Cross-examination of Leroy Taft

📄 Cross-examination of Leroy Taft — Friday, February 7, 1997

Address:

C:\DEPT103\CIVIL\1997\FEB\7\CROSS-EXAMINATION-OF-LEROY-TAF.DOC

TRIAL

▲ Day 56 of 57

◀ Redirect examination of Leroy Taft Recross-examination of Leroy Taft ▶

Witness: Leroy Taft
Examiner: Robert Baker
Called by: Plaintiff • Date: Friday, February 7, 1997 • Lines: 39

Robert Baker questioned financial manager Leroy Taft about Simpson's financial picture after cross-examination. Taft explained the Apollo house in San Francisco as effectively his mother's asset despite Simpson's name on the title, clarified that Orenthal Productions' $800,000 income was largely from one-time events involving insurance policies and Honeybaked Ham, and testified that the phone-card venture had poor sales and no market for the particular card bearing Simpson's face, name, and signature. Taft concluded that Simpson has no regular income stream producing anything near $2-3 million annually.

# 1 Q:

Go ahead and explain about the Apollo house, Mr. Taft.

# 2 A:

The Apollo house is a small house in San Francisco that Mr. Simpson bought for his mother in 1969 for -- for $26,000. He took out about a $20,000 lien for it, loan for it. And because his mother didn't have the financial statement to support the loan, he had to go on the title, and he also was the responsible party for the loan. She has lived there the entire time since the property was purchased, and even some time ago, maybe ten years ago, Mr. Simpson deeded the property over to his mother. But then his mother fell ill and she was going into surgery, and she wasn't really sure whether she was going to make it through, so she deeded it back to O.J. to avoid the probate, in case she didn't make it. And he continued to carry it on his books as an asset. Although every time we talked to the banks, they know it's his mother's asset, and they know it's carried there for technical purposes only.

# 3 Q:

And Mr. Simpson has never claimed any beneficial interest in that house from 1969 to today?

# 4 A:

That's correct.

# 5 Q:

Now, Mr. Gelblum asked you about this $800,000 income to Orenthal Productions between February of '96 and summer of '96. Do you recall that?

# 6 A:

Yes.

# 7 Q:

Now, when money was received from CNA or from the insurance company, that money went in no small measure to Orenthal Productions, did it not?

# 8 A:

Yes.

# 9 Q:

And that money -- then some of that money flowed through to Mr. Simpson, did it not?

# 10 A:

That's correct.

# 11 Q:

That was a one-time event where he had to sell his insurance policies to get that income?

# 12 A:

Correct.

# 13 Q:

Relative to the Honeybaked Ham, some of that money went through Orenthal Productions, did it not?

# 14 A:

Yes. It originally came in to Pigskins, Inc., who owned the 50 percent partnership in the Cornerstone Company that owned the Honeybaked Ham stores. And from there, it was drawn down by Mr. Simpson and loaned back to Orenthal, if Orenthal didn't have the income, there was -- or cash flow, it was loaned back to Orenthal to pay bills. All of the money that's come in has gone to pay bills and taxes.

# 15 Q:

Now, Orenthal Productions, when it got the one-time event from CNA Insurance comprises the one-time event from Honeybaked Ham; that's true, is it not?

# 16 A:

Correct. That's true.

# 17 Q:

Mr. Simpson drew an income off the Honeybaked Ham franchise on an annualized basis?

# 18 A:

That's correct.

# 19 Q:

Of course, that's now gone, too, isn't it?

# 20 A:

Correct.

# 21 Q:

Mr. Gelblum asked you a little about those phone cards. Do you recall that?

# 22 A:

Yes.

# 23 Q:

That was a flop, wasn't it? They never sold?

# 24 A:

They did not. The licensee had very poor results from trying to sell the cards.

# 25 Q:

And lost over a couple hundred thousand dollars in that event?

# 26 A:

That's my understanding.

# 27 Q:

That's because there's no market out there for memorabilia for Mr. Simpson?

# 28 A:

There was no market for that card with his face and name and signature on it.

KEY QUOTE

# 29 Q:

And Mr. Simpson has financed his lifestyle through the one-time sale of assets up to the present time?

# 30 A:

That's right. He's been liquidating assets since June of 1994 and incurring taxes when he did liquidate if taxes were due. And the rest of it he's been paying bills and taxes with and attorney fees.

KEY QUOTE

# 31 Q:

Now, in the last six months, have you taken any fees from Mr. Simpson?

# 32 A:

Last six months? Yes. Yes, I have.

# 33 Q:

Okay. And how much have you --

# 34 A:

I would say in the last six months, I've taken maybe 40 or $50,000. I've been paid.

# 35 Q:

Now, in terms of the income that Mr. Simpson has presently, does he have any income that is being generated on a regular basis that would produce anything in the neighborhood of two to three million dollars a year?

# 36 A:

No, he does not.

# 37 Q:

And you never put, ever, in the 28 years that you've been representing Mr. Simpson as his business manager, any dollar amount whatsoever for the value of his name and likeness in any balance sheet or summary of financial condition, did you?

# 38 A:

No.

# 39 MR. BAKER:

Nothing further.

FURTHER REDIRECT EXAMINATION BY MR. GELBLUM:

Temperature

procedural

Key Quotes (4)

Witness

He's been liquidating assets since June of 1994 and incurring taxes when he did liquidate if taxes were due. And the rest of it he's been paying bills and taxes with and attorney fees.

Describes liquidation of Simpson's assets since June 1994 and the use of proceeds to pay bills, taxes, and attorney fees.

Witness

There was no market for that card with his face and name and signature on it.

Limits the market testimony to the particular card bearing Simpson's face, name, and signature.

Witness

No, he does not.

Denies that Simpson had regular income producing approximately two to three million dollars per year.

Witness

Although every time we talked to the banks, they know it's his mother's asset, and they know it's carried there for technical purposes only.

Characterizes the Apollo house as Simpson's mother's asset carried in Simpson's name for technical purposes.

Evidence (4)

Informal

Apollo house in San Francisco — purchased 1969 for $26,000 for Simpson's mother, deeded to her, then back to Simpson before her surgery

discussed

Informal

Orenthal Productions $800,000 income from CNA insurance policy sale and Honeybaked Ham franchise

discussed

Informal

Simpson phone cards with his face, name, and signature — poor sales, with Taft understanding that the venture had lost more than a couple hundred thousand dollars

discussed

Informal

Pigskins, Inc. — Simpson's entity holding 50% partnership in Cornerstone Company owning Honeybaked Ham stores

discussed

Notable Exchanges (1)

Robert Baker•Leroy Taft

Baker reviewed one-time, ended, or poorly performing income sources and elicited that Simpson had no regular income producing approximately two to three million dollars per year.

strategic

Objections

None recorded

Proceeding 8911 • 39 lines • Plaintiff witness

Civil Trial

Department 103