Now, Mr. Taft, when we adjourned we were talking about the proceeds from the honey-baked ham sale, Mr. Simpson's franchise of honey-baked hams.
Okay. And tell all the ladies and gentlemen of the jury where the proceeds of that sale went?
About 8 -- between 780,000 and 800,000 went to pay federal and state income taxes that were owed back in 1994 and the balance of the money was used in the normal course of business to pay business expenses, household expenses and some legal expenses related to experts and travel and other related expenses.
Well, the proceeds of that sale was paid by an insurance company for the full release of several policies under which Mr. Simpson was insured, to release all rights to defend and to indemnify.
Now, have we gone over basically all of the funds that Mr. Simpson has obtained from the sale of assets in -- the last large chunk of sale of assets in the last two and a half years?
Let's see. We talked about the New York condo. We talked about the honey-baked ham termination. We talked about the insurance settlement. In 1994, after June, there were some stock options that he owned and he exercised his option on those stock options and there were some revenues produced from those stock options which created some of the income taxes that were still due and owing that we were unable to pay, and so those would also fall in the area of sale of assets.
Okay. Now, did your working papers from the cost and expenses that you paid for Mr. Simpson as well as the income receipts that you got from Mr. Simpson and turn those over to an accountant to produce various statements of net worth on approximately a quarterly basis?
Well, it doesn't work exactly that way actually between my bookkeeper and myself, our computer at my office generates all the input that goes into keeping track of the expenses and the income and the assets and liabilities. Quarterly, we -- quarterly, we provide that to Marvin Goodfriend's office for possible adjustments in connection with the -- the accounting records as well as possible tax planning matters.
And then he reviews the statements and alters them in accordance with federal tax laws and generally accepted accounting principles?
If necessary he makes whatever required adjustments. I rely on his expertise in that area to advise us on that.
When you produced a statement of net worth as of December 31, 1996, does this document -- next in order, Erin. I'm sorry.
(BY MR. BAKER) Does his statement of net worth as of December 31, 1996, which was revised 1/31/97, does that truly and accurately reflect what Mr. Simpson's net worth is?
And is his real net worth, including the verdict rendered by this jury, a negative of $9,356,157?
All right. Let's go up and look at the current assets. The current assets as of December 31 were in the bank as well as this note due from Orenthal Productions, of $6,849?
You put that note at a dollar, and you saw this morning where Mr. Freeman had it at around -- I think it was $265,000.
All right, let me explain that. On Orenthal Productions' books, it does show a payable that is owed to Mr. Simpson, approximately 269,000. But 99 percent of Orenthal's income is O.J. Simpson. If he doesn't work, Orenthal doesn't make a dime. So if he doesn't work, Orenthal can't pay his bills. So it's only realistic that we put down there the real facts. That's why we call it a dollar.
Now, let's talk about Mr. Simpson's ability to work for a minute. Do you have an opinion based upon your being his business manager for 27 years whether or not Mr. Simpson currently has an ability to work?
For the last 12 months, and that's been since January of 1996, I've seen a gradual drying up of demand for O.J.'s services in every area. All the areas that was testified by Mr. Roesler, none of them really exist. That's pure speculation. And I saw it all drying up to where it's virtually nothing in terms of anything concrete on my desk at this time or any even meaningful negotiations at this time. There is zero. That was before Tuesday's verdict. Now, after Tuesday's verdict, I would say that it substantially impaired even the prospects that existed before the verdict.
KEY QUOTEAll right. Now, you saw where Mr. Freeman had listed $600 in income from autograph signing from 19 -- last six months -- or I think all of 1996. Do you see that?
Well, I was sitting over there. I heard you mention that. That didn't seem to track with my recollection.
Let me show you a document that was Mr. Freeman's and ask you to just look down on the calendar year of 1996 as to what he indicated was income to Mr. Simpson for autographs and memorabilia.
Objection. Didn't purport to be for all of 1996. That's the only 1996 entry on there.
For autographs and memorabilia. I'd prefer to ask my own questions, with your permission.
Well, it's not -- it's probably correct for the time frame that the schedule provides, which is July 8, 1994 to April 10, 1996, in which it shows a $600 entry at that time. That may be correct, because I -- we don't keep books from, you know, July of '94 to April of '96, so I -- I can't say whether that's correct or not. If you would like, I could tell you in a better way. I could tell you what we might have done in 1996, the last 12 months.
Okay. In terms of it drying up, has it dried up in the last 12 months; that is, income to Mr. Simpson?
Now, as you sit here today, sir, do the contracts that request Mr. Simpson services, do they come across your desk?
And do you review those contracts and then take them to O.J. and determine whether or not these contracts are going to be signed and whether he's going to get any money from any personal appearance or interviews or that sort of thing?
At the present time, is there any contract in existence or offered or made to Mr. Simpson for any personal appearance anywhere in the world?
Is there any offer from any source that you're aware of, anywhere in the world, to have him sign autographs for any purpose?
Not one contract. There may be a small amount of ongoing business for autographs, but probably not more than -- be lucky if it's $5,000 a month.
In your opinion, is the likelihood of him obtaining any contracts in the next year good, bad, or horrible?
KEY QUOTEAnd do you think that Mr. Simpson, because of the accusation of murders in this case, in this jury's verdict, is someone who is marketable as a sports personality?
Then on that production note, that's the same as -- as in the current assets or is it a different note?
It's the same note, but basically that just says that Mr. Simpson is 100 percent stockholder of that corporation, so we list it as a closely held corporation. But it has no value unless's he producing income.
Well, Pig Skins Inc. was the company that owned a 50 percent interest in certain Honey Baked Ham stores which was terminated earlier in 1996.
All right. And the $242,500, that's the amount that's still due and owing, not the amount that he has already received and paid to IRS and various living expenses?
Yes, that's correct. And in note 2, if you were to show the second page notes, you will see that that money has gone down to a current value as of 1 -- right here -- of 1/23, it's gone down to 170, and it's even down lower than that because we were paying bills daily.
Yes. May Medical is a partnership interest in a medical building that's -- if I say upside down, would the jury understand that. It doesn't take in as much as it has to service the debt against the property. It's on the verge of being foreclosed. And because it was a tax shelter type investment where a lot of deductions were taken early in the investment, if that does get foreclosed, there will be a large tax liability. Mr. Goodfriend is better qualified to touch on that.
Okay. Fair enough. Let's go down to -- so the total of closely held corporations and partnerships basically is 285,000. Can you see that?
All right. Now, on the assets, the OPI, both the 900,000 the 3.2 million that's his pension plan, correct?
It was done in April of 1995 when the property was refinanced. They appraised it at 3.7, and if anything it's gone down probably since then, in my opinion, because of the notoriety connected with the property.
Your view would not be the same as Mr. Roesler's view that the property has a greater value because it's his?
Why did you carry that at $250,000 for a while on Mr. Simpson's summary of financial condition and then lower it to a dollar?
Well, initially, Mr. Simpson, back in 1969, he bought that house for his mother. He had to take title in his name because the loan was going to be in his name, because he had the financial statement and Mrs. Simpson did not. So we all -- we have carried it all along in his name, but there's no beneficial interest as far as O.J. is concerned in that property. She -- Mrs. Simpson, the mother, has lived there since 1969 continually until the present day.
Those are two notes that he was ordered by the Court in Orange County to reimburse the guardianship for monies that the guardianship had advanced to an attorney, Marjory Fuller, for representing Justin and Sydney Simpson during the custody litigation.
Okay. This wasn't -- this wasn't for a lawyer for Mr. Simpson? He had a separate lawyer. This is a lawyer for the kids?
That's the unpaid balance that hasn't been converted to any other form, other than an unpaid balance, tied to a court order that Mr. Simpson is obligated to pay those fees.
Yes. That -- this speaks as of 12/31/96, that was the court order to provide a statement as of that date. Since that time, bills go on; you pay them as you're required. IRS demanded that this be paid, and we have paid that since.
And that, of course, doesn't include the eight and a half million dollars that this jury awarded on Tuesday, true?
Let's go over, just quickly go through the deferred tax liability. So you have on the $242,500, you have some tax liability, correct?
Yes, you do. This was a schedule that I asked Mr. Goodfriend's office to prepare as -- as it involves taxes.
All right. Fine, we will. Withholding going through that, that was included, but there Mr. Goodfriend figured taxes on the various assets based upon liquidation and the gains?
Exactly right. We were asked to show a statement as of a given date as if it were to turn all the hard assets into cash in order to pay debts. In order to do that, there is -- four, five of the assets that are on that statement that has deferred tax liability connected with it. And the taxpayers have got to get paid before anybody else. So that's why it's fair to put it on there.
Okay. Fair enough. Now, so, as I understand your testimony, sir, Mr. Simpson has a negative net worth of basically nine and a half million dollars, correct? 9.3. I'm sorry.
And it is also your opinion that he has no means of income at the present time; is that correct, sir?
Let's talk just a little bit about a -- we've heard that Mr. Simpson could have -- according to Mr. Roesler, he's entitled to $4 or $5 million for a book deal. Did you hear that testimony?
And the asking price at that time, has -- from that time forward has been a million dollars; is that correct?
In other words, Mr. Simpson had offered Random House, Little Brown, Viking, Penguin, and Judith Reagan, all to write a book for a million-dollar cash advance and was turned down by all four.
The actual offering and negotiations was handled by an agent in the east, and I'm not sure whether we start -- whether on Mr. Simpson's behalf, whether a dollar amount was assigned.
(BY MR. BAKER) Do you know whether or not Mr. Simpson has been rejected by four or more publishing companies for a book deal?
So far as I know, we've never received one proposal in writing to do a book deal. Everybody else has, but we have not.
KEY QUOTEAnd is there any suggestion or indication that he has any video, book deal, appearance deal, car deal, anything in the future?
He cannot pay his bills.
For the last 12 months, and that's been since January of 1996, I've seen a gradual drying up of demand for O.J.'s services in every area... There is zero. That was before Tuesday's verdict. Now, after Tuesday's verdict, I would say that it substantially impaired even the prospects that existed before the verdict.
So far as I know, we've never received one proposal in writing to do a book deal. Everybody else has, but we have not.
In your opinion, is the likelihood of him obtaining any contracts in the next year good, bad, or horrible? Horrible.