James B. Nicholson, Trustee vs. Harmon

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

JAMES M. CRIBLEY

Case Lombardi & Pettit
737 Bishop Street, Suite 2600
Honolulu, HI 96813-3283

Fax: (808) 523-1888
E-Mail: jcribley@caselombardi.com

James Cribley is a Director/Shareholder in the prominent Honolulu law firm of Case Lombardi & Pettit, and is the Chairman of the Board of Directors of Kamehameha Schools’ captive insurance company, P&C Insurance Company, Inc.

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NEW UPDATE (09-07-08):

EARL I. ANZAI
Attorney General of Hawaii

DOROTHY D. SELLERS
HUGH R. JONES
Deputy Attorneys General
425 Queen Street
Honolulu, Hawaii 96813

Attorneys for the Beneficiaries

IN THE CIRCUIT COURT OF THE FIRST CIRCUIT

STATE OF HAWAII

In the Matter of the Estate

BERNICE P. BISHOP,

Deceased.

EQUITY NO. 2048 KSCC

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REPORT OF ATTORNEY GENERAL CONCERNING MAY 7, 1999 ORDER

The May 7, 1999 order regarding orders to show cause requires the former trustees immediately to resign offices and directorships in the trust’s subsidiary and affiliated organizations... P&C Insurance Company, Inc., is a captive insurance company, the sole stock holder which is Pauahi Holdings Inc.

The Attorney General respectfully invites the court’s attention to the annual report publicly filed on March 28, 2000 by P&C (Ex. 1). The annual report lists Henry H. Peters as a director. The Attorney General is unable to determine whether the listing is incorrect; or whether Peters remains a director in violation of court order. The Attorney General’s several inquiries of the trust concerning this matter remain unanswered despite the passage of three months (Ex. 2).

DATED: Honolulu, Hawaii, May 5, 2000

Respectfully submitted,

<s> DOROTHY SELLERS
Deputy Attorney General

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DECLARATION OF DOROTHY SELLERS

DOROTHY SELLERS hereby states:

1. I am a deputy attorney general, and I am familiar with the case records and files in Hawaii First Circuit Court Equity No. 2048 going back to approximately August 1997.

2. I have personal knowledge of the facts contained in this declaration and am competent to testify to them.

3. Exhibit 1 is a true and correct copy of the annual report of P&C Insurance Company for the year ending Dec. 31, 1999, filed in late March 2000.

4, Exhibit 2 is a true and correct letter of my February 15, 2000 letter to counsel for the trust asking for verification that Henry Peters had resigned from P&C and the effective date of the resignation. I have never received a response to that letter.

5. On March 13, 2000, deputy attorney general Hugh Jones wrote trustee Libkuman (with a copy to general counsel Colleen Wong) about a number of matters. The final two paragraphs of that letter are:

Finally, we also requested some time ago copies of Henry Peters’ letters of resignation from directorships and ex officio positions, and specifically from P&C Insurance Company. Although the resignation letters of the other trustees were filed with the Court, Peters’ were not.

Please respond to these requests before March 31, 2000. Thank you.

I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT.

DATED: Honolulu, Hawaii, May 5, 2000

www.kycbs.net/Doc-EQ2048-PC-Peters-5-5-0.pdf

www.kycbs.net/PC-Arms-Length-Guide-10-1-94.pdf

www.kycbs.net/Doc-EQ2048-Mediation-Order-3-9-0.pdf

www.kycbs.net/KSBE-INTERROGATORIES.htm

www.kycbs.net/RICO-In-Paradise.htm

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NEW DISCOVERY (02-09-08): Kamehameha Schools made a “confidential” settlement agreement with the plaintiff in the John Doe vs. Kamehameha Schools case, which my former attorney, John Goemans, Esq., says, according to what he has learned from the IRS, violates the rules for a non-profit charitable trust:

February 9, 2008

$7M

An attorney involved in a challenge to Kamehameha Schools' Hawaiians-only policy reveals the amount of a settlement

By Ken Kobayashi, Honolulu Star-Bulletin

Kamehameha Schools made the first move to settle a legal challenge to their admissions policy giving preference to native Hawaiians and later agreed to pay $7 million, a lawyer involved in the case said yesterday.

John Goemans, an attorney for an unnamed non-native Hawaiian student who filed a lawsuit contesting the policy, said the charitable trust offered for the first time to talk about an out-of-court settlement last May, just days before the U.S. Supreme Court was to decide whether to hear the case.

Goemans, a former Big Island attorney recuperating in Florida from heart surgery, and Sacramento, Calif., lawyer Eric Grant, the lead attorney, represented the unnamed student and his mother.

"They (the schools) approached Eric and said we wanted to settle and we have to settle by Friday morning," when it was believed the high court was to make a decision about accepting the case, Goemans said.

He said it appeared the high court would accept their appeal of an 8-7 decision by the 9th U.S. Circuit Court of Appeals that upheld the policy.

"They (the schools) were worried about losing in the Supreme Court," Goemans said.

Goemans said he did not know how Grant and the Kamehameha Schools arrived at the $7 million figure.

The hotly disputed federal civil rights lawsuit caused a firestorm of controversy among Kamehameha Schools supporters who believed the challenge struck at the more than century-old admissions policy and the heart of the charitable trust's mission to educate children of Hawaiian ancestry.

The confidential settlement was announced on May 14. Those connected with the case repeatedly refused to disclose the terms.

Goemans said he was disclosing the amount because he said he recently learned from Internal Revenue Service officials that Kamehameha Schools, a tax-exempt charitable trust, cannot keep the figure confidential.

"Because exempt organizations operate in the public good, you got to report all your expenses with particularity, and you cannot keep information relative to those expenses confidential," he said. "It's in the public interest to have full disclosure."

Ann Botticelli, Kamehameha Schools spokeswoman, said yesterday the settlement contained a confidentiality clause.

"We intend to honor the terms, and we will not be discussing the settlement or John Goemans' assertions," she said.

Grant said yesterday he had no comment.

Kamehameha Schools, a multibillion-dollar charitable trust and the state's largest private landowner, was established under the 1883 will of Princess Bernice Pauahi Bishop. It educates more than 6,700 students at its flagship campus at Kapalama Heights, two other campuses on Maui and the Big Island, and 31 preschools throughout the state.

Senior U.S. District Judge Alan Kay upheld the school's Hawaiians-first policy, but a panel of the appeals court in San Francisco ruled 2-1 that the practice violated federal civil rights laws. That decision triggered statewide protests and marches by school supporters.

Later, a larger appeals court panel voted 8-7 to uphold the policy.

It was an appeal by Grant of that 8-7 ruling that was on the doorsteps of the U.S. Supreme Court when the settlement was announced.

At the time, school officials indicated that the settlement calling for the dismissal of the lawsuit leaves intact the appeals court's 8-7 decision upholding the admissions policy.

But the dismissal does not guarantee that another lawsuit might surface and make its way to the high court, although it would first have to go through the federal trial and appeals courts, where the 8-7 ruling would be considered to be binding on the issue. But even if those who file the new lawsuit lose on those two levels, they could still ask the high court to review the case.

Honolulu attorney David Rosen said he has plaintiffs for a lawsuit to challenge the admissions policy. He said the settlement does not affect his case. Rosen said he expects the suit will be filed this year.

Goemans said Grant received 40 percent, or $2.8 million of the $7 million. Goemans said he is preparing to file his own lawsuit seeking to recover a "reasonable percentage" of the $7 million for his work in the case.

Goemans said he found the unnamed student and arranged for Grant to be the attorney for the student and his mother.

"I put the whole thing together," Goemans said. "But for me there would not have been a $7 million payment."

The student never was admitted to Kamehameha Schools because his case was pending. He has since graduated from high school and had been attending college, Grant said last year.

http://starbulletin.com/2008/02/09/news/story02.html

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February 9, 2008

Amount of settlement
raises critical concern

By Robert Shikina, rshikina@starbulletin.com

Supporters and critics expressed surprise yesterday at the $7 million Kamehameha Schools paid a student to settle a lawsuit disputing its Hawaiians-first admission policy.

One Kamehameha Schools alumnus says disclosure of the settlement with the anonymous, non-Hawaiian student will prompt questions among Hawaiians.

"I'm not happy with $7 million," said Kamehameha Schools alumnus Jan E. Hanohano Dill. "Unfortunately, that's a lot of money, and it's going to create a lot of questions in the Hawaiian community whether it was right or wrong and to continue."

Dill, also a board member of Na Pua a Ke Ali'i Pauahi, a nonprofit group whose members include students, parents, and alumni of Kamehameha Schools, said he continues to support the school's decision.

"I don't know the details, and I think that's something that has to be cleared," he said. "You settle because you want to avoid costs that would be incurred as you go forward."

He added, "I have to believe that they understood that this was something good for the Hawaiian people. ... It will be clear as things unfold whether that was true."

Dill, who is also president of the nonprofit Partners in Development Foundation, said the admissions policy must eventually be addressed and that the settlement avoids this case but does not stop other cases.

Marion Joy, former vice president of Na Pua, called the settlement a "misuse of trust funds."

"The trust is continually going to be challenged," she said. "This is not going to be the last. ... As far as settling for the particular lawsuit, it's not in the best interests of the beneficiaries (of the 1883 will of Princess Bernice Pauahi Bishop)."

Kamehameha Schools declined comment.

Honolulu attorney David Rosen, who has sought potential clients to sue Kamehameha over its admissions policy after the settlement, sent out a statement yesterday that said the $7 million settlement was used to "buy off this case."

He added that the trustees should open a campus on the Leeward Coast of Oahu and possibly Molokai where increased educational opportunities are needed.

H. William Burgess, a retired attorney and founder of Aloha for All, a group opposed to Hawaiian sovereignty, said the settlement raises questions about the proper use of the trust funds.

"Normally, trustees, if they're doubtful about doing something, they ask the court to give them instructions," he said. "Yet in this case, the biggest charitable trust, probably in the nation, instead of welcoming the opportunity to get the highest court in the land to settle it, they pay $7 million to leave it open. And it is very much open."

http://starbulletin.com/2008/02/09/news/story03.html

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April 8, 2005

Conflict alleged in Aloha Air case

By Dan Nakaso, Advertiser Staff Writer

The U.S. Trustee's office yesterday challenged the selection of the Case Bigelow & Lombardi law firm to represent the creditors in Aloha Airlines' bankruptcy case, saying the Bishop Street firm has a conflict of interest because it once represented Aloha.

Case Bigelow & Lombardi and a Park Avenue-based law firm, Otterbourg, Steindler, Houston & Rosen PC, applied in February to jointly represent the official committee of unsecured Aloha creditors. But Case Bigelow failed to disclose that it had issued opinion letters on Aloha's behalf in 2000 regarding loans made by First Hawaiian Bank, according to the U.S. Trustee's motion.

The office of the U.S. Trustee represents the federal government in bankruptcy proceedings and argued in its motion yesterday that Case Bigelow's "failure to disclose its direct conflict of interest in representing the interests of its client, the (creditors) committee, disqualifies it as counsel. ... The committee should not be represented by a party with a direct financial stake favoring an outcome against the committee's interests."

Case Bigelow has filed subsequent disclosure statements about its past relationship with Aloha, according to the U.S. Trustee's motion, but "it appears that the firm still falls short of providing full and forthright information."

Case Bigelow attorney Ted Pettit, who filed the motion to employ Case Bigelow in the case, did not return telephone calls yesterday.

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December 11, 2005

Former shareholders sue
Steve Case, Grove Farm

By Cynthia Kaneshiro - The Garden Island

Members of the Wilcox family filed a civil suit claiming that they were allegedly "duped" into selling their Grove Farm shares to America Online co-founder Stephen Case for a fraction of the company's value.

In the lawsuit, the family members allege that Grove Farm's attorneys and members of its board of directors "betrayed Grove Farm from within" to ensure that Case, the son of the managing attorney of Grove Farm's law firm, could buy the company for $26 million in December 2000.

The Wilcox family members seek a jury trial at which they hope to be awarded compensatory damages of $750 million, plus punitive damages of $2 billion against Case, punitive damages of $2 billion against leaders of the company's law firm, and $2 billion in punitive damages against members of the company's board of directors....

In a statement sent to The Garden Island, Case's attorney, Paul Alston, responded to the lawsuits.

"These two new lawsuits recycle old and unfounded allegations against Steve Case and his companies. The merger between Grove Farm and Steve Case's company was approved by almost 99 percent of the shareholders — including the plaintiffs in these lawsuits — in a process that was thorough and appropriate," said Alston.

"This new challenge, brought by a few disgruntled investors who apparently have a bad case of sellers' remorse, has no merit. Mr. Case looks forward to being fully vindicated by the courts in both cases."

Warren Haruki, president and chief executive officer of Grove Farm, also responded by e-mail to queries from The Garden Island.

"Steve Case's investment in Grove Farm has been instrumental in solving Grove Farm's financial problems, and in helping us build a future that will be good for both the company and Kaua'i as a whole. We are truly grateful for his commitment, his vision, and his investment," said Haruki....

"This lawsuit, filed by a few disgruntled shareholders, has no merit," said Haruki. "Nonetheless, Steve and Grove Farm will have to divert the time and resources to deal with it. However, we are confident that, in the end, the shareholders' arguments will be rejected by the court."...

According to the lawsuit, the plaintiffs in the case controlled approximately 61,000 shares of Grove Farm, or more than 36 percent of the 171,126 shares of outstanding stock.

The lawsuit claims that leaders of Grove Farm's law firm allegedly represented both the seller and the buyer.

"Just as a person playing both sides of a chess match decides whether white or black wins, a lawyer representing two sides with directly conflicting interests controls who will come out on top," the lawsuit says.

According to the lawsuit, the Wilcox family members allege that attorneys in the firm Case Bigelow & Lombardi helped Case buy Grove Farm.

According to the lawsuit, in 1999 and early 2000, Scott Blum, the son-in-law of Grove Farm's President and Chief Executive Officer at the time, Hugh Klebahn, allegedly attempted to take over the company with help from within.

The lawsuit alleges that a series of letters were ghost-written by attorney James Cribley and sent to Grove Farm shareholders over the signature of Klebahn and director Randal Moore in 1998, 1999, and 2000.

The lawsuit claims that the shareholders were allegedly led to believe that the company was "in dire financial straits."...

The Wilcox family members allege that the younger Case "picked up and finished off Grove Farm." They allege that he was "fed insider information by his father and by the company's CEO."

The lawsuit claims that, after the sale, the Wilcox family members found out that the fair market value of the company's 21,600 acres after debt was "in excess of $26 million," and that the true value of the company was concealed.

Members of the Wilcox family in their lawsuit allege that they were not informed of a Bank of Hawaii appraisal that was done four months before shareholders voted to sell the company. That appraisal estimated Grove Farm's land to be worth $152 million.

According to the lawsuit, the Wilcox family members allege that Case was given the appraisal, and used it in considering whether or not to buy Grove Farm.

The lawsuit alleges that members of Grove Farm's board of directors did not get the highest dollar amount for the company, and that board members misled shareholders about the company's financial standing.

According to the lawsuit, the Wilcox family members allege that Grove Farm's chief executive officer conspired with attorney Daniel Case, with other Grove Farm attorneys, and with Stephen Case, to defraud shareholders into believing that $152 per share was the highest price that could be attained, when another, superior offer was made at $170 per share.

The Wilcox family members claim that Case profited from the sale by "liquidating Grove Farm in earnest." According to the lawsuit, Case recently sold Kukui Grove Center for $63 million, and received about $26.5 million for selling 88 lots in a Lihu'e-Puhi housing project.

The family members point out that Case may expect about $54.3 million more after another 191 lots were recently put on the market.

In 2003, according to the lawsuit, Grove Farm leaders sold 10 acres to officials at The Home Depot, and brought in $10 million to $20 million to Grove Farm.

"After reaping some $150 to $200 million from selling off bits of Grove Farm, Stephen Case still has over 20,000 acres of land in Grove Farm," the lawsuit says.

According to the lawsuit, the Wilcox family members believe that the remaining land is worth at least another $1 billion.

The Wilcox family members allege in their lawsuit that they were led to believe that, over the course of 1999 and 2000, the company "was on the brink of insolvency."

They claim that the board members allegedly withheld information for the purpose of having the shareholders vote in favor of selling the company....

Cynthia Kaneshiro, staff writer, may be reached at 245-3681 (ext. 252) or ckaneshiro@kauaipubco.com

Read the full story at...

www.kauaiworld.com/articles/2005/12/11/news/news02.txt

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James Cribley is expected to testify regarding Defendant’s claims against Kamehameha Schools and P&C Insurance Company for fraud, bad faith, unfair claims practices, failure to defend claims, money laundering, racketeering, tax evasion, and other wrongful acts.

James Cribley is also expected to testify regarding his business, professional, political and personal relationships with Dan Case, Judge Alan Kay, Judge David Ezra, Ray Fuqua, Judith Neustadter Fuqua, Jeffrey Case, Aon, Steve Case, Stephanie Case, The Nature Conservancy, Judge Barry Kurren, Faye Kurren, John Marshall, Aloha Airlines, Colbert Matsumoto, Earl Anzai, Lyn Anzai, Linda Lingle, Bob Awana, James Nicholson, Carol Muranaka, David Farmer, Ron Poepoe, Rocco Sansone, Denys Kazama, Marsh Management Services Inc., Dee Jay Mailer, Louanne Kam, Colleen Wong, Nathan Aipa, Edwina Clarke, Clyde Mark, Robin Campaniano, AIG, Wayne Metcalf, Rey Graulty, J.P. Schmidt, Matt Tsukazaki, Robert Katz, Torkildson Katz Fonseca Jaffe & Moore, Kenneth Hipp, Marr Hipp Jones & Wang, Jeffrey Sia, Ayabe Chong Nishimoto Sia & Nakamura, Chubb Group, XL Insurance Company, Susan Tius, Rush Moore, LLC, Judge Robert Faris, Judge Kevin Chang, Sam Pryor, DuPont, Mark McConaghy, PricewaterhouseCoopers, Prudential Insurance Company, John Garibaldi, Hawaii Superferry, Ben Benson, James B. “Jim” Nicholson, Ed Case, Robert K.U. Kihune, Paul Alston, James Ahloy, Aloha Petroleum, Ron Rewald, Hillary Clinton, and others to be named upon discovery.