Cross-examination of Marvin Goodfriend

📄 Cross-examination of Marvin Goodfriend — Friday, February 7, 1997

Address:

C:\DEPT103\CIVIL\1997\FEB\7\CROSS-EXAMINATION-OF-MARVIN-GO.DOC

TRIAL

▲ Day 56 of 57

◀ Direct examination of Marvin Goodfriend Redirect examination of Marvin Goodfriend ▶

Witness: Marvin Goodfriend
Examiner: Peter Gelblum
Called by: Defense • Date: Friday, February 7, 1997 • Utterances: 58

Gelblum cross-examined defense financial witness Marvin Goodfriend on his methodology for calculating OJ Simpson's net worth, focusing on two issues: the witness's lack of expertise in valuing name and likeness, and his use of an inflated 62.5% tax rate on pension assets that assumed immediate liquidation — even though the pension plans were explicitly noted as not subject to execution in this case.

# 1 THE COURT:

Cross-examine. CROSS-EXAMINATION BY MR. GELBLUM:

# 2 Q:

Your analysis are information based -- information provided by Mr. Taft, correct?

# 3 A:

Correct.

# 4 Q:

Now, I think you acknowledge you're not here as an expert and you're not in fact an expert on valuing name and likeness; is that correct?

# 5 A:

Yes.

# 6 Q:

And you're not here to tell us that Mr. Simpson's name has no value, are you?

# 7 A:

No.

# 8 Q:

And you really don't know one way or the other, do you, sir, whether he has the ability to earn substantial amounts in the future?

# 9 A:

No. I only know what he earned in the past.

# 10 Q:

That's been quite substantial, right?

# 11 A:

In the past six months, no.

# 12 Q:

Prior to that?

# 13 A:

Quite substantial.

# 14 Q:

Including almost $3 million based on activities related to the murders?

KEY QUOTE

# 15 A:

During a two and a half year period.

# 16 Q:

About 15 months, right, from June of '94 to the end of '95? About 18 months?

# 17 A:

Oh, those figures were through the end of '96?

# 18 Q:

No, no.

# 19 A:

Okay.

# 20 Q:

Now, on the --

# 21 MR. GELBLUM:

Could you put back up the deferred -- calculation of the deferred income tax.

# 22 MR. BAKER:

I'm sorry. I took it. I'm sorry. I was going to give it back to the Court.

# 23 Q:

(BY MR. GELBLUM) On the pension plan, are you the one who decided to put down the 62 and a half percent rate?

# 24 A:

Yes.

# 25 Q:

That's based on what assumption?

# 26 A:

Based on an assumption of full and immediate distribution.

# 27 Q:

Prior to what age?

# 28 A:

Prior to age 59 and a half.

# 29 Q:

So there's a penalty if you pull it out before the retirement age; is that right?

# 30 A:

Yes.

# 31 Q:

Okay And you do know, sir -- 'cause you helped prepare the December 31, 1996 financial statement, didn't you?

# 32 A:

Yes.

# 33 Q:

And did you read the notes that were accompanying that?

# 34 A:

Yes, I did.

# 35 Q:

Did you read note 4?

# 36 A:

Note 4, vested interest in retirement plans.

# 37 Q:

I'm asking you if you read it?

# 38 A:

Yes, I did.

# 39 Q:

You read the part about the plans are not subject to execution on a judgment in this case; is that right?

# 40 A:

Yes.

# 41 Q:

So why is the money going to come out all of the sudden and be taxed at this higher rate, sir?

# 42 A:

Well, it would seem to me that if you're going to include the assets in the balance sheet in a net worth statement --

# 43 Q:

Yes?

# 44 A:

-- that you must affix the ultimate taxes on that.

# 45 Q:

Well, you want to affix a tax that's 17 and a half percent higher than it normally would be because you're assuming it's going to get taken out right now for immediate liquidation, right?

# 46 A:

I was asked to prepare --

KEY QUOTE

# 47 Q:

Is that right?

# 48 A:

That's --

# 49 Q:

The 62 and a half percent rate is for immediate liquidation?

# 50 A:

Correct.

# 51 Q:

Okay. And do you know of any plans Mr. Simpson has to immediately liquidate those pension plans?

# 52 A:

I don't know.

# 53 Q:

If he doesn't liquidate them they're not subject to execution in this case, and if he takes them out when he's supposed to take them out, then he will not have that higher rate, he'll have the lower rate Mr. Freeman used, right?

KEY QUOTE

# 54 A:

He would possibly not have those penalties of 12 and a half percent.

# 55 Q:

Not possibly. He wouldn't have them, would he?

# 56 A:

Correct.

# 57 Q:

All right.

# 58 MR. GELBLUM:

Nothing further.

REDIRECT EXAMINATION BY MR. BAKER:

Temperature

procedural

Key Quotes (4)

Examiner (Gelblum)

Including almost $3 million based on activities related to the murders?

Establishes that Simpson earned nearly $3 million from murder-related activities, undermining any claim of financial hardship.

Witness (Goodfriend)

I was asked to prepare --

Interrupted before completing, suggesting the witness was about to reveal he was instructed to use the inflated assumption, not that he independently chose it.

Examiner (Gelblum)

If he doesn't liquidate them they're not subject to execution in this case, and if he takes them out when he's supposed to take them out, then he will not have that higher rate, he'll have the lower rate Mr. Freeman used, right?

Exposes the defense's inflated tax assumption as doubly misleading: the pension can't be seized anyway, and if Simpson withdraws it normally he won't face the penalty rate.

Witness (Goodfriend)

Correct.

Concedes the core point — the higher tax rate was based on a scenario (immediate liquidation) with no basis in fact or legal necessity.

Evidence (2)

Informal

Calculation of deferred income tax (displayed on screen)

discussed

Informal

December 31, 1996 financial statement with Note 4 regarding pension plans not subject to execution

discussed, used to impeach witness's tax rate assumption

Notable Exchanges (2)

Gelblum•Goodfriend

Gelblum walks Goodfriend through his own financial statement's Note 4, which states the pension plans are not subject to execution, then forces him to admit the 62.5% tax rate assumes immediate liquidation with no factual basis.

strategic

Gelblum•Robert Baker

Baker briefly interjects to apologize for taking the deferred income tax exhibit, offering a rare moment of informality.

light

Light Moments (1)

Robert Baker

Baker interrupts cross-examination to apologize for accidentally taking the exhibit: 'I'm sorry. I took it. I'm sorry. I was going to give it back to the Court.'

Credibility Attacks (1)

⚔ Marvin Goodfriend

internal inconsistency / use of witness's own document

Gelblum used Note 4 of the financial statement Goodfriend helped prepare to show his 62.5% tax rate assumed immediate liquidation — a scenario contradicted by the same document, which states the pension is not subject to execution in this case.

Objections

None recorded

Proceeding 8918 • 58 utterances • Defense witness

Civil Trial

Department 103