Cross-examine.

You want to put that back on the board, please. I want you to go right to the bottom. (Elmo adjusted.) CROSS-EXAMINATION BY MR. BAKER:

Now, in 1996, the total amount for autograph income Mr. Simpson has made is $600, right?

That's the only entry we were provided for '96, yes, sir.

And in your calculations, Mr. Simpson would make at least a million to a million and a half a year off autographs alone, not including memorabilia, correct?

I don't know one way or the other.

Well, you looked at Mr. Roesler's deposition, and you looked at his report, and you interviewed him twice in order to come to your opinions and conclusions relative to the largest entry on the balance sheet, that is the value of his name and likeness; isn't that true, sir?

That's correct. Yes, sir.

And you saw where Mr. Roesler said that Mr. Simpson's name and likeness, and he categorized it in terms of income, that he would earn a million to a million five a year off autographs alone; isn't that true, sir?

I understand that's one of the things he took under consideration, yes, sir.

That's totally contrary to what you've seen in terms of Mr. Simpson's autographs, is it not, sir?

It's contrary to whatever I've been provided, yes, sir.

Can you get the other sheet out now.

(BY MR. BAKER) You reviewed Mr. Simpson's balance sheets, correct?

Yes, sir. Taking into account the fact that the word "reviewed" means certain things to accountants, I've not reviewed it in the sense of a particular use of that term. But the way most people use the term "reviewed," I have reviewed it.

All right. And you reviewed his factual balance sheet, that is before balance sheets were ordered, written for his assets relative to this trial, correct?

Yes, sir.

Okay. You can take that down, Steve. (Elmo adjusted.)

(BY MR. BAKER) Did you see in any balance sheet that Mr. Simpson had prepared whether he was trying to get a loan, whether he was preparing -- having his accountants and business manager prepare a balance sheet, or a statement of financial condition for internal purposes, did you ever see one entry for name, likeness, and trademark?

No, sir, I did not.

Not a single one, even when he went to the bank, correct?

That's correct.

And that is what you have included in a summary of his financial condition, and that was never in Mr. Simpson's history, as an individual, included in his financial condition, as far as you are aware, true?

That's correct. Yes, sir.

And let's take it one step further. The present value of the NFL pension of 175, 5, that was never included at all by condition, was it?

That's correct.

And, in fact, if Mr. Simpson doesn't live to be 55 or live out another 24 years, he may never get one cent of that, correct?

It depends on when he passes, that's correct.

And although you have included 175, 5 as a present value of his pension that's not a salable asset because it's speculative whether he'll ever collect 5 cents of that; isn't that true, sir?

Let me correct --

Can you answer my question?

Yes, sir, I can.

Then answer it.

It's not speculative in that we do have statistics which tell us what the average life span of a person 50 years old is. And those are used as the basis for financial measurements every day of the year.

That isn't an asset that a bank's going to loan money on because there's no guarantee, of course, that Mr. Simpson will ever collect 5 cents on it; you would agree with that?

If he passes before he's age 55 he will collect nothing. If he lives more than 24 years, of course, he'll collect far more.

Maybe you didn't understand the question. Let me ask it again. That is not an asset that a bank would loan money on because it's not -- it's a contingent asset; isn't that true, sir?

Depends on the terms of the amortization. They will take into account income and that is a source of income.

All right. In terms of the 24,800 -- $24,880,568, that is basically his entire net worth?

It's a substantial part of it.

Well, it's about 90 percent of it, isn't it?

Yes, sir.

That is an item that is made up of a contingent income that Mr. Simpson may never see, correct?

I don't have an opinion one way or the other.

You know for a fact, Mr. Freeman, that you looked at Mr. Roesler's deposition, you looked at Mr. Roesler's report, and you know what the component parts of that are; isn't that true, sir?

Yes, sir, only by way of example.

Well, you know what Mr. Roesler said. He's sitting here in the court room. He said that Mr. Simpson will get a million to a million and a half a year on autographs alone, that he could sell at $50 a piece, 20 to 30,000 autographs, correct?

I would review the report to see that. I think that's one of the things he did consider, however.

And that he would have a book deal, that he had an income from movies an endorsements. That's all the component parts of the value of name and likeness, right?

I understand those are things he considered, yes, sir.

And did you look at a single piece of paper to determine what Mr. Simpson made in the last six months for selling his name and likeness?

I've summarized in the prior exhibit the information that you've given us, so that's all I've looked at.

Did you determine whether or not Mr. Simpson made over $600 for selling his name and likeness in the last six months?

I have no way of making any independent determination. I've only summarized what you've given me.

My point is, sir, if your numbers based upon Mr. Roesler's opinions are correct, Mr. Simpson should have made in the last six months at least a million 250 selling his name and likeness, for your numbers to be valid, correct?

That's not correct at all, no, sir.

Well, you have taken an amortized -- as I understand your testimony, you have taken as an average that he will make $2.5 million per year selling his name and likeness, correct?

That's correct.

And if you have variation of that 2.5 million -- it could certainly be, for example, one year make 3 million, one year make 1 million, et cetera, correct?

That's correct.

And you have figured out that in coming to your opinions and conclusion for 90 percent of what Mr. Simpson's financial value is, or financial worth is, you have averaged that he would make 2.5 million, correct?

That's correct.

And do you know -- have you looked at any piece of paper to determine whether Mr. Simpson ever, when he was working for Hertz, NBC, and his image was not tarnished at all, had he ever made $2.5 million?

I don't know one way or the other.

Well, wouldn't it be important for you, before you come on the witness stand, to tell this jury that he will have a value of $24,880,000 in the next 25 years, wouldn't it be important for you to determine what he had made in any given year, the highest amount that he'd ever made selling his name and likeness?

Well --

Would it be important, sir?

You never asked us for any of that information, did you, sir?

I asked counsel. You're right.

And you have never looked at one piece of paper relative to what his past earnings have been, have you?

No, sir, that's not true. In his loan application he listed his monthly income as $111,000 in '94, I believe. Maybe '93.

Now, did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?

Other than what you provided, and which we've summarized here, no, sir.

Let me read your deposition. Page 8, line 16 through 19.

Can you hold on one second, please.

Did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?

No, sir, I haven't.

(BY MR. BAKER) Now, that's what you testified to, correct?

That's correct.

And you still haven't?

That's correct. Other than to the extent that it's included in the income reported to the lending institution and, of course, the information that you most recently gave me.

Mr. Freeman, the information that you saw as income doesn't have any breakdown as to what the income was, whether it was for name and likeness, or anything, isn't that true, sir?

That's correct.

So you've never seen a piece of paper as to what Mr. Simpson has ever made based upon the sale of his name or likeness, correct?

Other than this most recent stuff that you've given us, correct.

And what he made in the whole calendar year of 1996 was $600, right?

And of the two prior years, slightly over a million.

Not on the sale of his name and likeness; is that true?

That's what autographs and memorabilia are about.

All right. Let's go back to these numbers. Now, Orenthal Productions has to be able to sell and to pay the loan, has to have income, correct?

That's correct.

It's your understanding that Orenthal Productions is, in fact, a solely owned corporation of Mr. Simpson's, correct?

Yes, sir. That's what I understand.

And it has no assets?

Has very few assets, merely a conduit.

It has no ability, unless Mr. Simpson can sell his name and likeness, it has no ability to pay Mr. Simpson; you would agree with that?

I would agree with that.

And so if, in fact, there's is no ability of Mr. Simpson to sell his name and likeness, it would be appropriate to value the loan that Orenthal Productions owes Mr. Simpson at $1; you would agree with that?

No, sir, I wouldn't.

All right. Now, under the Apollo residence, you saw the footnote on the Apollo residence, did you not, sir?

Yes, sir, I did.

There's the residence of Mr. Simpson's mother since 1969, correct?

That's what the footnote says, yes, sir.

And Mr. Simpson has indicated that he does not have a beneficial interest in that property, correct?

Other than the footnote, I don't know.

Well, you were advised that that's where his mother has lived for the last almost 30 years?

Yes, sir.

And she has the beneficial interest in that house?

I'm not prepared to make that legal conclusion.

Objection, argumentative.

Sustained.

(BY MR. BAKER) Now, you say a reasonable person would pay $25 million to Mr. Simpson for his name and likeness for the next 25 years, right?

That's correct.

And did you try to contact any reasonable person to see if there is a reasonable person alive who would pay $25 million to have sole exclusive rights of Mr. Simpson's name and likeness?

That's not the basis of my testimony.

Can you answer my question. Did you contact one person to see if they would pay anything for the name and likeness of Mr. Simpson, much less $25 million?

No, sir. That's not the basis of my testimony.

Do you know any banker who would loan $5 million on this purported $25 million value of Mr. Simpson's name and likeness? If so, name one; we'll call him and get him on the witness stand.

Objection, relevance, whether he knows anybody.

Sustained. It as argumentative. Ask a question.

(BY MR. BAKER) Do you know any banker who would loan $5 million based upon the $25 million value that you have placed on Mr. Simpson's name and likeness; a single banker?

Relevance, called for speculation.

Overruled.

I don't know any bankers.

(BY MR. BAKER) You don't know any bankers, as a CPA?

I don't know any bankers that are in that business.

You don't know a single person who would pay a million dollars for what you have based on adjustment in the value of his name and likeness in trademarks of $25 million; you would agree with that?

I haven't attempted to find anybody. I don't know whether I do or not.

And when you were retained, sir, you were retained to increase the value of Mr. Simpson's financial condition before this jury, and you understood that to be the goal that you had in being retained for the plaintiffs, correct?

Objection, argumentative.

Sustained.

(BY MR. BAKER) You were retained and you were instructed to increase the value of Mr. Simpson's financial condition, correct?

Absolutely not.

Never happened?

No, sir.

No. And let's go to the tax picture. So, as I understand it, based upon your figures, you think that Mr. Simpson has a net worth of 15,703 less 8.5 or 7.2 million, right?

It's 15 million 703. I'm not willing, at this point in time, to offer an opinion on the 8.5.

I don't understand. You don't have any problem offering an opinion on $25 million of name and likeness. You don't think --

Objection, speculative, Your Honor, argumentative.

You may rephrase that.

(BY MR. BAKER) You didn't have any problems basing your opinion on Mr. Roesler's report and your interview of him, that Mr. Simpson would earn 2 to $3 million a year for the next 25 years? You didn't have any problem with that?

That's correct.

But you have a problem reducing the 15, 703 by the $8.5 million verdict that this jury rendered on Tuesday; is that correct?

Not at all.

Okay.

That's not my testimony.

So then, the net adjustment to his net worth under your numbers is 7,203,529?

If you give cognizance to the entire $8.5 million, assuming that that is rendered as a just judgment, ultimately, yes, sir.

Now, let's go to taxes, your views of tax law.

What's the number of the calculation to adjustment to deferred tax?

2413.

You want to put that up, Steve.

(BY MR. BAKER) Let me ask you a question before we do that. Let's say that Mr. Simpson earned $50,000 a year for the next 10 years selling memorabilia, autographs. What's the cash value of that?

The present cash value of that would be probably -- how much did you say, 50,000?

Yes.

Probably something just slightly less than $250,000.

Around 240, 230,000; around that neighborhood?

Round numbers, yes, sir.

That would be contrasted to the adjustment that you have placed of $25 million, correct?

Yes, sir. That's correct.

And indeed, the $25 million adjustment assumes that Mr. Simpson will, right up to the day he dies, be making 2 to $3 million?

That's exploiting his name and likeness, and the trademarks that he owns, for the rest of his life, yes, sir.

Even when most of the people who are in the memorabilia market wouldn't have been alive when he ever played football, correct?

That may be true. I don't know.

All right. Now, can we put that 2413 up, please. (Exhibit 2413 displayed.)

(BY MR. BAKER) Now, under the vested pension plan of 4,121,479, if that was levied upon and removed from the pension plan itself, there is a 62.50 percent tax, right?

That's the tax including penalties, yes, sir.

So that this tax that was indicated in the balance sheet by Mr. Taft and Mr. Goodfriend is, in fact, an accurate indication that if that tax is removed currently, correct?

If in fact the pension plans are invaded and the money is distributed to Mr. Simpson, that would be an accurate reflection.

And that would indicate that the 712,307 is not an overstatement of tax liability if the pension plans are eliminated presently, true?

If the pension plans are invaded, the money removed, that's correct.

It's your opinion they just flat figured incorrect the May Medical Associates tax. And have you seen any documentation relative to May Medical Associates other than line items?

Other than?

The line items that are seen on balance sheets?

Yes, sir, I have. We have the K1 for 1994, and that's one of the sources of the inconsistencies in the information.

And you don't believe that Mr. Goodfriend, a CPA, would know more about the tax liability than you, who's been doing Mr. Simpson's taxes?

I don't know. He hasn't shared with us that information. I couldn't form a conclusion on that.

You didn't ask him, did you?

That's correct.

Now, on the deferred tax benefit offset on the attorney fees -- you want to move that up please, Steve. (Elmo is adjusted.)

(BY MR. BAKER) There has to be an income to take them off as a deduction, correct?

That's correct. Although business expenses can be carried over.

And that may or may not be construed as a business expense; you would agree with that?

Yes, sir, I would agree with that.

And so you have taken -- in your $1,310,229 deferred tax benefit, you have assumed two things: One, that Mr. Simpson has enough income to write off 2.8 million, and two, that the IRS would conclude that this is a business expense as contrasted to a personal expense, correct?

That's correct.

And if, of course, either of those premises that you have used are incorrect, your 1,310,229 is incorrect and invalid?

Well, if -- if the basis -- the hypothesis that one would use varies in any number of ways, the number will change, the computation is what it is.

Maybe you didn't understand my question and I'll ask it again. If in fact IRS didn't let you write off attorney fees on this case, that tax benefit is gone, correct?

It is gone. I would agree with that.

If there is not enough income to write off, the tax benefit is reduced by the amount of income that doesn't exist to the tune of $2.8 million, correct?

To the extent it's not carried over, yes, sir.

Now, you have been -- and, of course, in doing that is, in suggesting that Mr. Simpson has a $1,000,310 -- $1,310,000 deferred tax benefit, that would of course go to increase the value of his financial portfolio, correct?

That would increase the net of his assets less his liabilities, if you -- if that's where you're going.

And the same with the pension plan and the same with medical -- May Medical? In other words, all of the figures that you've done on calculation of adjusted deferred tax would go to increase the value of Mr. Simpson's net worth, correct?

They would reduce the $4,121,000 shown on the chart and therefore would increase the bottom line.

Now, you were talking -- discussing with Mr. Gelblum this 4,121,508 number, correct?

Yes, sir.

Now, that is a number that was a calculation for tax liability on liquidation, true?

That's correct.

Now, the number --

Excuse me. That's what it purported to be.

Well, that's what you took it as in terms of your opinions and calculations, was it not?

Yes, sir, I've used that as a basis for those corrections.

Oh. Now, normally when people have a summary of their financial condition, they don't include tax liability on liquidation; you would agree with that?

They would typically if they're assessing their financial condition not assume liquidation as you did in the case of the pension plan but would use the 45 percent as I have used.

The 45 percent is an income tax rate, is it not?

That's correct.

And when you were talking about reviewing Mr. Simpson's balance sheets before the balance sheets made for litigation, they did not have the liquidated tax liability on them, did they?

They didn't have any tax liability other than perhaps real estate taxes.

And it did list income on there. It listed was that the page -- what assets, what balance on the Rockingham estate, correct?

Well, that tax --

No, no. Listen to my question.

Well, you have a misunderstanding as to what's on the balance sheet.

Let's go through it and maybe you can help clarify it.

Okay.

On the condition of Mr. Simpson's financial summary -- Phil, get out the summary, okay. Blow-up is displayed.)

(BY MR. BAKER) Now, on the summary of financial condition, you have got assets, including what's in the bank, the partnerships and pension plans, personal furnishings, et cetera?

That's correct.

And you don't have, for example, what his income is estimated to be in the next year or the next 25 years, correct?

I don't have it?

You have it, but on the reports that you reviewed of Mr. Simpson in terms of his summary of financial condition, that existed prior to any report being generated for litigation, it listed what his assets were, correct?

That's correct, and his liabilities.

And it didn't list, for example, as I stated, it didn't list 25 years of what his income may or may not be, did it?

Or the present value of that, no, sir.

And it also did not include any taxes on liquidation, correct?

That's correct, or any taxes at all.

And the only other taxes would be taxes if in fact he made an income, which isn't listed on a summary of financial --

No, sir, that's not true at all.

Well, let's go back. You're certainly not in terms of an ongoing financial statement going to list taxes on liquidation; you would agree with that?

Well, I don't know what you mean by liquidation, but if by liquidation you mean the disposition of an asset, that's exactly what's listed.

That's what's listed after we were required to disclose his financial condition before litigation because they would -- those would have to be paid if in fact the assets were liquidated, you'd agree with that, you included this in your statements?

That's correct. I included it because it's a proper presentation.

And the point is that if, in fact, you have an ongoing enterprise such as Mr. Simpson and Orenthal Productions and you have no intentions to liquidate it at all, you don't put taxes on for that would be incurred in liquidation, correct?

That's correct.

So when the change occurred in his statement of financial condition, it included taxes that would be incurred upon liquidation; you would agree with that?

That appears to be the basis for some of the computation, yes, sir.

And so you would anticipate that if you're going to have a fire sale of Mr. Simpson's assets and he is going to have to liquidate assets, that his net worth is going to decrease because of the amount of taxes that are going to have to be paid, correct?

If even $1 in tax is paid, it would reduce his net worth, yes, sir.

In terms of -- for example, you talked about Rockingham and rollover provisions; remember that?

Yes, sir.

If you sell Rockingham, which has a cost of 1 million 4, and you sell it for three seven you're going to incur taxes unless you buy another house that's worth three seven, right?

That's correct.

If Mr. Simpson is forced to liquidate his house, he's not going to have any money to buy a house for $3.7 million, he's going to have to pay taxes between the one, four and the three, seven, true?

Objection, calls for speculation.

Overruled.

Depends on what he does with the proceeds.

(BY MR. BAKER) If the proceeds are used to satisfy a judgment, he has no money to -- based upon even your balance answer sheet, he has no cash to spend to buy another house; isn't that true?

In your summary of financial condition, you have included, as we indicated -- in other words, this number of $25 million, you would agree this number isn't available to Mr. Simpson to spend or to satisfy any judgment, is it?

If he were to enter into negotiations to sell the complete future value of his name and likeness and all his trademarks, it would be available to him.

If there were a buyer and he could sell it, obviously it's an asset that he could have control over, correct?

I agree with you.

The number you've put up there of $25 million, it assumes there is some reasonable person out there who would pay that kind of money for Mr. Simpson's name and likeness now throughout his lifetime, correct?

That's correct.

And if there is no such person who would pay $25 million, reasonable or otherwise, you would agree that amount of money is not available to satisfy any punitive damage claim, correct?

It depends on whether a person would buy certain portions of the rights, that's all of the rights that -- there could be movie rights, as you well know, and other types of rights, but taken to the extreme, if no rights could be sold at all, that money would go away.

And he would not have any of the 25 million to pay any punitive damage claim in that scenario?

That would be -- under that assumption, that would be correct.

And we have certainly not the 175,592 to pay any punitive damage claim if in fact a punitive damage claim is awarded by this jury in the next couple of days, right?

Last of that he would start receiving that in the year 2002, so he wouldn't be able to make the payment until 2002.

So that the levy of execution could come and he would have no money, basically $25 million that you've added into his net worth, to make any payment, would you agree with that?

If he didn't sell some or all of that, yes.

And as well, sir, if you remove those items and include the $8.5 million award of this jury on Tuesday, Mr. Simpson has a negative net worth, correct?

And being that he has more liabilities than he has assets, correct?

Has more listed liabilities than he has acknowledged assets, correct.

That concludes my cross.

MR. P. BAKER: You want this up (indicating to blow-up entitled "Summary of Orenthal Simpson Financial Condition")?