Re-redirect examination of Marvin Goodfriend

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

Address:

C:\DEPT103\CIVIL\1997\FEB\7\RE-REDIRECT-EXAMINATION-OF-MAR.DOC

TRIAL

▲ Day 56 of 57

◀ Redirect examination of Marvin Goodfriend Redirect examination of Marvin Goodfriend (2) ▶

Witness: Marvin Goodfriend
Examiner: Robert Baker
Called by: Defense • Date: Friday, February 7, 1997 • Utterances: 43

Plaintiff's attorney Peter Gelblum recrossed defense financial expert Marvin Goodfriend on the valuation of O.J. Simpson's pension funds and deferred taxes listed on a balance sheet. Gelblum pressed Goodfriend on whether Simpson could access pension funds without triggering the full tax hit shown on the balance sheet, and whether future losses could offset deferred taxes on asset sales. The exchange also touched on attorneys' fees and their tax deductibility.

# 1 MR. BAKER:

I don't have anything further. RECROSS-EXAMINATION BY MR. GELBLUM:

# 2 Q:

Are you aware that Mr. Baker made that argument to the Judge and the Judge rejected that argument and ordered it included on the balance sheet?

# 3 MR. BAKER:

I object.

# 4 THE COURT:

Objection sustained.

# 5 MR. GELBLUM:

Your Honor, he brought it up at my request.

# 6 THE COURT:

Excuse me. You can't ask him about my rulings or the basis of my rulings. Where do you get off with that?

KEY QUOTE

# 7 Q:

(BY MR. GELBLUM) Mr. Goodfriend, you left it off initially and then Mr. Baker told you that you had to put it back on, right?

# 8 A:

It was left off initially, and then we were told by the Court that it had to be put back on.

# 9 Q:

And you are aware, sir, aren't you, that there are numerous uses that Mr. Simpson could make of those pension funds currently, prior to retirement age, where they would not pay -- where he would not have to pay the increased tax rate that you put down on this sheet?

# 10 MR. BAKER:

Objection, outside the scope.

# 11 THE COURT:

Overruled.

# 12 A:

I'm not aware of that.

# 13 Q:

(BY MR. GELBLUM) He can borrow from it, can't he?

# 14 A:

No, he can't.

# 15 Q:

He can't borrow from that? You sure?

# 16 A:

He had -- Yes, I'm sure.

# 17 Q:

He has borrowed from it in the past, right?

# 18 A:

Yes, once.

# 19 Q:

And he can use that as collateral for loans, right?

# 20 A:

No.

# 21 Q:

You're positive?

# 22 A:

If he were to use his pension plan or any part of it as collateral for a loan, it would become immediately taxable. If he were to take a loan from the pension plan right now, it would become immediately taxable.

KEY QUOTE

# 23 Q:

He can and has used it for -- to list on his assets to help him get loans; you're aware of that, aren't you?

# 24 A:

Yes. It would be required that he list that on a balance sheet to a bank.

KEY QUOTE

# 25 Q:

That's something that a bank looks at to determine whether's he credit worthy, right?

# 26 A:

Correct.

# 27 Q:

And I wanted to ask you one question about the attorneys' fees that you talked about with Mr. Baker on the first time around, if I may. You said that you didn't think the fees were tax deductible; is that right?

# 28 A:

I said they are not fully tax deductible.

# 29 Q:

Okay. But you are aware that Mr. Taft, with some tax attorney advice, did seek to shelter or to deduct a substantial portion of the fees?

# 30 A:

Yes.

# 31 Q:

Okay. And you also said to Mr. Baker that he can only use the tax benefit of those deductions if he has income to shelter it, right?

# 32 A:

Yes.

# 33 Q:

Okay. And by the same token, if he has losses, as Mr. Taft seemed to be suggesting he's going to be having, he's not going to pay all those taxes that you've listed, is he?

# 34 A:

I question that because the tax benefit would go to his corporation, because any tax deduction taken for a portion of those fees are taken on the corporation.

# 35 Q:

No. I'm talking about taxes that you said he's going to incur on the sale of assets. Some of those taxes, he will not have to pay if he has losses to offset against those, against the profits from the sales, right?

# 36 A:

Depends on the kind of losses.

# 37 Q:

He could? You just don't know, do you?

# 38 A:

I just don't know what?

# 39 Q:

What he's going to have in the future, what losses he's going to have, if any?

# 40 A:

I don't know what losses he's going to have in the future.

# 41 Q:

Okay. But you put down all the deferred taxes anyway just to be safe, assuming's he going to pay all those taxes?

KEY QUOTE

# 42 A:

I don't know of any losses that he will have in the future.

# 43 MR. GELBLUM:

Nothing further.

REDIRECT EXAMINATION BY MR. BAKER:

Temperature

tense

Key Quotes (4)

Hiroshi Fujisaki

Excuse me. You can't ask him about my rulings or the basis of my rulings. Where do you get off with that?

Judge Fujisaki sharply rebukes Gelblum for attempting to reference the court's own rulings through a witness, one of the more pointed judicial admonishments in the trial.

Witness

If he were to use his pension plan or any part of it as collateral for a loan, it would become immediately taxable. If he were to take a loan from the pension plan right now, it would become immediately taxable.

Goodfriend clarifies the tax consequences of pension fund access, defending his deferred-tax calculation against Gelblum's challenge.

Witness

Yes. It would be required that he list that on a balance sheet to a bank.

Gelblum elicits that Simpson used the pension fund as a listed asset to obtain creditworthiness with lenders, undermining the defense framing that the funds were inaccessible.

Examiner

But you put down all the deferred taxes anyway just to be safe, assuming he's going to pay all those taxes?

Gelblum's closing thrust — that Goodfriend's balance sheet overstated tax liabilities by ignoring potential future losses — is left only partially answered.

Evidence (1)

Informal

Balance sheet listing O.J. Simpson's assets including pension funds with deferred tax liabilities

discussed and challenged

Notable Exchanges (3)

Peter Gelblum•Hiroshi Fujisaki

Gelblum attempted to ask Goodfriend whether he knew the Judge had ordered the pension item included on the balance sheet; Judge Fujisaki cut him off sharply with 'Where do you get off with that?'

heated

Peter Gelblum•Witness

Extended back-and-forth on whether Simpson could access pension funds via borrowing or collateral without triggering full taxation; Goodfriend held firm on immediate-taxability but conceded Simpson had borrowed from it once and listed it for creditworthiness.

strategic

Peter Gelblum•Witness

Gelblum probed whether future losses could offset deferred capital gains taxes Goodfriend listed; Goodfriend acknowledged he does not know Simpson's future losses but maintained he had no current knowledge of any.

revealing

Credibility Attacks (1)

⚔ Marvin Goodfriend

internal inconsistency / selective assumptions

Gelblum attacked Goodfriend's balance sheet as overstating Simpson's tax burden by assuming maximum deferred taxes while ignoring potential future losses and the real-world liquidity value of the pension fund (creditworthiness, prior loan).

Objections

2 objections (1 sustained, 1 overruled)

Proceeding 8920 • 43 utterances • Defense witness

Civil Trial

Department 103