UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE BRANCH
Ctrm: Honorable Trumbull
Ishi Press International, a California Corporation,
Elwyn Berlekamp, Nathaniel Berkowitz, and Hartland
Richard Bozulich, individually, and The Ishi Press,
Inc., a Japanese Corporation, Samuel Sloan aka
Ismail Sloan an individual,
Counter - Defendants.
Declaration of Samuel Sloan in Opposition to Motion for a Protective Order
I, Samuel Sloan, declare:
1. I am the President of Ishi Press International, a California Corporation. I was first elected president on October 26, 1994, the same date that James W. Connelley was removed as president and director. I was reelected President on November 7, 1994 at a meeting of directors which took place immediately after a special meeting of stockholders which took place on November 7, 1994.
2. In addition, I am the designated agent for service of process for Ishi Press International. I have filed the last two annual reports with the California Secretary of Corporations. I have paid the state tax for Ishi Press International for the past two years.
3. I am aware that the defendants and counter claimants to this suit contend that I am not the president of Ishi Press International, but there is no legal doubt that I am. The forms notifying the defendants that they had been removed as directors of the corporation were copied directly out of Bender's forms of California Practice. Similarly, the call for a special stockholders meeting, the minutes of the meeting and all of the other documents were taken directly from Bender's forms. In addition, the by-laws of Ishi Press International are nothing more than the model California by-laws. They were not drafted especially for Ishi Press International. They are the standard by-laws which almost everybody uses. The legal commentary on these by-laws and the California Corporation Code clearly explains that any ten percent stockholder in a California Corporation can call a special meeting of stockholders on ten days notice. In addition, it is well established that a majority of stockholders can remove the entire board without notice.
4. Of equal importance and perhaps even greater importance, the defendants do not have a board. This is a point which I think that this court previously kept overlooking. At the time of the deposition of Janis Miller on November 20, 1996, Judge Trumbull asked Steven Miyake directly: "Who is the authorized representative of Ishi Press International." Mr. Miyake replied: "Not Mr. Sloan."
5. Later, I believe, Judge Trumbull asked much the same question and got much the same answer.
6. In fact, Mr. Miyake does not have an answer to that question. Elwyn Berlekamp states that he resigned as a director and sold all his stock in Ishi Press International on July 7, 1995. Mr. Berlekamp states that he has no further connection with the corporation.
7. Nathaniel Berkowitz states that he resigned as a director and sold all his stock in Ishi Press International on July 7, 1995. Mr. Berkowitz states that he has no further connection with the corporation.
8. Hartland Snyder has never been a director of the corporation. This was confirmed at a deposition of Martin Lowenstein who testified that he was present at the relevant meetings and Hartland Snyder was not made a director at any of those meetings.
9. James Connelley testified that he resigned as a director in about March, 1995.
10. That leaves the only director, by their count, as Richard Bozulich. Thus, even if the November 7, 1994 stockholders meeting was invalid, Richard Bozulich is the only director of Ishi Press International.
11. It is well established, as Judge Trumbull pointed out to Steven Miyake on November 20, 1996, that a corporation acts through its agents. Mr. Miyake kept making statements like: "The corporation did this" or "the corporation didn't do that." Judge Trumbull wanted to know "Who?" Mr. Miyake kept saying, "The corporation."
12. The fact is that none of the defendants want to be held legally responsible for the corporation. They want to control the corporate assets, the corporate bank accounts, the corporate mailing lists, the corporate premises and so on but they do not to be held responsible for anything the corporation does. The defendants have not filed anything with the California Secretary of State. They have not filed corporate income taxes. They have not filed federal income taxes. They have not filed unemployment or social security. They have not conducted a stockholders meeting since September, 1993, four years ago. They have done none of the things which corporate officers are supposed to do.
13. Hartland Snyder has been on the run since 1988. In October, 1988 a judgment was entered against him in the Berkeley Albany Municipal Court for what is now $32,000. He has been running from that judgment ever since. At one point a bench warrant was issued against him. As a result of his filing for bankruptcy in 1993, that bench warrant was lifted. Hartland Snyder has been able to avoid going to jail ever since for contempt by concealing his whereabouts. He has no known residence address. He has no regular place of business. We have expended considerable time tracking him down and serving him with process. He has been served five times in this case alone. Every time he is served he makes a bogus claim that the service was in some way improper. He has made the same sort of claims to the Berkeley Albany Municipal Court. He does not come to court any more and always defaults obviously because he knows or at least believes that he is going to be arrested and put in jail.
14. A lawyer in Oakland who has been following the career of Hartland Snyder for the past nine years states that Hartland Snyder is "the best there is" in evading the enforceability of judgments and the service of process.
15. Hartland Snyder has been found to be a perpetrator of domestic violence and abuse. An Oakland woman, Linda Louise Davenport, has obtained a three year restraining order against him after a full trial. Case No. 742260-50. The trial took place on November 8, 1994, almost the same date as our special stockholder's meeting of Ishi Press International. A copy of the order is annexed.
16. I have been contacted on the Internet by a cousin of Hartland Snyder. She says that 20 years ago Hartland's father threw him out of the house and told him never to return and not to contact the family again. Until his family saw his name on the Internet, they had no idea where he had been for 20 years.
17. The declarations of Elwyn Berlekamp and Nathaniel Berkowitz both state that they sold all their shares of stock in Ishi Press International to Hartland Snyder. Martin Lowenstein has testified that he sold his stock to Hartland Snyder as well. The price Hartland paid for Lowenstein's stock was only $250 (two hundred fifty dollars) according to Lowenstein.
18. Hartland Snyder has been ordered by the Berkeley Albany Municipal Court to surrender all of his shares in Ishi Press International to the Sheriff of Alameda County. The name of the case is Wolok v. Hartland Snyder, No. 62077. A copy of the order is annexed. Hartland Snyder has not complied. We spent a month chasing him down. After more than ten unsuccessful attempts at service of process, he was finally served in October. The process server nailed him by coming through the back door through the office of another company.
19. Hartland Snyder has not complied with the court's order and has not surrendered the shares. I understand that he has been saying that he sold his shares in Ishi Press International to a person named "Cavalier". He does not know the person's address. This person did not pay him any money, says Hartland Snyder. He only promised to pay money in the future.
20. Now the lawyer involved in that case (who has no connection with this case) will have to file another motion to hold Hartland in contempt and try to serve him with that motion. Hartland will continue to wiggle. Ultimately, he will file for bankruptcy again, as he did in 1993. That 1993 bankruptcy was dismissed because Hartland failed to pay the required fees, failed to show up at the debtor's examination, failed to file any of the required schedules and in short never did anything beyond the initial bankruptcy filing. Yet, by filing for bankruptcy, Hartland was able to get the bench warrant lifted and to start this process all over again. It is an endless cycle.
21. This explains why Elwyn Berlekamp and Nathaniel Berkowitz have named Hartland Snyder as the "Acting President" of Ishi Press International. Hartland is completely judgment proof. Any judgment against him will be worthless. We need to be able to prove that Berlekamp and Berkowitz are controlling and manipulating the situation through Hartland Snyder. Both Berlekamp and Berkowitz are wealthy people. Berlekamp has an estimated net worth in the mid-eight figures. However, Berlekamp will be trying to maintain plausible deniability. He will say that he has nothing to do with this. In fact, it is Berlekamp who has everything to do with this. Berlekamp brought in Hartland Snyder. Berlekamp brought in Nathaniel Berkowitz. Berlekamp brought in John Torode. Howard Neal is Berlekamp's personal lawyer. Berlekamp is trying to steal our company by harassing us with litigation because he is in a position to pay huge attorney's fees and eventually burn us out.
22. Although Berlekamp appeared to be a "nice guy" at the beginning and many believe that he is still a "nice guy" now, it is apparent from a chain of events that it was Berlekamp's intention from the beginning to steal this company. He wanted Ishi Press as a "trophy". Why would Berlekamp, a famous mathematician, want this? He wanted it because Ishi Press has a prestigious name, built up entirely through the efforts of Richard Bozulich since 1969. While not well known outside of intellectual circles, Ishi Press has a name among a certain intellectual elite. Berlekamp had a virtually unlimited amount of money and with it he felt that he could get that name. Perhaps he wanted an outlet for his own publications. In any event, it is clear that with the exception of Connelley, who was there before Berlekamp got in, all of the people involved on that side of this court case are Berlekamp's men. In addition, several former employees of Ishi Press have stated that "Berlekamp is out to personally destroy Richard Bozulich."
23. I want to explain the gravity of this situation. Richard Bozulich not only founded Ishi Press International, but he completely financed it. Connelley never put in any money. (Connelley claims that he put in $10,000 but there is no evidence of that. If he did put in that amount he has long since taken it out.) Whenever Ishi Press International got into financial trouble, Bozulich loaned it money to keep it going. Bozulich also shipped $111,000 worth of goods which were never paid for by Ishi Press International.
24. In order to finance these loans and shipments, Bozulich mortgaged his own house in Japan. Now, because of the failure and refusal of the defendants to pay this money, which comes to around $300,000 not counting interest, the bank in Japan has foreclosed on this loan and he is about to be evicted from his house in Japan. He has to move out of the house within the next few weeks. His wife divorced him one year ago in October, 1995 because of this situation. Meanwhile, Connelley has obviously embezzled money from the company and is living in a beautiful home on 970 Plaza Drive in San Jose which he very possibly paid for with money embezzled from the company and from Richard Bozulich.
25. Not only have the defendants not paid the money which is owed to Richard Bozulich and to Ishi Press (Japan) but they have the audacity to claim that he is not even owed that money any more. Please look at the so called "minutes" dated November 10, 1994 which are attached to the declaration of Nathaniel Berkowitz. These "minutes" acknowledge that Richard Bozulich made four loans to Ishi Press International. The amounts included 3,639,800 yen on May 28, 1991, 2,000,000 yen on February 3, 1992, and 2,150,000 yen on February 15, 1992. There was also a promissory note made for $42,168 made on June 1, 1988. This comes to a total of about $120,000 not counting interest. Then these "minutes" go on to state that "Connelley said that these advances had been repaid in the normal course of business."
26. When were they paid? We have been trying to get an answer to that question for the past three years. Connelley has never produced any documentation showing when and how this was paid, although he has promised many times to do so. At a meeting in October, 1994, Connelley told me: "It is all in the accounting." However, he said that he could not get that accounting to me right away because he was in the middle of the Christmas rush. The Christmas rush for 1994 is long since over. We have never received the accounting. At the deposition of Connelley on November 8, 1996, Connelley said that Janis Miller had done this accounting. However, when we took the deposition of Janis Miller on November 20, 1996, she denied that she had done any such accounting.
27. Obviously the claim by Connelley that these moneys had been repaid to Bozulich is bogus. No money of any kind was paid from Ishi Press International to Bozulich or to Ishi Press (Japan) during the relevant period from 1992 to 1994. This also proves that the "minutes" themselves dated November 10, 1994 are false and fraudulent. Bozulich would never agree that these moneys have been repaid. He has consistently demanded the repayment of these moneys. Please note that several of the names are spelled wrong in these minutes. We have asked every witness thus far who wrote these minutes. Nobody seems to know or to be willing to take responsibility for them.
28. Almost the entire counter suit filed by the defendants is based upon oral agreements which they say that Bozulich made with Connelley. I feel quite certain that Bozulich never made those agreements. Moreover, such agreements even if he made them are barred by the statute of frauds. They claim in essence that by oral agreement Bozulich conveyed to them the rights to all the books he has published since 1969, the rights to the Ishi Press trademark, the Ishi Press name, the Ishi Press logo and in short that all of the corporate assets of Ishi Press (Japan) now belong to them, they say.
29. Hartland Snyder has written letters to everyone he knows of that Bozulich does business with among other things threatening them with litigation if they do not stop doing business with Bozulich. Hartland writes letters stating that he wants Bozulich to be "fired." Hartland Snyder has written letters to John Power, Bill Franke, Jim Davies, Sidney Yuan, Takashiro Yoshikawa, Ing Chang Ki and even to Sam Sloan making such statements. Hartland Snyder claims not only the rights to all books written or published by Richard Bozulich in the past, but he has even claimed rights to the books that Richard Bozulich has not written yet but will write in the future. Because of this harassment, Ishi Press (Japan) stopped selling books. Richard Bozulich found a new publisher named Kiseido. Hartland Snyder has written to Kiseido saying that he has rights to those books as well.
30. In addition, because of this harassment, I can not market my own book. I am the author of a book entitled "Chinese Chess for Beginners" published by Ishi Press International. Nobody is willing to sell my book because they are afraid of being sued by Hartland Snyder. Ishi Press (Japan) has published about 100 publications. All of the authors of those works find that their works are unmarketable because of this situation.
31. At the same time, Hartland Snyder and his group refuses to pay any royalties at all to any of the authors of these books. They print and sell books but not one author has been paid. David Fotland is owed $19,000. I obtained a judgment against them for $5020. Numerous other authors are owed money by them. A printer named Griffon Printing has a judgment against them. I have fairly recently found out that in 1995 they sold Sneaky Squares, a puzzle developed by Ishi Press International while Richard Bozulich was chairman, to R & B Acquisitions in Alexandria, Virginia for $75,000. With that money they could easily have paid off me and Fotland and the other authors. Instead, they used that money to pay off a line of credit at Summit Bank which had been guaranteed by Connelley. They are giving corporate insiders a preference over legitimate creditors.
32. With the judgment I hold I obtained a writ of execution against Summit Bank. The bank had the money and paid the full amount to the Sheriff of Alameda County. However, Berkowitz filed a "third party claim" in which he claimed that he had a prior right as a third party to that money. He was able to get the money released. I requested a hearing and Commissioner James Heath of Los Gatos Small Claims Court ruled in my favor, but I was not able to collect the money because it had already gone back. So, I obtained another writ and this time the sheriff collected some more money, but not the full amount. Berkowitz filed another third party claim. There was another hearing and then another and then another. I have now been to court around six times against Hartland Snyder and Nathaniel Berkowitz over just this one item. (I have actually lost count.) I have collected some money but meanwhile I have paid more than one thousand dollars just in process server's fees. One and a half years have passed and I still cannot get my money.
33. In short, these defendants are just playing a game. They are chronic pro se litigants. Berkowitz has a dozen cases in San Francisco Superior Court. Hartland Snyder has a similar number of cases in the Alameda County Courts. They are having a jolly time giving us a run around. They steal our company, loot our bank accounts, sell our books, sell our assets, keep the money and we and a hoard of other creditors just keep chasing them and never get anywhere.
34. Their complaints, pleadings and declarations are all filled with lies and unverifiable allegations. For example, several times they say that Bozulich was not a majority stockholder in Ishi Press International. However, the facts are that Bozulich owned 197,000 shares. Towako Doi, the wife of Richard Bozulich, owed 30,000 shares. All of the people on the stockholders list with Japanese names are friends of Richard Bozulich and he held their proxies. In contrast, Berkowitz only owned 10,000 shares. Berlekamp only owned around 26,000 shares and Connelley, the largest stockholder outside of Bozulich, owed 120,000 shares. Thus, Bozulich could easily vote out the rest.
35. The claim by Berkowitz that Bozulich did not own the majority of shares is based on the claim that Berkowitz was issued 158,000 shares prior to the meeting on November 7, 1994. However, this was obviously a fraudulent claim. Berkowitz told me at a meeting on or about October 22, 1994 that he only owned 10,000 shares. He later got Connelley, who was working for Berkowitz, to "issue" him a 158,000 share certificate. The claim by Berkowitz that he had a right to those 158,000 shares was that he had purchased a note from John Torode who had loaned $40,000 to Ishi Press International UK (London). Berkowitz bought that note for only $500 (he says) so he was clearly not a holder in due course. The most important additional fact is that Berkowitz personally owned Ishi Press International UK (London) which was a different corporation from Ishi Press International, a California corporation. The note was an obligation of Ishi (London), Berkowitz's company. It was not a note of Ishi Press International, a California Corporation. Nowhere in the corporate minutes of Ishi Press International, a California corporation, is that note mentioned. It is apparent from the terms of the note that Berkowitz had no right to "convert" that note into Ishi Press International, a California Corporation's, shares.
36. Furthermore, there was a posting on an Internet newsgroup entitled rec.games.go yesterday from England which indicates that the entire story being told above by Connelley and Berkowitz may be false and fraudulent. I will try to obtain more verifiable information, but this will be difficult because the English source of this information, Harry Fearnley, refuses to cooperate.
37. Repeatedly, they quote from a letter Bozulich wrote to me in October, 1994. However, this suit was filed in October, 1995, one year later. What is the relevance of that letter written one year earlier? Bozulich and Ishi Press (Japan) were owed more than $300,000. As shown above, there was $120,000 in loans and notes. There was also $111,000 in shipments of go books and equipment which were never paid for. There were also royalties and other items. Plus, there was interest on all of the above. They were not only stealing from Richard Bozulich and from his company, but they were stealing the entire corporation which he had spent a decade building up. Naturally, he wanted me to help him to file a lawsuit to get his money back.
38. Nathaniel Berkowitz has done this at least once before. I understand that he used similar tactics to get involved in InFerGene Corporation, claiming that he had a right to shares to which he had no right. I do not know the details, but I do know that Berkowitz was criminally indicted by the Solano County District Attorney. InFerGene filed for bankruptcy in 1991 and is still in bankruptcy to this day. This is a well known case, which has several times been mentioned in the press.
39. Almost all of the "facts" set forth in the declarations of the moving parties are actually issues in dispute to be resolved at trial. Richard Bozulich vehemently states that he did not sign certain documents that they say that he signed. He states that they will not be able to product an original or even a faxed copy. We want to see the originals of these documents. They claim that he agreed at a meeting on November 10, 1994 that the shareholders meeting of November 7, 1994 was not valid. However, he states that he made no such agreement. Moreover, even if he did, he had no power to do so, because at that point in time I was the President of Ishi Press International, not Richard Bozulich, and the defendants well knew that. They knew that Richard had no authority to make such an agreement.
40. They state (also repeatedly) that I alleged that James W. Connelley was the agent for service of process of Ishi Press International. This is true, because on the days in question Connelley was the agent for service of process. We left him as the agent and he never resigned because we were trying to serve the corporation. Connelley evaded service of process but finally he was caught at his house late on Christmas Eve, 1995. After he had been served and appeared, I filed with the Secretary of State that I was henceforth the agent for service of process.
41. They keep arguing that I stated that I am not a party to this action. They have reversed positions from before. Back when they were trying to quash service of process, they alleged that I was a party to this action. I believe that they were successful in requiring us to serve them again. Now that service is no longer an issue (at least so far as I am aware) they reverse positions and say that I am not a party. I believe that sanctions would be in order here.
42. They keep saying that they dropped me as a defendant because I am in bankruptcy. The fact is that I was discharged from bankruptcy by the San Francisco bankruptcy court in March, 1995, one and a half years ago. One confusing point is that the San Francisco bankruptcy court issued two orders of discharge by mistake. It then vacated the second order one week later. The first order remained in effect. I explained this to Mr. Miyake and I am sure that he understands this. The fact that he keeps alleging that I was dropped as a defendant only because I am in bankruptcy shows that he plans to add me back on as a defendant at the right time.
43. Mr. Miyake knows that I cannot afford to pay for all of these depositions myself. His strategy clearly is to exclude me from participating in the depositions. I will not be able to tell Mr. Craig Mar what questions to ask. He alleges that I just became involved with this case in 1994. This is not true. I have been involved with Ishi Press since 1984. Perhaps one reason that some of the defendants did not become fully aware of my involvement in this case until October, 1994 was that Connelley always insisted on keeping me out of the picture. For example, Berlekamp came to Japan in April, 1992. I was in Japan in the Ishi Press (Japan) office. Bozulich tried to introduce me to Berlekamp. Berlekamp refused to meet me because Connelley had told him not to meet with Sloan. This has always been Connelley's strategy and Connelley's insistence. Connelley knows that Bozulich is a babe in the woods when it comes to these financial matters and that Bozulich can easily be taken to the cleaners but that I am the one with 18 years experience in corporate finance in Wall Street who won a securities law case in the United States Supreme Court (436 US 103 (1978)) and who can protect the interests of Richard Bozulich. For example, they insisted that I not attend the meeting of November 10, 1994. They did not want Bozulich to bring any witnesses. That is why they are now able to allege that Bozulich made certain agreements at that meeting. They insisted that Bozulich not bring me or any other witness to a meeting on November 6, 1994 either. Connelley has written two letters to Bozulich recently implying that a settlement can be made of this suit but only if Sam Sloan is kept out of the settlement negotiations. Bozulich is not going to fall into this trap any more and he immediately forwarded those letters to me. The obvious reason is that every time he meets with them or even speaks to one of them on the telephone, they later on allege that he has made some oral agreement which he says that he never made.
44. During the telephone conference with Judge Trumbull on November 20, 1996, Steven Miyake stated that he has filed an amended complaint dropping me as a defendant and that it would be arriving in the mail soon if it had not arrived already. As far as I know, this statement was not true. No such amended complaint has ever been filed. I am still named as a defendant in the caption of the complaint. (I hope that the court kept a tape recorded of that conversation.)
45. For all of these reasons and several more, this motion for a protective order was not made in good faith and must be denied.
I, Samuel Sloan, have read the foregoing declaration and know the contents thereof. The same is true of my own knowledge, except as to those matters which are stated upon information and belief, and, as to those matters, I believe them to be true. I declare under penalty of perjury under the laws of California that the foregoing is true and correct.
January 6, 1997