David C. Farmer vs. Harmon - Witness Clyde Matsui

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

CLYDE K. MATSUI

Matsui Chung & Sumida
737 Bishop Street, Ste 1400
Honolulu, HI 96813

Fax: 808-599-2979

Clyde Matsui is a Director in the law firm of Matsui Chung Sumida & Tsuchiya; court-appointed Special Master for investigation of insurance coverages of Kamehameha Schools/Bishop Estate and P&C Insurance Company in EQ2048, the Attorney General’s lawsuit to remove the Bishop Estate Trustees; Court-appointed Mediator and Discovery Master in Hawaii’s anti-trust lawsuit against the major oil companies; mediator in City & County of Honolulu’s condemnation lawsuit of Waimea Valley.

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NEW DISCOVERY (11-24-08): New Exhibit: “EQ 2048 - Deposition of Lokelani Lindsey taken on November 4 & 9, 1999". This document provides clear evidence that J. Douglas Ing had multiple conflicts-of-interest in this case and, since he was not a named Defendant in my RICO lawsuit against the former Trustees, he was not a legitimate signatory to the Settlement Agreement: Furthermore, since the Settlement Agreement was NOT SIGNED by any of the five Trustees actually named as Defendants, the Settlement Agreement was not legal or valid. (See Exhibit A)

http://www.kycbs.net/Lindsey-docs-Vol-1-p1-4.pdf

http://www.kycbs.net/Lindsey-docs-Vol-1.pdf

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NEW DISCOVERY - (06-29-08):

May 29, 2008

UNIVERSITY OF HAWAII ATHLETICS

June Jones-UH dispute heads to mediation

Star-Bulletin staff

The University of Hawaii and former football coach June Jones will attempt to resolve a contract dispute through mediation.

UH is seeking payment of $400,008 from Jones due to a clause in his final UH contract that called for the penalty if he left the school prior to the end of his five-year deal. Jones resigned to take the head coaching job at Southern Methodist in January, close to six months before the contract was to expire.

The process began yesterday with a pre-mediation meeting. Mediation begins June 9 with Clyde Matsui, a prominent local attorney, serving as the mediator.

Jones' contract stipulated that disputes would be resolved through arbitration. But UH spokesman Gregg Takayama said Jones' representatives suggested going to mediation and the school agreed. The matter will go to binding arbitration if the parties are unable to reach an agreement.

Jones' agent, Leigh Steinberg, has contended that Jones and former athletic director Herman Frazier had a verbal agreement that the coach would be free to accept another job without penalty. Jones' contract states that "terms between the parties may be amended only in writing signed by both parties."

http://starbulletin.com/2008/05/29/sports/story01.html

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NEW DISCOVERY - (06-29-08):

May 5, 2008

Rivals in dispute summon Matsui

By Ken Kobayashi, Star-Bulletin

Honolulu mediator Clyde Matsui was among a roomful of lawyers in an antitrust case when a mainland attorney suggested that one reason they were having problems was that Matsui did not know what the lawyer meant when he used the term "oligopoly."

Matsui asked the attorney whether he meant it in the context of the Sherman Antitrust Act, Section 2, as it was used against railroad companies and later the cigarette industry when six or fewer sellers supply 75 percent of more of the market.

"Is that what you're talking about?" Matsui asked.

The lawyer cleared his throat. "Yes, sir."

Matsui then told the lawyer he wanted to say three things so they would not get distracted again: First, Hawaii has law books; second, Hawaii will soon get computers.

"And No. 3," Matsui recalls that he told the lawyer, "you condescend to me one more time, you're leaving this process, and it might not be through the door."

Matsui, 60, a lawyer who specialized in civil cases, is regarded in the legal community as one of Hawaii's top mediators and arbitrators who are part of a growing industry to help resolve court cases and avoid costly and oftentimes emotionally draining litigation.

His detractors suggest that he can be too blunt and too impatient, but Matsui has handled hundreds of cases and his track record shows major successes.

Matsui's supporters believe that he is effective because he is bright, does his homework, knows how to close deals and focuses on the critical issues. Some also see similarities with Wallace Fujiyama, a prominent Honolulu lawyer who died in 1994 and was known for his unabashed support of local culture and local people.

"He certainly is a local boy, but, like Wally, he's a very sophisticated local boy," said Honolulu lawyer David Fairbanks, also considered one of the best mediators and arbitrators in town.

"I think he is very loyal to the local practice of law. That's not to say people from the mainland are treated differently or less fairly, but Clyde is mindful of his roots and what we have here."

In a recent interview, Matsui acknowledged that he strongly supports Hawaii's lawyers.

He said he finds some pleasure in deflating egos of mainland attorneys who think they are more worldly and wise than Hawaii lawyers "stuck in the middle of the Pacific with law degrees from correspondence schools."

"I love when they come and I find one opportunity to dissuade them from that notion," Matsui said.

At the same time, though, Matsui said the mainland lawyer in the "oligopoly" anecdote later became the most helpful in getting the case settled.

It is no coincidence that Matsui's style reminds some of Fujiyama.

Fujiyama coached Matsui when he was 10 to 12 and played on a youth baseball team. Matsui said he talked a lot, and Fujiyama gave him the nickname "Lippy." He said during trips to the mainland, Fujiyama would insist that Matsui sit next to him and would talk throughout the flight.

"He contributed a lot to my formative years," Matsui said.

His parents, Jiro and the late Betty Matsui, also were huge influences with their "old school" philosophy. Although the father worked as a state research analyst and his mother as a secretary, the money had to be stretched to support Matsui, his two brothers and his grandparents, all living together in McCully.

Still, the parents, like many of their generation, valued education highly and sacrificed to send Matsui to Iolani School.

"They teach you not to disappoint them, no matter what you do. You don't shame the family in a small community like McCully. I guess through the years, you kind of learn what they taught you is not to disappoint yourself."

Matsui said he knows Fujiyama had pride of being raised humble, "local style."

"And I do, too," Matsui said. "I cherish that more than anything."

Matsui's first major mediation led to the settlement of the bitter dispute between the state and the former Bishop Estate trustees in 2000. Matsui's fellow mediators were David Fairbanks and Jim Duffy, now an associate justice of the Hawaii Supreme Court.

Other major cases followed. Today, Matsui's law firm has eight lawyers.

Matsui said he currently has about 14 pending arbitration and mediation cases, including one involving a major Mapunapuna landowner suing the city and state over the constant flooding in the area.

The case reveals a commonsense approach Matsui is known to use in settling cases.

Matsui said the parties agreed to deal with the causes -- the tides, the overflow from Mapunapuna Stream and an abandoned waterline that was not plugged. Once the problems are fixed, they can start figuring out liability and money, Matsui said.

For the landowner, the sublessees will suffer less damage, and the property will be worth more, Matsui said. For the city and state, the flooding will end, and the repairs will cap any further liability.

The repair work will begin shortly, he said.

Matsui said this strategy was reached at their first meeting.

"The whole point is, you put the fix in front of the settlement rather than go mindlessly into the settlement of the case," Matsui said.

Matsui believes that as litigation becomes more expensive, mediation becomes the only "viable alternative."

He recalled that he settled one dispute between a private trust and its lessee, but not before each side spent "several million dollars" in attorneys' fees.

"I firmly believe that (mediation) will be the most important -- and greatly beneficial -- change in American jurisprudence since the early days of common law," he said.

While mediation is a way to save time and money, the parties will still need lawyers.

But Matsui said they do not necessarily have to hire mainland counsel.

"I get very irritated when people go for legal services in Hawaii and say, 'Ho, this is a big case. We better get a mainland law firm.'

"That's rubbish," Matsui said.

"To me, the lawyers we have here are exceptional, far better than big-firm lawyers who cannot see the end of the lawsuit and are preoccupied with the fighting."

It was during that "oligopoly" antitrust case, Matsui also recalled, that the mainland lawyers sat at the table, and their Hawaii co-counsels sat behind them along the walls.

"That kind of bothered me," Matsui said.

He told the group the local counsel should sit at the table and that the mainland lawyers should sit behind them.

When someone took it as a joke and laughed, Matsui told the lawyers he was serious.

"I deal with the (Hawaii lawyers) every day. I deal with you only when you fly into town, and then you fly back to wherever you came from and then I got to deal with (the Hawaii lawyers)," he said.

"So I want you guys to switch places."

With their mainland counterparts behind them unable to see their faces, the Hawaii lawyers sat at the table.

"They all had this Cheshire cat grin," Matsui recalled.

Matsui and mentor reconciled over a drink

Honolulu attorney Clyde Matsui had a falling out with the late Wallace Fujiyama that lasted more than a decade.

After graduating from Hastings College of Law, where he excelled as associate editor of the college's law review, Matsui declined to join Fujiyama's law firm.

Fujiyama, a prominent lawyer, was an outspoken advocate of local values and culture who used to visit Hastings and tell the Hawaii students to return and help the local people.

He also was Matsui's youth baseball coach.

Matsui instead joined a major downtown law firm.

Matsui said they did not talk for 11 years until a chance meeting in a bar. When Matsui was returning from the restroom, Fujiyama saw him.

"Eh, eh, come here," Fujiyama told him. "Sit down."

Matsui sat down.

"Eh, I hear you doing well," Fujiyama said.

"You must be talking to my mother," Matsui replied, "but I'm doing OK."

"No, no, no," Fujiyama said. "I hear you doing well."

Fujiyama then bought Matsui a drink.

"That's how we stated talking again, but it took 11 years," Matsui said.

Clyde Matsui

Age: 60

Education: Lunalilo Elementary, Iolani High School (1965 graduate), University of Hawaii and Pacific University (1969 graduate, Bachelor of Science in business administration), Hastings College of Law (1973 graduate)

Career: Private practice -- Jenks Kidwell Goodsill Anderson & Quinn (1973-1974), Kobayashi Watanabe Sugita & Kawashima (1974-1980), Law Offices of Clyde Matsui (1981-1982), Matsui Chung Sumida & Tsuchiyama (1982-now)

Wife: Joanne, since 1981

Hobbies: Avid golfer, 10.8 handicap; avid University of Hawaii fan, especially football; raising their beagle, Max

Quotation: "To me, to be a good mediator, you don't need intellect. You don't need legal scholarship. What you need is a good sense of how the world turns, and perseverance. If the parties feel that you're giving up on them, they'll never settle. I never try to give up on any case."

Settlement Cases

Honolulu lawyer Clyde Matsui has been involved in close to 1,000 arbitration and mediation cases. Here are some of the major ones:

» BISHOP ESTATE TRUSTEES. In 2000, Matsui, along with David Fairbanks and Jim Duffy, now a Hawaii Supreme Court associate justice, mediated the settlement that ended a three-year legal dispute of the state's lawsuit against five former Bishop Estate trustees. The settlement called for the estate's insurance coverage to pay $25 million, including more than $15 million to the charitable trust.

» GASOLINE ANTITRUST. The state alleged Hawaii's major gasoline suppliers and retailers violated price-fixing and other violations under the federal antitrust laws. In 2002, Matsui was the federal mediator in the settlement that resulted in $20 million going to the state.

» WAIMEA VALLEY. In 2006, Matsui was the mediator for a settlement that led to the $14 million purchase of Waimea Valley from the landowner. The deal preserves the 1,875-acre valley. It called for the Office of Hawaiian Affairs to get title of the land and the Audubon Society to operate the Waimea Valley Audubon Center in the valley. The money would come from the Army ($3.5 million), OHA ($2.9 million), the state Department of Land and Natural Resources ($1.6 million), the Audubon Society ($1 million) and the city ($5.1 million).

http://starbulletin.com/2008/05/05/news/story02.html

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NEW DISCOVERY (05/29/08):

May 29, 2005

UNIVERSITY OF HAWAII ATHLETICS

June Jones-UH dispute
heads to mediation

Star-Bulletin staff, Star-Bulletin

The University of Hawaii and former football coach June Jones will attempt to resolve a contract dispute through mediation. UH is seeking payment of $400,008 from Jones due to a clause in his final UH contract that called for the penalty if he left the school prior to the end of his five-year deal. Jones resigned to take the head coaching job at Southern Methodist in January, close to six months before the contract was to expire.

The process began yesterday with a pre-mediation meeting. Mediation begins June 9 with Clyde Matsui, a prominent local attorney, serving as the mediator.

http://starbulletin.com/2008/05/29/sports/story01.html

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NEW DISCOVERY (05-30-08):

January 17, 2002

State settles oil
suit for 1%

The $2 billion action over
inflated gas prices finally
sputters out for a penny
on the dollar

By Tim Ruel, Star-Bulletin

The state has agreed to end its three-year price-fixing lawsuit against Hawaii's major oil companies in return for a $20 million settlement from the five firms still fighting the case, a payment that would be 1 percent of the roughly $2 billion the state had been seeking.

A deal in principle was reached between all sides yesterday after six months of mediation, said attorney Clyde Matsui, who served as mediator and discovery master in the suit. The companies and the state must still negotiate specific points of the settlement, he said. Matsui would not comment on the specific amount of the settlement.

The settlement is about $20 million, according to a person familiar with the deal who requested anonymity. The amount could change in the final agreement.

The money comes on top of $15 million the state won in a settlement in 2000 with two companies, BHP Hawaii Inc. and Tesoro Petroleum Corp., which opted out of the suit and denied wrongdoing. Still contesting the case were Hawaii's market leader, Chevron Corp., as well as Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp.

"If it's $20 million, we all lost," said Frank Young, a former Chevron dealer and frequent critic of the company. Chevron sued in 1999 to evict Young from the Kakaako station operated by his company since 1953, and under a confidential settlement, Young abandoned the station on Tuesday. "I'm all depressed now," Young said.

He added that he hoped the state Legislature would react to the deal by discussing regulations for Hawaii's gas prices, which have long been among the highest in the nation.

"It is a settlement that I am a little disappointed in," Gov. Ben Cayetano said yesterday morning to reporters. "But it depends on the perspective of the judges." Local oil prices have gone down since the state filed the suit, Cayetano noted.

The state sued the companies in October 1998, alleging the firms secretly formed a conspiracy to milk profits from Hawaii's drivers by keeping prices artificially high. The firms denied the charges and said that the lawsuit, filed shortly before the 1998 gubernatorial election, was political.

The settlement comes at a significant point in the case, as senior U.S. District Judge Samuel King considers motions for summary judgment argued by the oil companies in hearings in November. In summary judgment a defendant seeks to dismiss entire counts, or even a whole case, on the basis that there is not enough evidence to warrant a trial. In rebuttal the state said it had plenty of evidence, including documents that showed officials at competing companies were sharing their local wholesale prices.

The state also said it had proof that Chevron, operator of one of two oil refineries in Hawaii, would sell gasoline to the other companies with the understanding that the firms would not seek better prices elsewhere, such as by importing.

Shortly before the November hearings, King ordered that the oil companies come up with a plan to open the summary motion documents to the public. The documents, like the bulk of filings in the case, have been under seal. The oil companies have argued that the information should be secret because many of the documents contain competitive financial information. In his order, however, King noted that much of the case rests on the extent of the profits the companies have earned from the Hawaii market.

All the documents in the case would eventually become available to the public, but the oil companies would have the opportunity to blot out specific pieces of information. It is not clear how much the companies would be able to redact.

It will be interesting to see how much information about the profitability of the companies becomes public, because the data could enrage people or mean nothing at all, said Tim Hamilton, a mainland petroleum analyst who has studied Hawaii's market. The whole point of an antitrust lawsuit should be to uncover a trail of collusion, Hamilton said.

"If these documents go public, the Legislature will have a trail to follow. The public will be upset even more than it is now, and there's a chance the Legislature will take an action," Hamilton said.

In March 1998, months before the state filed suit, the Star-Bulletin published a story with an analysis by Hamilton that said Hawaii consumers were overcharged more than $81 million for gasoline in the previous 14 months because of artificially high wholesale prices. At the time, Chevron and other companies said the analysis was simplistic and flawed.

In recent court filings, the state said that any potential damages from the suit would likely go to the state highway fund, not directly to consumers. The fund generally pays for road maintenance, but some money has been transferred to the state's general fund, according to records kept by the state Transportation Department.

The latest negotiations between the state and the companies began on Monday, a convenient time, since lawyers from all sides were in town for hearings on separate matters that had been scheduled this week, Matsui said. "This is the most intense 36 hours I've ever been through," said Matsui, who has handled mediation in lawsuits involving the former Bishop Estate and the Board of Water Supply. "We started off Monday with everyone hollering 'no.'"

The court ordered the state and the companies not to talk about details of the settlement until an agreement has been finalized, and representatives of both sides declined comment today. The settlement should be filed with the court soon for public review, and a hearing would be scheduled for King to sign off.

Because the state sued on behalf of Hawaii's residents, people will have the right to say they want to be excluded from the terms of the settlement, Matsui said. He noted that members of the public have rarely exercised that right.

The gasoline antitrust lawsuit

Key developments in the state's antitrust lawsuit:

>> March 1998: Gov. Ben Cayetano directs the state attorney general to determine whether an investigation of Hawaii's highest-in-the-nation gas prices is warranted.

>> Oct. 2, 1998: State files $500 million suit against Hawaii's two refineries and major gasoline wholesalers for allegedly overcharging local consumers for years. Named in the lawsuit are 13 corporations, including Chevron Corp., BHP Hawaii Inc., Shell Oil Co., Texaco Inc., Tesoro Petroleum Corp., Tosco Corp. and Unocal Corp.

>> March 14, 1999: Judge Samuel P. King rejects oil company motions to dismiss the state's antitrust suit.

>> March 25, 1999: State ups the amount of the lawsuit to $1.8 billion, saying the companies profited far more than first anticipated.

>> January 2000: BHP Hawaii Inc. and Tesoro Petroleum Corp. settle the suit and deny wrongdoing. They pay the state $15 million.

>> July 2001: The five remaining defendants -- Chevron Corp., Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp. -- file motions under seal seeking a summary judgment to dismiss the case.

>> November 2001: Judge King orders some court filings opened to the public and hears arguments over the motions for summary judgment.

>> Jan. 16, 2002: The state and five defendants reach a tentative settlement for a reported payment of $20 million.

http://starbulletin.com/2002/01/17/news/story1.html

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New discovery (May 30, 2008):

May 5, 2008

Rivals in dispute summon Matsui

By Ken Kobayashi, Star-Bulletin

He might be the most influential person you've never heard of.

Behind the scenes and with little fanfare, one of Hawaii's top mediators has settled hundreds of court fights, including several major lawsuits.

Clyde Matsui helped settle the bitter dispute between the state and former Bishop Estate trustees in 2000, and mediated the 2006 settlement that resulted in the purchase and preservation of Waimea Valley.

In the growing field of mediation and arbitration, Matsui brings to the table a sharp sense of the key issues and works to get the parties to settle without costly and time-consuming litigation....

http://starbulletin.com/2008/05/05/news/story02.html

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FOR IMMEDIATE RELEASE January 13, 2006

Release M-4-06

HANNEMANN PRAISES WAIMEA SETTLEMENT

Mayor Mufi Hannemann today hailed the out-of-court agreement that will allow a consortium of government and public interest groups to purchase Waimea Valley on Oahu’s North Shore for $14 million.

“This historic agreement will allow us to preserve one of the most pristine and treasured ahupua‘a on Oahu for future generations,” said Hannemann. “The community spoke with one voice about the need to preserve and protect Waimea, and we’re confident this agreement will allow us to do just that.”

The settlement was mediated by Clyde Matsui and calls for landowner Christian Wolffer to convey to the Office of Hawaiian Affairs all 1,875 acres that make up Waimea. The City will obtain a conservation and public access easement in perpetuity over the Waimea Valley lands.

Participating in the purchase are:

· The City and County of Honolulu, $5 million

· U.S. Army (through the Trust for Public Land), $3.5 million

· Office of Hawaiian Affairs, $2.9 million

· State Department of Land and Natural Resources, $1.6 million

· National Audubon Society, $1 million (advanced by OHA).

“We want to thank all of them for coming up with real financial commitments to ensure Waimea remains undeveloped,” said Hannemann. “I asked them to show me the money, and they did.

“We’d like to thank Haunani Apoliona, chair of the OHA board of trustees, and OHA administrator Clyde Namuo, DLNR Chairman Peter Young as well as the National Audubon Society and the City Council,” said Hannemann.

“In particular we’re grateful to Colonel Howard Killian, commander of the U.S. Army Garrison Hawaii, and Josh Stanbro (represented today by Tim Johns), Hawaii project manager of the Trust for Public Land. When it appeared we were going to come up short of the funds necessary to acquire Waimea, I contacted both the Army and the Trust for Public Land to see if they would be willing to bring additional funds to bear, and they most certainly delivered. Both organizations partnered with us in the Pupukea-Paumalu acquisition that we announced just last week. I want to make it very clear that we are indeed grateful to them, especially to the Army. In addition to protecting our freedom and providing jobs for our economy, the Army has taken an active role in protecting and preserving the ‘aina,” the mayor said.

“In addition, we are grateful to Mr. Matsui for mediating this settlement and Mr. Wolffer and his attorney, Bill McCorriston, for their willingness to negotiate,” Hannemann said. “Most of all we thank those members of the public who spoke up.”

Wolffer acquired the valley, including Waimea Falls Park, in 1996. In 2000, he offered it for sale at $25 million, which he later lowered to $19 million. Wolffer filed for bankruptcy protection in 2001. The City moved to condemn the valley and took possession of it in 2002. At the same time, the City deposited $5.1 million in court as condemnation proceedings began.

Saying the land was worth far more, Wolffer filed pleadings to contest the city’s condemnation. Last year, a tentative settlement was reached that would have allowed the City to acquire the lower 300 acres of the valley, including Waimea Falls Park for the $5.1 million it had deposited with the court for the lawsuit, while Wolffer would have kept the remaining 1,575 acres, where he sought to developed as many as eight private homes.

In the face of vocal public sentiment to preserve the valley, the City Council rejected that tentative settlement last month.

Mayor Hannemann began negotiations with all parties involved to reach today’s settlement. Court proceedings on Wolffer’s lawsuit were scheduled to begin on February 13.

The City will not pay a single penny more than the $5.1 million it originally set aside in 2002 to obtain the valley from Wolffer, said the mayor.

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September 16, 2000

EX-TRUSTEES SETTLE
WITH KAMEHAMEHA

The charitable trust will get
most of an insurance policy
worth $25 million

By Rick Daysog, Star-Bulletin

Signaling the end of a three-year legal battle, the attorney general's office and the five former trustees of the Kamehameha Schools have reached an agreement calling for the charitable trust to receive a huge chunk of a $25 million insurance policy.

Yesterday, the state and ex-board members Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Oswald Stender and Gerard Jervis signed a so-called global settlement, averting a costly trial which was scheduled to begin Monday and paving the way for continued reforms at the 116-year-old trust.

"This is about going forward. We recognize the need to hold people accountable, but we need to go forward," said Jan Dill, vice president of the 3,000-member Na Pua a Ke Ali'i Pauahi, a parent and alumni group that protested the former trustees' stewardship of the trust.

"This is not about vindication; this is not about getting back with anybody."

Many of the details of the settlement remain under seal and will not be available until next week. But Clyde Matsui, probate court-appointed discovery master for the state's suit, confirmed previous news reports that the trust's entire $25 million insurance coverage will be consumed by the pact.

The deal also will provide about $1.3 million for the attorney general's office for its costs and up to $4 million in legal fees that have already been paid for by the ex-trustees. The estate will receive more than $15 million to cover the alleged mismanagement of trust assets.

Matsui said the settlement will not pay the legal bills for the criminal cases involving former trustees Peters and Wong. Both Wong and Peters were indicted on theft and related charges for their alleged personal involvement in a trust land deal. The theft charges were overturned but have been appealed. Wong also faces a perjury charge.

Matsui would not say whether the settlement will cover any potential claims sought by the Internal Revenue Service against the former board members.

The agreement -- which will be submitted to the state Probate Court for approval -- was disclosed after a one-hour chamber conference involving Matsui, Probate Judge Kevin Chang, Circuit Judge Eden Elizabeth Hifo and lawyers for the estate, the ex-trustees, the attorney general's office and estate insurer Federal Insurance Co.

Two interim trustees of the estate -- retired Adm. Robert Kihune and attorney Ronald Libkuman -- and lawyer David Fairbanks, the court-appointed mediator in the legal dispute, also attended the meeting.

All referred questions to Matsui.

In its surcharge suit, the state alleged that the former board members took excessive compensation, mismanaged the trust-run Kamehameha Schools and incurred more than $200 million in investment losses. All five resigned last year in the wake of an IRS threat to revoke the estate's tax-exempt status.

The settlement comes as the estate is embarking on major reforms of its operations. The trust is in the process of implementing a strategic plan in which it will increase its annual spending on educational programs from about $150 million to $200 million.

That expansion includes the construction of permanent satellite campuses on the Big Island and Maui as well as the restoration of many of the outreach programs eliminated by the former board.

Earlier this year, the trust hired longtime educator Hamilton McCubbin as its first chief executive officer and implemented a single-voice management system to replace an often-criticized lead trustee system in which each board member operated like a chief executive.

"The situation is vastly improved and seems to be headed in the right direction, and there's every reason to be optimistic," said Randy Roth, University of Hawaii law professor and co-author of the 1997 "Broken Trust" Star-Bulletin article which prompted the state to open its investigation.

"This is an important milestone and shows that the legacy of Pauahi is in good shape today."

For Dill, a 1961 Kamehameha School's graduate, the past controversy underscores the continued need by members of the Kamehameha community to critically examine the trust's direction. Many of the reforms, he added, will not work unless the trust rids itself of the culture of controversy that has blanketed it for the past four or five years.

"History has taught us that without a clear and persistent questioning of what's going on, the legacy gets thrown in the back seat," Dill said.

Bishop Estate Archive

Kamehameha Schools

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http://starbulletin.com/2000/09/16/news/index.html

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CLYDE MATSUI PHOTO GALLERY

http://www.waimeavalley.org/index-original.html

http://starbulletin.com/2008/05/05/news/story02.html

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October 14, 1999

NEWS BRIEFS

Peters fails to show at scheduled deposition

Ousted Bishop Estate trustee Henry Peters failed to show up for his scheduled deposition this morning.

Earlier this week, court-appointed discovery master Clyde Matsui ordered Peters to appear for a deposition to answer questions relating to the Dec. 13 trial over the permanent removal of Peters and Richard "Dickie" Wong.

But Peters' attorney, Renee Yuen, argued that her client didn't have to attend the deposition because he recently was taken off the witness list for the trial.

A hearing before Matsui is scheduled for this afternoon.

In August, the Bishop Estate's interim board sued for Peters' and Wong's permanent removal after the Internal Revenue Service threatened to revoke the estate's tax-exempt status. Earlier this year, Probate Judge Kevin Chang removed Peters and Wong on a temporary basis.

Bishop Estate Archive

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LETTERS TO THE EDITOR

Honolulu Star-Bulletin

Bishop interim trustees deserve thanks

"Unsung" so aptly describes the accomplishments of the interim trustees of the trust estate formerly known as Bishop Estate and now known as Kamehameha Schools. They are Adm. Robert Kihune, the Rev. David P. Coon, former Honolulu Police Chief Francis Keala, banking executive Constance H. Lau and attorney Ronald D. Libkuman.

During the recently concluded mediation and settlement process, these five were called upon numerous times to make difficult decisions which greatly affected, and will continue to affect, the future of the trust and the welfare of its beneficiaries.

Distinguished among them is Libkuman, who served as the spokesperson for the group and participated in the process on a daily basis -- routinely continuing late into the night. The success of the mediation process is in large measure related to his efforts.

The pre-determined term of the interim trustees expired with the turn of the year. Kihune and Lau will continue to serve as permanent trustees, while Keala, Coon and Libkuman will move on to other pursuits.

To all five who served so ably and unselfishly: 'Owau me ka ha'a ha'a e mahalo nui loa.

To the departing three: Aloha pumehana.

And, to the remaining two, soon to be joined by three new faces: Imua Kamehameha.

Clyde Matsui, Jim Duffy and David Fairbanks

Editor's note: Clyde Matsui was the court-appointed discovery master in the state's lawsuit against the five former trustees of the Kamehameha Schools. Jim Duffy and David Fairbanks were court-appointed mediators in the case.

Bishop Estate Archive

Kamehameha Schools

http://starbulletin.com/2001/01/19/editorial/letters.html

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November 16, 2002

ERS gets OK to join lawsuit

A Circuit Court judge yesterday granted the state Employees' Retirement System's motion to join a police union's $350 million lawsuit against the state over its withholding of contributions to ERS' pension fund.

However, Judge Gary Chang said in allowing ERS' intervention that he wanted formal notice to be given to Kauai, Maui and Hawaii counties that they have the opportunity to participate in the suit with the current defendants. Last month, the court allowed the City and County of Honolulu to join the state in defending the suit.

The schedule for the case is now being reset with the Nov. 26 motion to certify a class action likely to be rescheduled.

"I'm obviously very happy the motion was granted and I look forward to having the ERS fully participate in the litigation (with the State of Hawaii Organization of Police Officers)," said Special Deputy Attorney General Jim Duffy, ERS' lead attorney.

Attorney Clyde Matsui, who is representing the state, said he believes ERS eventually will side with the state's contention that it was constitutional for the state to divert $346.9 million from the fund for budget purposes as long as the pensioners are ultimately paid what they are due.

"Although the ERS has intervened as a plaintiff, it remains to be seen whether ultimately they will align with the position of the plaintiffs or the position of the state," said Matsui, who had opposed the ERS' intervention. "From the standpoint of practicality, it's good to have ERS in the judicial proceeding because the state expects to prevail and it would make sense for ERS to be bound by whatever the court should determine."

http://starbulletin.com/2002/11/16/business/bizbriefs.html

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Clyde Matsui is expected to testify regarding his investigation of the insurance coverages that Kamehameha Schools and P&C Insurance Company, Inc. maintained with Federal Insurance Co., XL Insurance, American Re, Hartford, and other carriers, which were provided through Kamehameha Schools and P&C’s insurance broker, Marsh & McLennan.

Of particular importance, Clyde Matsui is also expected to testify as to why XL Insurance Company did not pay any claims under their Excess Limits Liability policy which I had arranged through Marsh & McLennan for Kamehameha Schools/Bishop Estate and their for-profit subsidiaries – including P&C Insurance Company.