense to
3 obstructing to proceeding. Whether or not Reed had an
4 ulterior motive doesn't require as to whether there was a
5 court order to keeping the log. I didn't object with
6 respect to Mr. Skalka, because it was appropriate, he was
7 a representative of Reed. He was a litigation a dversary
8 of Mr. Gordon.
9 Mr. Ackerman was Mr. Gordon's company's lawyer.
10 This has nothing to do with the conduct of the bankruptcy
11 proceeding as it relates to whether or not they obstructed
12 them.
13 MR. TRABULUS: It is relevant now, your Honor,
14 for the same reason it was relevant when it was gone into
15 with Mr. Skalka. Mr. White called Mr. Skalka as a
16 witness. His bias can be established by not merely
17 questioning Mr. Skalka, but also questioning this
18 witness. It is perfectly relevant. The area was gone
19 into before. And I have another witness I wish to
20 question about it. It is not a major air of questioning.
21 THE COURT: I will allow it. Overruled.
22 We will take a ten-minute recess.
23
24 (Whereupon, a recess is taken.)
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1508

1 THE CLERK: Jury entering.
2 (Whereupon, the jury at this time entered the
3 courtroom.)
4 THE COURT: Please be seated, members of the
5 jury.
6 You may proceed.
7 MR. TRABULUS: Thank you, your Honor.
8 With the Court's permission, may the reporter
9 re-read the pending questions.
10 THE COURT: Yes.
11 (Whereupon, the court reporter reads the
12 requested material.)
13 MR. TRABULUS: I will proceed another discussion
14 along the same lines.
15 Q Mr. Ackerman, were these discussions with the lawyers
16 for Reed?
17 A We definitely had discussions with Reed.
18 Q In those discussions did you tell them that you were
19 going to seek to apply the cram-down provision?
20 A It would have stood to reason that I did.
21 Q And you say that there was another way, what was
22 that?
23 A The second way was that the subject had not been
24 upheld, therefore they didn't have a definitely legitimate
25 debt.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1509
1 Q Now, did you bring up the possibility of the
2 cram-down proceeding with the Court itself, the bankruptcy
3 court?
4 A I don't recall.
5 Q And that was something which was definitely within
6 the air before the raid; is that correct, the prospect of
7 seeking to use the cram-down provision?
8 A Yes.
9 Q Now, are you familiar with an auction that was held
10 at the penthouse apartment in New York City?
11 A No.
12 Q Are you familiar with what happened to various
13 property that had -- that was seized by the trustee?
14 A I don't think Bruce got it back.
15 Q Are you aware that it was sold off for the bankrupt
16 estate?
17 A You are telling me, yes.

18 Q Are you aware that some of the very same items which
19 the government is contending here were improperly
20 purchased by Bruce for himself, were sold off by the
21 bankruptcy trustee for the bankruptcy estate?
22 A Not until you told me.
23 Q You yourself serve as a bankruptcy trustee, do you
24 not?
25 A Yes, I do.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1510
1 Q And you get appointed by the bankruptcy court to
2 serve as a trustee; is that correct?
3 A I am selected by the United States Trustee's office.
4 Q I am sorry, the U.S. trustee's office will pick you
5 to be a trustee in bankruptcy cases?
6 A I am put on the panel --
7 Q Chapter 11 and Chapter 7 cases both?
8 A Yes.
9 Q And this is a somewhat delicate situation for you
10 right here, isn't it?
11 A Yes, it is.
12 Q There is an accusation that there was false documents
13 submitted in a bankruptcy case in which you were
14 representing a party that supposedly submitted those; is
15 that correct?
16 A I did not know of that.
17 Q I mean, are you aware that there was an accusation
18 that the logs were false?
19 A I heard some scuttlebutt about that in the last day
20 or two.
21 Q And those logs were submitted through your firm; is
22 that correct?
23 A They were sent to --
24 Q The other side?
25 A Yes, to the other side, through my firm.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1511
1 Q And that makes this a kind of delicate situation,
2 does it not?
3 A That's not what makes it delicate to me.
4 Q What makes it delicate to you is you are testifying
5 possibly against a former client?
6 A He was not my client. He was the principal of my
7 client.
8 Q Are you aware that Who's Who itself is on trial?
9 Who's Who itself --
10 A I know of the case as being United States against
11 Gordon et al. Is Who's Who on trial?
12 Q Yes, it is also on trial.
13 A Okay.
14 Q While you were representing Who's Who did you tell
15 Mr. Gordon yourself that Reed was engaged in a witch
16 hunt?
17 MR. WHITE: Objection to his view, your Honor.
18 THE COURT: Sustained.
19 MR. TRABULUS: No further questions.
20 THE COURT: Mr. Jenks.
21 MR. JENKS: No questions, your Honor.
22 THE COURT: Anybody else?
23
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1512
Ackerman-cross/Wallenstein

1 CROSS-EXAMINATION
2 BY MR. WALLENSTEIN:
3 Q Good morning, Mr. Ackerman.
4 A Good morning, sir.

5 Q My name is John Wallenstein, and I represent Martin
6 Reffsin.
7 A Yes, sir.
8 Q Mr. Ackerman, you testified you have been in practice
9 since 1981; is that correct?
10 A I graduated in 1981. I wasn't admitted to the bar
11 until '82, I was clerking for Judge Goetz, at that time.
12 THE COURT: Goetz, G O E T Z?
13 THE WITNESS: Yes.
14 Q You have been practicing bankruptcy during that time?
15 A I have been trying to branch away, but primarily
16 bankruptcy law during the 18 years.
17 Q You testified that during this matter you were the
18 lead bankruptcy counsel; is that right?
19 A Yes.
20 Q Tell us what that means?
21 A I was the one in charge, strategizing. The others
22 were my associates.
23 Q And you were -- you also indicated you were the head
24 of the bankruptcy department at Rivkin Radler and Kremer?
25 A Yes, I w as.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1513
Ackerman-cross/Wallenstein

1 Q How many attorneys was there at Rivkin Radler and
2 Kremer during that time period?
3 A It varied, but certainly to the best of my recall
4 between 150 to 200.
5 Q How many attorneys were in the bankruptcy department
6 that you headed?
7 A We had a strange bankruptcy departments. But at its
8 highest, including everybody who could be set to have been
9 in it, formally, directly in it, it would have been four.
10 And then there were certain other people, certainly toward
11 the end of 1994, who were assigned basically permanently
12 to me.
13 Q How long were you with Rivkin Radler?
14 A I was with Rivkin Radler from 10 of '92, to 1 --
15 that's January -- of 1995.
16 Q Then you left and went to Meltzer Lippe?
17 A Yes.
18 Q And you took this case with you?
19 A Yes, I did.
20 Q Now, during the time, and we are going to talk about
21 August and September of 1994.
22 During that time period you were the head of the
23 bankruptcy department and you were if lead counsel on this
24 case and in charge of this case as far as anybody was
25 concerned?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1514
Ackerman-cross/Wallenstein

1 A I was in charge of the bankruptcy department in the
2 case. Josh Kardisch was doing the adversary proceeding
3 complaint against Reed. I would speak to him about it,
4 but I was not in charge of it. And since Josh had --
5 Q Is there a question?
6 A Sorry.
7 Q Now, did you have, with respect to the associates,
8 were they responsible to report to you as to what they
9 were doing with respect to the bankruptcy portion of t his
10 case?
11 A Yes.
12 Q And that would be Gerard, we have agreed to call him
13 Gerard?
14 A Gerard.
15 Q Is that correct?
16 Also, Richard Weber; is that right?
17 A Yes.
18 Q And there was a third associate, I believe, James
19 someone?
20 A James Weller, was a person in litigation, who was
21 beginning to work with me a lot. But I think from looking
22 at his time slips, that they in this case pertained to
23 Josh's end of the case.
24 Q And Mr. Kardisch, who was handling the litigation
25 aspect would also coordinate with you; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1515
Ackerman-cross/Wallenstein

1 A To some extent, yes.
2 Q Were you equal, you and Mr. Kardisch, or was one of
3 you in overall charge?
4 A I did not deal with his end of the case that much. I

5 would speak to him about it from time to time.
6 Q If the senior management committee, however the firm
7 was set up, would want a report on the Who's Who matter,
8 would they look to you and Mr. Kardisch for separate
9 reports, or to one of you for a single report for what had
10 happened?
11 A Given the conduct of the firm at the time, they would
12 have looked I am sure to me, but if they talked about the
13 adversary complaint, they would have looked to Josh.
14 Q Essentially you were the partner who had overall
15 responsibility for the entire matter; is that a fair
16 statement?
17 A I don't think it would be.
18 Q All right.
19 Now, you, with respect to the bankruptcy end
20 now --
21 A Yes.
22 Q You were the one who made all the court appearances?
23 A Except for possible adjournments, I was there
24 definitely at every im portant court hearing.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1516
Ackerman-cross/Wallenstein

1 And you were the one who strategized, you said?
2 A Yes.
3 Q And would that mean that you were the one who decided
4 what points to argue, what direction the case was going to
5 take, and basically guided the case to get there?
6 A Yes.
7 Q And would it be fair to say that as the partner in
8 charge of the bankruptcy end of this case, it was your
9 responsibility to coordinate the efforts on all the
10 attorneys working on the matter as well as outside
11 professionals?
12 A All attorneys working on the matter, as well as
13 bankruptcy professionals.
14 Q Bankruptcy professionals would include accountants;
15 is that correct?
16 A Yes.
17 Q That would include Mr. Reffsin; is that true?

18 A Yes.
19 Q Did you ever have a discussion with Bruce Gordon,
20 Maria Gaspar, anybody else, indicating that Mr. Reffsin
21 was an employee of Who's Who, rather than an outside
22 professional?
23 A I never believed Mr. Reffsin to be an employee of
24 Who's Who.
25 Q It was your understanding he was an outside

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1517
Ackerman-cross/Wallenstein

1 professional, a C.P.A. with his own firm; is that correct?
2 A Yes.
3 Q And in fact, he was retained by Who's Who and the
4 bankruptcy court in effect appointed him; is that correct?
5 A They authorized his appointment, yes.
6 Q And by authorizing his appointment, the bankruptcy
7 court was saying this is an outside professional that can
8 be paid from the estate of the debtor; is that correct?
9 A Yes, and that he was disinterested, s uch as that he
10 was authorized to be approved.
11 Q And by disinterested, what do you mean?
12 A It means he was not representing any creditor, he did
13 not have such close affiliations with a debtor that would
14 render him to have adverse interest. He was an outside
15 person.
16 Q So, he would not have any interest in any creditor or
17 such an interest in the debtor that would compromise his
18 professional objectivity; is that correct?
19 A The Court would have to make that finding in order to
20 authorize his approval, his employment.
21 Q Judge Eisenberg in fact made such a finding; is that
22 correct?
23 A In that order that she entered, yes.
24 Q Now, would it be fair to say, by the way, that you as
25 lead counsel would be the point man, so to speak, in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1518
Ackerman-cro ss/Wallenstein

1 contact with the client and coordination with the client
2 and any principals or employees who were necessary to be
3 spoken with?
4 A I would delegate that a lot. A lot of times what I
5 would do would be you talk to him, get the facts, verify
6 all the facts, and then come to me, and I will edit
7 things.
8 Q But ultimately it was your decision as to whether to
9 delegate or not?
10 A Absolutely.
11 Q And when your associates came back to you and said,
12 Neil, this is what we found, you would take responsibility
13 for that finding, correct?
14 A It would be my letter, yes.
15 Q It would be your letter, your pleading, your motion,
16 anything like that?
17 A Yes.
18 Q Is that correct?
19 A I might be, write assisted by, but it would be always
20 my signing.
21 Q Okay.
22 This was a Chapter 11 bankruptcy?
23 A Yes.
24 Q And that means that there was a reorganization that
25 was going to permit Who's Who Worldwide to continue to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1519
Ackerman-cross/Wallenstein

1 operate and get out from under its creditors; is that
2 correct?
3 A That is what we were fervently hoping, yes.
4 Q Is it fair to say that the role of counsel,
5 specifically debtor's counsel, which you were in this
6 case, would be to advance the interests of the debtor?
7 A And I also in such capacity was a fiduciary for the
8 creditors of the case.
9 Q Well, isn't the trustee a fiduciary?
10 A Well, in a Chapter 11 case the debtor is allowed to
11 remain in charge of the case unless there is a trustee
12 appointed. And when a debtor is in Chapter 11 it operates
13 as a fiduciary to creditors. It is calle d the debtor in
14 possession. It is allowed to remain in charge subject to
15 certain constraints. It has to file monthly financial
16 statements, etcetera. I as the attorney for this debtor
17 in possession would have fiduciary duties to creditors as
18 well.
19 Q So your fiduciary duties to the creditors would be
20 what?
21 A To insure what was going on was in the interest of
22 creditors, and to insure that the bankruptcy demands and
23 dictates, and mandates are complied with.
24 Q Okay.
25 During a course -- I am talking about August and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1520
Ackerman-cross/Wallenstein

1 September now of 1994, just to narrow your recollection.
2 A Yes.
3 Q During that time period how many times did you meet
4 with Martin Reffsin?
5 A Off the top of my head?
6 Q The offic e would be a better place.
7 A I would remember one time we met at the debtor's
8 premises. We probably met three to five times.
9 Q Okay.
10 A To the best of my recall.
11 Q How many of those meetings was Bruce Gordon present
12 at?
13 A I think all or practically all.
14 Q During the course of this period you had a number of
15 telephone conversations with Mr. Reffsin as well; is that
16 correct?
17 A Yes. Did you ever have a conversation with
18 Mr. Reffsin with respect to the logs. I think I may have
19 had one conversation with him with respect to the logs.
20 Q Do you know when that conversation took place?
21 A During that general period. Certainly, I would think
22 in September.
23 Q Okay.
24 Now, let me get back to the logs in a little
25 bit.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1521
Ackerman-cross/Wallenstein

1 You indicated that you learned about Mr. Gordon's
2 problems with the Internal Revenue Service in a
3 conversation with Mr. Gordon?
4 A Yes.
5 Q Do you know when and where that conversation took
6 place?
7 A We were becoming much friendlier, so I would think it
8 was toward the end of September, perhaps toward October,
9 November.
10 Q So, it was not then during this particular period,
11 between August and the end of September that you learned
12 of his IRS problems?
13 A Not to the best of my recall.
14 Q Your recollection is you learned of his IRS problems
15 from Mr. Gordon; is that correct?
16 A Yes.
17 Q Do you have any recollection of ever discussing
18 Mr. Gordon's IRS problems with Mr. Reffsin?
19 A No, I did not.
20 Q Did you ever learn the extent of his IRS problems?
21 A No, I did not.
22 Q Did you try to? Did you ask him about it?
23 A No, I did not.
24 Q Okay.
25 Now, there has been some talk here that there

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1522
Ackerman-cross/Wallenstein

1 were loans made to Mr. Gordon; is that correct?
2 A Yes.
3 Q You were aware of this; is that correct?
4 A If you are referring to the letter that was sent to
5 Reed in response to the interrogatory, the loan -- the
6 loans made by Mr. Gordon --
7 Q I am not referring to the letter yet. But at the
8 moment I am referring to the loans themselves. At some
9 point you became aware that Mr. Gordon had claimed to have
10 borrowed money from Who's Who; is that correct?
11 A Yes.
12 Q Okay.
13 Is it fair to say that in that letter -- now we
14 can talk about it, you explained, and I believe we are

15 talking about Exhibit 641 and 641-A, do you have that in
16 front of you?
17 A 641.
18 Q In Exhibit 641, you referred to those loans; is that
19 correct?
20 A Yes.
21 Q In fact, I believe that yesterday you testified
22 about -- you put the word "loans" in quotes; is that
23 correct?
24 A The word "loans" are in quotes.
25 Q Why did you do that?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1523
Ackerman-cross/Wallenstein

1 A To the best of my recollection, because the context
2 was that they were alleging, they being Reed, they were
3 alleging in the context of the motion to appoint a trustee
4 in the case, that the debtor was being -- was not doing
5 his duties by suing to recover these monies. And the
6 statement was that these were not, quote, loans, really.
7 Q That was Reed's position?
8 A No . That was the position that was being advanced in
9 this letter, that this was nothing to be sued on, and that
10 in fact was a wash.
11 Q Well, there was a watch if there was something to
12 offset the loan; is that correct?
13 A Yes.
14 Q That doesn't necessarily mean that the loan was not a
15 loan, does it?
16 A No, it does not mean that.
17 Q It still could be a legitimate loan and could be
18 repaid by an offset instead of a repayment, is that your
19 understanding?
20 A Yes. A wash is usually that kind of a thing.
21 Q The reason you put loans in quotes is because Reed
22 said they weren't really loans?
23 A No, not at all.
24 Q The reason you put loans in quotes is you were saying
25 they were not really loans?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1524
Ackerman-cross/Wallenstein

1 A Well, in the context of this letter, that's what we
2 were saying, yes, in the response.
3 Q You also put the words "debt" in quotes on several
4 occasions, right?
5 Take a look at page 3, the second full
6 paragraph.
7 A I see the word several times.
8 Q Look at the second paragraph in page 3, and tell me
9 if the word "debt" appears in quotes on two occasions in
10 that paragraph?
11 A In the second full paragraph?
12 Q In the second full paragraph.
13 A Forgive me, the second full paragraph, yes, I see the
14 words debt of, yes, in quotes, yes.
15 Q Why did you put that in quotes?
16 A Because that was our response, that this was not
17 something that Who's Who should be suing Mr. Gordon on.
18 Q So, you are saying it is not a real debt?
19 A I was saying that this was not something that this
20 debtor in possession, Who's Who, should be suing
21 Mr. Gordon on.
22 Q Was it not Mr. Gordon's position that these were in
23 fact loans to him?
24 A I don't think it was explained to me. I believe it
25 was explained to me that -- yes, the first full paragraph

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1525
Ackerman-cross/Wallenstein

1 of the third page, it is stated that --
2 Q I didn't ask you what was in the paragraph. I asked
3 you whether or not it was Mr. Gordon's position that these
4 monies were in fact loans to him that he intended to
5 repay? Is that a fact?
6 A That was not the way it was explained to me.
7 Q That was not his position?
8 A It was not the way it was explained to me --
9 Q Did he ever advance that position to you?
10 A Not that I recall.
11 Q Were in fact these monies carried on the books of the
12 corporation as loans?
13 A I wouldn't have the slightest idea.
14 Q Did you ever look at the books?
15 A No, it was left for my accountant. I am an
16 attorney. I don't look at the books. It was left to the
17 accountant, the professional in the case.
18 Q That was Mr. Reffsin?
19 A Yes.
20 Q Any other accountants used in this case?
21 A There could have been internal.
22 Q Were there?
23 A I believe that Maria Gaspar was either an internal or
24 an accountant.
25 Q You relied on Maria Gaspar, the employee of Who's

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1526
Ackerman-cross/Wallenstein

1 Who, and Mr. Gaspar, the professional, and you didn't
2 bring anybody else in; is that correct?
3 A I wouldn't bring people in unless I felt there was a
4 reason to question him, and then I would have to ask the
5 client.
6 Q You had no rea son to question Mr. Reffsin's judgment
7 or veracity, did you?
8 A No.
9 Q Now, you never examined the books of the
10 corporation. What other documents did you examine with
11 respect to the corporation of Who's Who during this time
12 period?
13 A There was a lot of legal documents coming in. I
14 examined him. Bruce would sometimes send me copies of the
15 magazines or books that were being published. I would
16 look at them. I got a lot of letters. I would look at
17 them and respond to them.
18 Q So, would it be fair to say then, that the documents
19 you reviewed and relied upon were coming primarily from
20 the debtor, Who's Who?
21 A Or from other attorneys or from the Court, or from
22 the U.S. Trustee's office. I would look at monthly
23 financial statements which I guess came from the
24 accountant. But I don't look behind them unless ther e is
25 a reason to look behind them.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1527
Ackerman-cross/Wallenstein

1 Q What would be a reason to look behind them?
2 A If you look at a monthly financial statement, and
3 this happened in a recent case where I got a monthly
4 financial statement where it was glaring with errors,
5 inconsistencies, and I called up the accountant to say
6 what is going on.
7 Q That was not Mr. Reffsin?
8 A It wasn't this case whatsoever.
9 Q I wanted to make that clear.
10 A Not at all.
11 Q If you examined the statements or documents coming
12 through the -- from the debtor or through the accountant,
13 then you would make a determination that there was a
14 problem here and you would either call in the accountant
15 or call in an internal person such as the controller and
16 question any inconsistencies you found; is that fair? I
17 am not saying you did it in this case, but that would be
18 your procedure if you saw that?
19 A If I did, I would call in the accountant, or if I
20 wasn't satisfied or thought the matter would occur again
21 in the future, I would probably call the principal and say
22 it is time to replace the accountants.
23 Q Now, you would do that as not only the counsel for
24 the debtor in possession, but also as the fiduciary for
25 the creditors; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1528
Ackerman-cross/Wallenstein

1 A Absolutely.
2 Q And in this case you didn't do any of that?
3 A No, I did not.
4 Q Now, when for the first time did the subject of the
5 logs come up in any context?
6 A In the discovery which had been sent out by Reed.
7 Q At what point in time was that?
8 A If I recall correctly, from the stuff I have been
9 looking at over the last few days, I think I looked at
10 that for the first time around August 6th or August 8th,
11 sometime around there.
12 Q Was it before or after -- withdrawn.
13 There was at some point a stipulation entered
14 into in the bankruptcy court with respect to the logs; is
15 that correct?
16 A Yes.
17 Q Was that you who entered into the stipulation or was
18 it Mr. Flaum who preceded you?
19 A No. It was my firm as well as the debtor, as well as
20 the other entity's affiliates, such as Sterling and Who's
21 Who Executive Club. And it was also entered into for the
22 other sides, quote, by the counsel for Reed, and the
23 counsel for the official committee of creditors.
24 Q Now, can you tell us the terms of that stipulation?
25 A I saw it yesterday. As I recal l right now we agreed

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1529
Ackerman-cross/Wallenstein

1 that there would be an adjournment of the trustee motion.
2 We definitely agreed that we would turn over discovery.
3 Q With respect to specifically to the logs, what was it
4 that they were supposed to be?
5 A I believe that it just mentioned the discovery
6 requested in the interrogatories. As to the logs it was
7 supposed to be to the best of my recall, a listing of
8 names, a person who used the premises, there were three
9 premises named, the times and dates they were being used
10 and for what purpose.
11 Q And were they supposed to be maintained
12 contemporaneously or created afterward, weekly, monthly?
13 What was the terms?
14 A It was definitely contemplated that it would be done
15 contemporaneously. It was for a very sh ort period. It
16 was for like a month and a half, or a month and eight
17 days.
18 Q And it was supposed to be kept on a daily basis?
19 A Contemporaneously.
20 Q Was there any discussion between you and anybody
21 else, Reed's counsel or anybody else with respect to how
22 the logs were to be maintained or created in detail?
23 A Just that which I stated.
24 Q Was there any specific format that they were supposed
25 to take?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1530
Ackerman-cross/Wallenstein

1 A I don't recall any conversation, but -- about a
2 specific format.
3 Q Was there any indication as to how they were to be
4 maintained? And by that I mean, were they to be kept at
5 the premises so people could sign in, or was it simply
6 something that people could make a note of later? What
7 was the arrangeme nt that you can recall?
8 A The only arrangement that I can recall is that they
9 were to be done contemporaneously.
10 Q Do you know whether or not any such log were kept
11 prior to the stipulation at the beginning of August?
12 A Not that I know of.
13 Q Did you ever have a discussion with Mr. Gordon with
14 respect to the logs?
15 A Yes, I believe I did.
16 Q He told you he didn't want to do it, right?
17 A Yes.
18 Q Did he tell you why?
19 A Yes, we were giving 100 percent to Reed. He wasn't
20 happy about that, if the judgment was upheld. And he felt
21 given he was willing to do that they shouldn't have to
22 give all this discovery.
23 Q He never said to you I don't want to keep the logs
24 because I am not using the premises for business purposes,
25 did he?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
15 31
Ackerman-cross/Wallenstein

1 A No, he never said that at all.
2 Q So, it was your understanding that the premises were
3 being used for business purposes; is that correct?
4 A I was told they were, yes.
5 Q And your information came from Mr. Gordon and
6 Ms. Gaspar?
7 A I don't know how often I spoke to Ms. Gaspar. It
8 came from Mr. Gordon. I didn't know that they were being
9 used for that purpose. It never occurred to me.
10 Q When you agreed on behalf of Who's Who Worldwide that
11 these logs would be provided, that was in court during a
12 conference? Is that a fair statement?
13 A I believe it was agreed to outside of court. When I
14 first came there it was at a hearing, it was probably in
15 August, August 6th or 8th. They took me outside, and I
16 said I am doing a 100 percent plan guys, your motion is
17 ridiculous. We are going to give 100 percent, which you
18 would be arguing would be gotten if there was a trustee
19 appointed, and you sued, which is what you wanted. And we
20 are giving you this discovery. That's it, no more issues.
21 Q Did you have a conference with Bruce Gordon before
22 you made those representations to the other attorneys?
23 A Oh, absolutely.
24 Q And he agreed to that?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1532
Ackerman-cross/Wallenstein

1 Q He agreed to a 100 percent plan?
2 A Yes.
3 Q He agreed to giving them all the discovery?
4 A I believe so. If you are asking me if I remember
5 that, no. But I believe he did, yes.
6 Q What are you basing that belief on?
7 A Because I basically was saying to Bruce I wouldn't
8 come into the case unless we did things that I believed to
9 be best, and just to disarm this issue, I thought it was a
10 ridiculous issue to fight about.
11 Q All right.
12 Now, let's go back to the logs.
13 After you entered into this agreement that these
14 logs would be provided, and that was about the 6th of
15 August, you say?
16 A I believe it was at a hearing on August 6th.
17 Q When was the next time you had a discussion with
18 anybody with respect to the logs?
19 A Well, on the August 6th date, by the way, it was
20 whatever discovery they want. I didn't really emphasize
21 logs --
22 Q That's nice, Mr. Ackerman. But would you answer my
23 question, please.
24 A I don't think I would have another conversation,
25 except with my associates. I don't think I did until the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1533
Ackerman-cross/Wallenstein

1 end -- certainly the end of August, probab ly early
2 September.
3 Q And when you had that conversation at the end of
4 August, early September, who did you have that
5 conversation with?
6 A To the best of my recall, probably with my
7 associates. I know I had seen that I wrote two letters
8 reminding that the logs were due.
9 Q That would be September 8th, September 14th?
10 A Those are the dates of the letters, yes, that I
11 recall.
12 Q Other than those two letters -- withdrawn.
13 Writing a letter on September 8th with respect to
14 the logs was to remind Who's Who that the logs were due,
15 and that was based on a conversation with your associates?
16 A No. It was based upon that I will put things in the
17 diary. Sometimes at that time it was a written diary.
18 And I would have things highlighted that I should do. And
19 then I would see them and I would go to my secretary and I

20 would dictate letters, 20 letters in a row, do this, do
21 that, do this, do that. That's the best of my recall.
22 Q Your diary contained entries with respect to this
23 matter?
24 A My diary had matters that do. I have always diaried.
25 Q Does your diary for August and September of 1994

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1534
Ackerman-cross/Wallenstein

1 contain entries about this matter, specifically with
2 respect to the logs?
3 A Not that I recall. It would either be Patty or me to
4 diary them, I delegate to my secretary to diary stuff.
5 Q Do you have the diary?
6 A No, I do not. In fact they may well be at Rivkin,
7 Radler and Kremer.
8 MR. WALLENSTEIN: Your Honor, I feel we are
9 entitled to the production of that diary.
10 THE COURT: You are not going to get them now.
11 No one has them. You ma de the statement, and I will
12 consider it.
13 MR. WALLENSTEIN: Thank you.
14 Q Mr. Ackerman, when for the first time did you see the
15 completed logs?
16 A I don't believe I saw them until after the 23rd. I
17 was out sick on the 23rd. And they apparently were faxed
18 to my office on the 23rd.
19 Q Would you take a look, please at
20 Government's Exhibit 633 -- I am sorry.
21 MR. WALLENSTEIN: Bear with me a moment, please.
22 THE COURT: Yes.
23 (Whereupon, at this time there was a pause in the
24 proceedings.)
25 Q 640. Do you have 640 there?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1535
Ackerman-cross/Wallenstein

1 A I don't believe I do. 640-A?
2 Q No, 640.
3 A No, I don't believe I have it.
4 (Mr. Wallenstein confers with Mr. White.)
5 (Handed to the witness.)
6 A Thank you.

7 Q Would you take a look at the exhibit I just handed
8 you, which is Government's Exhibit 640.
9 A Yes.
10 Q And that's a fax cover from you directed to
11 Mr. Bailey, Mr. Kahn and Mr. Skalka; is that correct?
12 A Yes.
13 Q And it contains a letter, a transmittal letter with
14 respect to the logs, is that correct?
15 A Yes.
16 Q Now, when for the first time did you or anyone else
17 in your office see these logs?
18 A There are two different questions there.
19 Q When for the first time did you see the logs?
20 A Definitely not this date. I was not in.
21 Q So, someone else sent this letter over your
22 signature?
23 A It says dictated, but not read.
24 Q You dictated the letter; is that correct?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1536
Ackerman-cross/Wallenstein

1 Q You didn't see it because you were out sick?
2 A I dictated the letter and usually it is read back to
3 me over the phone.
4 Q So, you heard what was going to go out over the fax?
5 A Yes.
6 Q And they are your words and you take responsibility
7 for them. Is that correct?
8 A Yes, I do.
9 Q The fax that came out to Mr. Bailey, Mr. Kahn,
10 Mr. Skalka, included these logs; is that correct?
11 A Yes.
12 Q Now, these logs we are talking about in Exhibit 640
13 are the logs everybody has been talking about in this
14 case; is that right?
15 A The two days I have been here.
16 Q These are the logs that are supposed to be maintained
17 contemporaneously in order to demonstrate the business use
18 of the property so you could show this to the creditors;
19 is that a fair statement?
20 A Who was using it, yes.
21 Q All right.
22 You didn't see them on the 23rd because you were
23 out sick?
24 A Correct.
25 Q Do you have a fax machine at home?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1537
Ackerman-cross/Wallenstein

1 A No, I did not.
2 Q When for the first time then did you see them?
3 A I don't remember.
4 Q You went back to work when after the 23rd?
5 A I can look at my time slips.
6 Q You have time on the 23rd as well, don't you?
7 A Sure, but I generally would know if I was working
8 from home or if I was out sick.
9 Q Okay.
10 A And I would generally note that.
11 Q I will save you the trouble. You did note you were
12 working from home out sick that day.
13 My question is when did you go back? Did you go
14 back the next day, the day after?
15 THE COURT: When did you see the logs -- did you
16 see the logs at a ll?
17 THE WITNESS: I believe I saw the logs.
18 THE COURT: When for the first time approximately
19 did you see them?
20 THE WITNESS: Maybe the next week, the next day.
21 I don't remember, sir.
22 THE COURT: Within a week of the time they were
23 sent out?
24 THE WITNESS: I would think so.
25 MR. WALLENSTEIN: Thank you, your Honor.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1538
Ackerman-cross/Wallenstein

1 Q Now, Mr. Ackerman, do you know how the logs arrived
2 in your office on the 23rd?
3 A It is shown here it came by fax.
4 Q They arrived by fax from Who's Who Worldwide; is that
5 correct?
6 A That's what it shows.
7 Q And you can tell from the fax imprint on the copies
8 we have here, right?
9 A It shows it came in at 2:42 or 2:46 on the 23rd.
10 Q And you recognize that as the imprint o f Rivkin
11 Radler and Kremer's fax machine?
12 A This would be more -- it would have been generated by
13 Who's Who's fax machine, I would think, I think.
14 Q Well, if you look at -- there are two separate
15 imprints on here, is there?
16 A There is one at the top and one at the bottom.
17 Q They are both upside down, which would indicate the
18 fax came through just the other way; is that right? That
19 it came through the machine upside down, which doesn't
20 make any difference?
21 A I guess.
22 Q Would it be fair to say that one of those imprints
23 was your machine, and one of those imprints was Who's Who?
24 A It's possible.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1539
Ackerman-cross/Wallenstein

1 And that same imprint appears on every page of
2 the log; is that right?
3 A Yes.

4 Q And did you have a discussion with anyone on the 23rd
5 with respect to those logs?
6 A I definitely did. Certainly I must have had a
7 discussion that they came in.
8 Q You dictated a letter saying here are the logs
9 created according to the --
10 A Yes.
11 Q Is that right?
12 A Yes.
13 Q And who did you talk to?
14 A As I sit here now, I think I spoke to Gerard.
15 Q Okay.
16 A And then I spoke to Patty, my secretary.
17 Q Okay.
18 Could you look at Exhibit 636, please, and those
19 are your bills. And specifically, page 15, and I would
20 like you to look at the entry for September 23rd, 1994 --
21 I am sorry, page 16, the second part of that entry, about
22 halfway down the paragraph it says: Dictate letter and
23 instruct to send out to Tom Bailey, Bill Kahn and Doug
24 Skalka enclosing docs, D O C S, period, I beli eve it is an
25 abbreviation for document.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1540
Ackerman-cross/Wallenstein

1 A Yes.
2 Q And these are the logs we are talking about?
3 A Yes, I take it.
4 Q Prior to that is there any indication that you spoke
5 to anybody about the logs in that particular entry on the
6 23rd?
7 A No, there is nothing prior to that.
8 Q Okay.
9 And would you look at page 31 of that Exhibit,
10 Exhibit 636.
11 A Yes.
12 Q That's Gerard's time; is that correct?
13 A I believe so.
14 Q It is not yours?
15 A Pardon?
16 Q It is not yours?
17 A I have to go back a few pages.
18 (Whereupon, at this time there was a pause in the
19 proceedings.)
20 Q Go back to page 22, if that will help you. It begins
21 Gerard's time, and it is still continuing on page 31; is
22 that correct?
23 A Yes.
24 Q And there is an entry halfway down the page where he
25 says discussion with M. Gaspar controller regarding

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1541
Ackerman-cross/Wallenstein

1 property user's log that was and is being maintained in
2 accordance with stipulation and order, re faxing same.
3 Reffsin's comments and suggestions thereto, etcetera; is
4 that correct?
5 A Yes.
6 Q Okay.
7 Now, going back to Exhibit 640, you sent that fax
8 with the logs, or your office did, to Mr. Kahn, Mr. Skalka
9 and Mr. Bailey; is that correct?
10 A Yes.
11 Q By the way, was Mr. Bailey counsel in the bankruptcy
12 proceeding or was Mr. Skalka?
13 A Mr. Bailey was showing up at the bankruptcy
14 proceeding often times. When there were hearings on the
15 motion, M r. Bailey would be leading them.
16 Q And Mr. Bailey was Reed's lead counsel, in the
17 litigation; is that correct?
18 A He was litigation counsel to my knowledge.
19 Q And Mr. Skalka who was a partner in Whitman Breed and
20 a bunch of other people, was the lead bankruptcy counsel
21 for Reed; is that correct?
22 A Yes.
23 Q And Mr. Bailey took the lead on occasion; is that
24 correct?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1542
Ackerman-cross/Wallenstein

1 Q Again directing your attention to
2 Government's Exhibit 640, would it be a fair statement
3 that on the 23rd of September, 1994, your office, since
4 you were out sick, your office received these logs from
5 Who's Who Worldwide and then caused them to be transmitted
6 to Mr. Bailey, Mr. Kahn and Mr. Skalka? Is that a fair
7 statement?

8 A With the cover letter, yes.
9 Q With the cover letter?
10 A Yes.
11 Q Right?
12 A Yes.
13 Q And you indicated on the cover letter that you also
14 sent a copy to Bruce Gordon and a copy to Marty Reffsin;
15 is that correct?
16 A By way of cc shown at the bottom of the letter.
17 Q Including the logs; is that correct?
18 A On this letter?
19 Q With that letter.
20 A In 640-A or on this letter?
21 Q Let me rephrase the question.
22 A Surely.
23 Q When you sent the logs to Bailey and Skalka and
24 Kahn --
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1543
Ackerman-cross/Wallenstein

1 Q Okay.
2 You also sent the logs to Gordon and Reffsin; is
3 that correct?
4 A This letter indicates that I cc'd the letter.
5 Q Right. So you know the letter was sent. Do you know
6 if the logs were sent?
7 A I would have to look at 640-A for that.
8 Q You have it?
9 A Yes.
10 Q It says you sent that letter with a different cover
11 letter?
12 A Yes.
13 Q It says nothing about the logs?
14 A No. It says in the fax confirmation that 11 pages
15 were sent through.
16 Q How many pages are the logs?
17 A Let me see.
18 Q While you are counting, the cover letter to Messrs.
19 Bailey, Kahn and Skalka, was only one page?
20 A Actually, the cover letter would be two pages.
21 Q The fax cover, okay?
22 A This would have been eight altogether. The log was
23 six pages, the fax cover memo was two pages.
24 Q So, would the fact that 11 pages were transmitted at
25 the same time be an indication to you that the logs were

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1544
Acker man-cross/Wallenstein

1 sent as well?
2 A Well, eight plus three is 11.
3 Q Now, would it be fair to say that the first time that
4 the logs were produced to you was on the 23rd of
5 September, to you and your office?
6 A Yes.
7 Q And would it be fair to say that they were produced
8 by Maria Gaspar?
9 A It would be fair to say that they were produced by
10 Who's Who.
11 Q Do you know who in fact at Who's Who wrote the logs?
12 A I have zero idea.
13 Q Do you recognize Mr. Reffsin's handwriting, as a
14 general question, do you know Mr. Reffsin's handwriting?
15 Have you seen it?
16 A I have seen it. Do I remember it now? I do not.
17 Q You looked at the logs, can you tell me if those are
18 in his handwriting or not?
19 A I can't recognize his handwriting now. But there is
20 an indication that it came from Who's Who Worldwide .
21 Q From their corporate offices, right?
22 A Yes.
23 Q And on the same day they arrived at Rivkin Radler and
24 Kremer from Who's Who's corporate offices, they were in
25 fact sent to Mr. Reffsin at his firm, correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1545
Ackerman-cross/Wallenstein

1 A Correct.
2 Q By the way, during the course of your representation,
3 did you ever learn that Mr. Reffsin maintained an office
4 at Who's Who?
5 A No. Everything that I learned during my
6 representation was that he had a separate accounting
7 firm.
8 Q Okay.
9 A In fact, he asked me to get more work to his
10 accounting firm.
11 Q Did you?
12 A I talked to him once about getting him trustee work.
13 Q And would it be a fair statement that you did that
14 because you felt he was a good accountant and he could be
15 trusted?
16 A I liked him.
17 Q But now could you answer my question?
18 A One never knows what will happen with trustee work
19 with accountants. You usually give them one or two things
20 and see how it worked out. I liked him and I thought he
21 was okay.
22 Q Based on your experience with him in the Who's Who
23 case, you felt he was a competent accountant?
24 A I felt he was worth giving a chance to, and I liked
25 him.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1546
Ackerman-cross/Wallenstein

1 Q All right.
2 Now, would it be fair to say that in the course
3 of your representation of Who's Who, going back to the
4 beginning of August or whenever it was you began, that you
5 conducted a fairly thorough investigation of the facts
6 surrounding Who's Who, and by that I mean their financial

7 situation in conjunction with the bankruptcy?
8 A I definitely spoke to people and looked at the legal
9 papers. I did as much as I could, yes.
10 Q In fact, your office, whether it be you or your
11 associates, conducted a fairly productive review of the
12 entire situation; is that correct?
13 A They definitely reviewed all the books and records
14 turned over by prior counsel. They looked over the
15 decision of Magistrate Judge Jordan, yes.
16 Q On how many occasions were documents and other things
17 reviewed in the course of your representation in August
18 and September 1994, and by you, again, I mean you
19 personally or any associates you had working?
20 A On how many occasions?
21 Q Yes.
22 A Frequent, once we came into the case.
23 Q Would you take a look at Exhibit 636, please. That's
24 the bill in case you have not figured it out by now.
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1547
Ackerman-cross/Wallenstein

1 Q Now, you billed -- Rivkin Radler and Kremer billed
2 Who's Who during the period for August and September of
3 1994, a total for services of a little more than $51,000;
4 is that correct?
5 A Yes.
6 Q And that was for a total of 297 hours of attorney
7 time; is that correct? Attorney and paralegal time?
8 A Yes.
9 Q Now, Mr. Kardisch was included in that time; is that
10 correct?
11 A Yes.
12 Q And that was all part of the bankruptcy proceeding;
13 is that correct?
14 A He was working on the adversary proceeding which was
15 being brought in the context of the adversary proceeding.
16 Q The adversary proceeding was being brought in the
17 context of the bankruptcy, was it not?
18 A Yes.
19 Q So th at all of this time, this 297 hours, involved
20 some aspect of the Chapter 11 bankruptcy proceeding; is
21 that a fair statement?
22 A Yes.
23 Q Okay.
24 And take a look at page 1, and we are on
25 Mr. Kardisch's time, I believe.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1548
Ackerman-cross/Wallenstein

1 The first entry on August 1st, 1994 begins,
2 review materials, correct?
3 A Yes.
4 Q The second entry, it is a little faded here, I
5 believe it is August 2nd, it says review extensive
6 materials in connection with proceeding before Magistrate
7 Jordan, and he spent a total of six and a half hours that
8 day; is that correct?
9 A That's what he recorded.
10 Q And he spent 3.4 hours on August 1st; is that
11 correct?
12 A That's what he recorded, yes.
13 Q And that entry continues on to page 2, the August 2nd
14 entry, and at the bottom of that entry he indicates he
15 reviewed the bankruptcy court document; is that correct?
16 A Yes.
17 Q And then on August 4th, there is an entry where he
18 says reviewed documents to prepare for meeting with
19 client; is that correct?
20 A Yes.
21 Q And on August 8th, there is an entry that begins,
22 continue review materials relative to adversary and
23 bankruptcy proceeding, and underlying trademark and
24 infringement actions; is that correct?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1549
Ackerman-cross/Wallenstein

1 Q Four and a half hours or so on that day.
2 THE COURT: You are not going to go through this
3 whole bill, Mr. Wallenstein?
4 MR. WALLENSTEIN: It is a question, Judge?
5 THE COURT: Yes, definitely. It calls for a yes
6 or no answer.
7 MR. WALLENSTEIN: I don't think I can answer that
8 question yes or no.
9 THE COURT: Very good, Mr. Wallenstein.
10 MR. WALLENSTEIN: I intend to extensively
11 cross-examine the witness with respect to entries in the
12 bill. However, in light of the Court's expression of
13 opinion I will tailor my questions somewhat.
14 THE COURT: Good thinking.
15 Q Mr. Ackerman, would you take a couple of minutes,
16 please, and review Exhibit 636.
17 THE COURT: He has memorized it by now.
18 MR. WALLENSTEIN: I hope so.
19 Q Would it be fair to say that each and every attorney
20 from Rivkin Radler and Kremer who worked on this
21 bankruptcy proceeding spent an extensive amount of time
22 reviewing materials, documents and so on?
23 A Yes, materials I discussed earlier, yes.
24 Q Okay.
25 Would it be fair to say that you would expect to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1550
Ackerman-cross/Wallenstein

1 walk in a bankruptcy court being thoroughly prepared?
2 A I would.
3 Q And you would expect your associates to be as well,
4 would you?
5 A They would be as prepared as they should be, and if
6 they were covering the hearing they would definitely be
7 very well prepared.
8 Q And if they were sitting in your office and you were
9 asking questions of them, you would expect them to have
10 the answers, wouldn't you?
11 A Absolutely.
12 Q If you asked for the backup of those answers, as to
13 what document do we find that in, you would expect them to
14 know that, too, wouldn't you?
15 A I would expect it.
16 Q And would it be fair to say that Who's Who had a
17 right to expect that Rivkin Radler and Kremer would do a
18 thorough investig ation and be thoroughly prepared to
19 proceed in the bankruptcy?
20 A Yes.
21 Q And in fact, is it not true that one of the reasons
22 that Who's Who went to Rivkin Radler and Kremer in lieu of
23 Mr. Flaum was because Mr. Flaum did not have sufficient
24 back up to satisfy Who's Who?
25 A That may have been one of its reasons.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1551
Ackerman-cross/Wallenstein

1 Q And Rivkin Radler and Kremer was a large firm and you
2 had the resources to provide additional personnel or time
3 if it was necessary. Would that be a fair statement?
4 A We were a much larger firm than Neil Flaum's firm.
5 Q Therefore you had more resources?
6 A Much more resources.
7 Q More back up, more personnel, and so on?
8 A Yes.
9 Q And would you take a look, please, at Exhibit 633-A.
10 That's a dra ft to a response for Reed's motion
11 for a trustee?
12 A I don't have that here. I believe it was taken back
13 down.
14 (Mr. Wallenstein confers with Mr. White.)
15 (Handed to the witness.)
16 Q Is that a document that you created?
17 A No.
18 Q Who did?
19 A Richard Weber and Gerard Catalanello, my associates.
20 Q Is it a document you edited?
21 A Not that I recall, not at this point in time.
22 Q Have you ever seen that document before?
23 A Have I ever?
24 Q Yes.
25 A As of now, yes, I have.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1552
Ackerman-cross/Wallenstein

1 Q In fact, did you see it on or about the 29th of
2 September, 1994?
3 A After.
4 Q How long after?
5 A The next month, at least.
6 Q You edited before it was submitted to the Court in
7 final versi on, correct?
8 A Yes.
9 Q When you read through it to edit it, was there
10 anything in there that was untrue?
11 A Not that I recall.
12 Q Okay.
13 So that parts which you may have eliminated for
14 the final version were not taken out because they were
15 untrue, but taken out because -- for editorial reasons you
16 did not want it in. Is that a fair statement?
17 A It could have been taken out because there were
18 comments made by the clients.
19 With respect to how I would edit it? I would
20 edit it because I would want something expressed a little
21 differently, I had 15, 16 years more experience than them.
22 Q Specifically, would you take a look at page 6,
23 please.
24 A Yes.
25 MR. WALLENSTEIN: Your Honor, may we approach

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1553
Ackerman-cross/ Wallenstein

1 with respect to this exhibit?
2 THE COURT: Well, if you are going to do that, we
3 might as well take a recess for lunch.
4 MR. WALLENSTEIN: Fine.
5 THE COURT: Members of the jury, we will recess
6 until 1:30 for lunch. Please do not discuss the case.
7 Keep an open mind.
8 See you at 1:30. Have a nice lunch.
9 Somebody is hungry on the jury.
10 (Whereupon, at this time the jury leaves the
11 courtroom.)
12 THE COURT: Yes, Mr. Wallenstein.
13 MR. WALLENSTEIN: I would ask you at this point
14 to have the witness step out, please.
15 THE COURT: All right.
16 We are going to need you not until 1:30.
17 Mr. Ackerman, just wait outside and stick around
18 for a few minutes, and then we will let you know.
19 (Mr. Ackerman leaves the courtroom.)
20 MR. WHITE: If you recall, Mr. Ackerman had some
21 hearing this afternoon, h e has to see if he can make it or
22 somebody would cover it for him.
23 THE COURT: He will make it. I will be glad to
24 call the judge if you want me to, Mr. Ackerman. I am not
25 guarantying any results, but it generally works.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1554
1 Yes, Mr. Wallenstein.
2 MR. WALLENSTEIN: Mr. White indicated he has no
3 objection. I intend to offer just this page. There are
4 only parts of this exhibit in evidence at this point in
5 any event.
6 I have another question. And that is that I
7 intend to question this witness with respect to his
8 knowledge of the bankruptcy rules and to call specific
9 rules to his attention. And I wanted to know what your
10 Honor's preference would be.
11 THE COURT: What rules and why?
12 MR. WALLENSTEIN: Rule 9011, specifically.
13 THE COURT: Wha t does it say?
14 MR. WALLENSTEIN: When you certify documents, you
15 are vouching for the contents. It is similar to our
16 Rule 11 and worded slightly different, but it has the same
17 effect, I think. And I intend to question him with
18 respect to that. And I believe that your Honor must take
19 judicial notice of that rule. I just wanted to know what
20 your particular procedure would be with respect to that,
21 whether I need to introduce the rule in evidence or simply
22 read it to him after asking for judicial notice, how would
23 you prefer I proceed?
24 THE COURT: I would prefer you to ask him, are
25 you familiar with Rule 9011, which says so and so.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1555
1 MR. WALLENSTEIN: Then read the rule to him?
2 THE COURT: You will tell him what the rule is?
3 MR. WALLENSTEIN: Yes.

4 THE COURT: I see no problem with that.
5 MR. WALLENSTEIN: That's what I wanted to know.
6 THE COURT: One other thing, the diaries. First
7 of all, the diaries are not in the possession to the
8 government. So you can ask the government for the
9 diaries, and it is a nice rhetorical question, but they
10 don't have the diaries. It is not a government witness in
11 quotes -- I don't want to use quotes, after quotes have
12 been used in various context in the case.
13 You would have to serve a subpoena to get these
14 diaries, as I see it. How would the government have any
15 control over these diaries?
16 MR. WALLENSTEIN: I think his entries in the
17 diaries relate to his testimony, and that's 3500 material.
18 THE COURT: That may be. But who has the duty to
19 supply those?
20 MR. WALLENSTEIN: He does (indicating).
21 THE COURT: Do you have the duty, Mr. White?
22 MR. WHITE: I am not sure -- I am not sure that
23 we do. First of all, I didn't know that these diaries
24 existed. If I understood Mr. Ackerman --
25 THE COURT: Talking about diaries to defense

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1556
1 lawyers in a criminal case is like throwing shrimp to
2 sharks.
3 MR. WHITE: I know, your Honor, I can see that.
4 MR. WALLENSTEIN: Can we object to that
5 comparison.
6 THE COURT: When you mention diaries,
7 scribbling -- I don't mean sharks. The analogy to sharks
8 has nothing to do with your character or personality. It
9 has to do with the eagerness that you would leap for it.
10 They would come right out of the water to get that.
11 As soon as you mention notes, diaries,
12 scribbling, anything like that, that's automatic reflex
13 action, where are th ey? I want them.
14 MR. WHITE: If I could just respond, your Honor?
15 THE COURT: Yes.
16 MR. WHITE: As I said, I was not aware that they
17 existed. I can tell you that the government subpoenaed
18 during the course of the grand jury investigation,
19 Mr. Ackerman's current law firm and the two prior firms he
20 was at. And we received documents from Mr. Ackerman. The
21 other two firms told us they had no responsive documents.
22 Now, Mr. Ackerman speculated that if they
23 existed --
24 THE COURT: We will find out in a minute because
25 I will call him in and ask him. They are entitled to have

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1557
1 these diaries. The question is how can they get them?
2 I am sure Mr. Wallenstein has no objection to
3 subpoenaing them. But that would mean they would have to
4 bring the witn ess back.
5 MR. WALLENSTEIN: What Mr. Ackerman's office is
6 in Westbury, and Rivkin Radler and Kremer is a stone's
7 throw literally. He speculated they were at Rivkin Radler
8 and Kremer.
9 THE COURT: Maybe he can pick it up during the
10 lunch hour.
11 MR. WALLENSTEIN: That was my thought. If it is
12 in one of those two offices, he could get them.
13 THE COURT: Get him in, please.
14 MR. WALLENSTEIN: And Meltzer Lippe is in
15 Westbury.
16 THE COURT: Can he have lunch in his car while he
17 is doing all these things?
18 MR. WALLENSTEIN: I do that all the time.
19 MR. SCHOER: Only criminal lawyers do that.
20 THE COURT: I didn't know criminal lawyers ate
21 lunch.
22 MR. SCHOER: Only a hot dog in the car.
23 THE COURT: How conscientious you are, Mr. Schoer,
24 I didn't know you did eat lunch.
25 MR. SCHOER: I do, Judge. Otherwise my wife

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1558
1 would yell at me.
2 (Mr. Ackerman enters the courtroom.)
3 THE COURT: Mr. Ackerman, these diaries you
4 brought up, they are personal diaries. One is Pat
5 Bzdyk --
6 THE COURT: You have a soft spoken voice, maybe
7 it is good in the bankruptcy court.
8 MR. ACKERMAN: They are Pat Bzdyk, my
9 secretaries.
10 THE COURT: How do you spell her last name?
11 MR. ACKERMAN: B Z D Y K.
12 And Pat I would give things to. I do this with
13 my office manager now, and I give them many things and say
14 date this up. And I write a letter and say this is to get
15 to by the 20th, and write it down.
16 THE COURT: Write it where?
17 MR. ACKERMAN: If I remember it is a red book,
18 the lawyer's diary manual. The red book.
19 THE COURT: Is that the one you referred to?
20 MR. ACKERMAN: Yes, I had my own that was
21 littered with stuff, and mostly I kept there were court
22 appearances.
23 THE COURT: These matters that Mr. Wallenstein
24 discussed with you would not be in your personal diary?
25 MR. ACKERMAN: I don't think so.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1559
1 THE COURT: Where is your personal diary for that
2 year?
3 MR. ACKERMAN: It could have been in storage or
4 it could be left at Rivkin. When I left Rivkin they were
5 very angry. It turned into an ugly affair. It was in the
6 paper. They begrudgingly gave me documents, they were
7 angry I was taking my clients with me.
8 THE COURT: You don't know where your personal
9 diary is.
10 MR. ACKERMAN: I don't believe it is in my
11 office.
12 THE COURT: If you went to Rivkin and said you
13 were here because a federal judge asked you to get the
14 diaries, would they give it to you?
15 MR. ACKERMAN: I had one conversation with Joseph
16 Ortego, O R T E G O.
17 THE COURT: I remember him. He tried a case
18 before me.
19 MR. ACKERMAN: Yes. He conversed with me when
20 the U.S. Attorney sent in requests for all documents. The
21 only thing I said to him is give them everything, just
22 give them everything.
23 THE COURT: If you went to Rivkin Radler and
24 Kremer -- the point is that the defendants have a right to
25 see those diaries.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1560
1 MR. ACKERMAN: Sure.
2 THE COURT: The question is, can you get them
3 during the lunch hour, or do they subpoena them and find
4 them or somebody will find them and you will have to come
5 back.

6 The point is I don't want to ruin your lunch
7 hour. But is it possible to get the diaries over the
8 lunch hour?
9 MR. ACKERMAN: I will call. But I must say that
10 I would be shocked if they were still in the firm.
11 THE COURT: Where would they be if they were not
12 in the firm?
13 MR. ACKERMAN: Storage. Rivkin was really good
14 about storage.
15 THE COURT: Where is storage? Rivkin Radler and
16 Kremer I don't know. But there was a person by the name
17 of Robert who would ferry back and forth and pick these
18 up.
19 THE COURT: Storage is not in Sioux City, Iowa?
20 MR. ACKERMAN: No, on Long Island, very close.
21 THE COURT: If it was in storage it would take a
22 day or two to get it?
23 MR. ACKERMAN: Possibly.
24 THE COURT: Can you ascertain where your
25 secretary's diary is?

HARRY RAPAPORT, CSR, CP, CM OF FICIAL COURT REPORTER
1561
1 MR. ACKERMAN: Pat Bzdyk?
2 THE COURT: Yes.
3 MR. ACKERMAN: She has not worked for me for
4 years, but it is probably with Rivkin Radler and Kremer or
5 she would have chucked it.
6 THE COURT: Both your diary and Pat's diary would
7 be at Rivkin Radler and Kremer?
8 MR. ACKERMAN: Mine might be, Pat's if it was
9 still kept, it might be.
10 THE COURT: Where is yours if it is not at Rivkin
11 Radler and Kremer?
12 MR. ACKERMAN: It might have been taken by me to
13 my firm and that's storage in Suffolk County.
14 THE COURT: I want to know where your diary would
15 be?
16 MR. ACKERMAN: In my own personal storage place.
17 THE COURT: And where is that?
18 MR. ACKERMAN: Suffolk County somewhere.
19 THE COURT: You could not find that out during
20 the lunch hour?
21 MR. ACKERMAN: No .
22 THE COURT: See if you can find out if Rivkin has
23 these diaries?
24 MR. ACKERMAN: I will call right now.
25 THE COURT: You let us know at 1:30. If not we

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1562
1 will worry about it at that point.
2 MR. ACKERMAN: Okay.
3 THE COURT: All right.
4 MR. WHITE: As I said before, Rivkin was
5 subpoenaed for those documents, and I spoke to Mr. Ortego
6 or somebody there, and the response to the grand jury
7 subpoena is they had no documents.
8 THE COURT: They were subpoenaed specifically and
9 expressly for diaries of the secretary and Mr. Ackerman?
10 MR. WHITE: No, your Honor. They were subpoenaed
11 for numerous categories of documents which I am looking at
12 now, which would cover such diaries.
13 THE COURT: Let's find out specifically or
14 expressly wheth er they have these diaries.
15 Mr. Ackerman will report back.
16 MR. WHITE: Okay.
17 MR. ACKERMAN: There is one other issue, your
18 Honor. I do have a fairly significant recall, and it is
19 not always that what I do is based upon a reminder in my
20 diary. I just tend to remember things.
21 THE COURT: That's another thing. You will
22 answer the questions when Mr. Wallenstein asks you, but
23 you did mention there were diaries with entries with
24 respect to this matter.
25 MR. ACKERMAN: Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1563
1 THE COURT: See if you can't find the diaries.
2 MR. ACKERMAN: I will do that right now.
3 THE COURT: We will take a recess to 1:30.
4 MR. NEVILLE: The Friday issue, can we talk about
5 it after lunch or the end of the day today? I want to
6 bring it up early in the week.

7 THE COURT: Why not take it at the end of the day
8 today.
9 MR. NEVILLE: Thank you.
10 THE COURT: What is it? You have some things to
11 do on Friday or what?
12 MR. NEVILLE: Yes, and I think some of the other
13 lawyers do also. We are here all week and Friday we try
14 to squeeze things in.
15 THE COURT: All right, I will take it up at the
16 end of the day.
17 MR. NEVILLE: Thank you.
18 (Luncheon Recess.)
19
20
21
22
23
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1564
1 A F T E R N O O N S E S S I O N
2
3 (Whereupon, the jury at this time entered the
4 courtroom.)
5 THE COURT: Please be seated.
6 THE COURT: Where is Mr. Dunn, is he around?
7 MR. NELSON: I believe he was on the telephone,
8 your Honor.
9 THE COURT: Do you want to get him, please.
10
11 N E I L A C K E R M A N ,
12 called as a witness, having been previously
13 duly sworn, was examined and testified as
14 follows:
15
16 (Whereupon, at this time there was a pause in the
17 proceedings.)
18 THE COURT: You may proceed.
19 MR. WALLENSTEIN: Thank you.
20 Would you ask the reporter to read the last
21 question?
22 THE COURT: No, I will not. From now on you will
23 remember.
24 MR. WALLENSTEIN: All right.
25 At this time, I will offer by stipulation with

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1565
1 Mr. White, page 6 of 636-A, in addition to the other pages
2 already introduced.
3 THE COURT: What number?
4 MR. WALLENSTEIN: Page 6 of 636-A, other portion,
5 are already introduced.
6 THE COURT: Very well.

7
8 CROSS-EXAMINATION (cont'd)
9 BY MR. WALLENSTEIN:
10 Q Do you have Exhibit 633-A there?
11 A Yes.
12 Q 636-A.
13 A Yes.
14 Q Look at page 6, specifically, paragraphs eight and
15 nine.
16 Read, please paragraph eight.
17 A From the outset when our RR&K was initially
18 approached by Gordon to, quote, get involved with, end
19 quote, this case, RR&K, short for Rivkin Radler and
20 Kremer, conducted a thorough investigation of the debtor's
21 pre petitioner and post-petitions operations, including
22 the alleged fraudulent grounds -- they were capitalized,
23 so they were defined terms, contained in the trustee
24 motion.
25 Q And paragraph 9 of that letter refers to the loans

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1566
Ackerman-cross/Wallenstein

1 and other transactions; is that correct?
2 A Yes, it does.
3 Q And that reads: By letter dated September 8th, 1994,
4 RR&K again provided Reed's attorneys, as well as counsel
5 for the committee with comprehensive and detailed
6 explanations regarding all transactions, by and among the
7 debtor, Gordon, the Grossman's, Sterling, Who's Who
8 Executive Club and PVI as requested in Reed's
9 interrogatories; is that correct?
10 A Yes, it does.
11 Q And you indicated earlier, that although you removed
12 those two paragraphs from the final version, you did not
13 do so because of any untruth contained therein; is that

Dirtiest Trials of the Twentieth Century The Who's Who Worldwide Registry Tragedy

Dirtiest Trials of the Twentieth Century
The Who's Who Worldwide Registry Tragedy