Posted: 11/01/02

Letter to Shareholders

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Closed Meeting to Discuss Tax Issue A Positive Development

Letter to Shareholders

Fellow BENJ Shareholders:

As you can see from Don Willner’s update (below), things are finally starting to move after all these years. Thanks in large part to the exceptional counsel provided by Mr. Willner and his team over these many years, there is light at the end of the tunnel. Taking all indications into account, we feel that our chances for success are very positive.

However, like many of you, we are frustrated with the time and expense required to win justice for BENJ shareholders. The next few weeks are arguably be the most important of this entire process as our attorneys prepare for two pivotal events later this month.

We anticipate the expenses associated with the upcoming meeting and oral argument in Washington D.C. are going to be high. While many shareholders have contributed, many others are taking it for granted that "the other people" will carry the burden for their cause. Indeed, some have contributed more than their “fair share”, and their support is greatly appreciated. However, democracy is not a spectator sport - sometimes it requires making sacrifices.

As a matter of course, we must ask all BENJ shareholders to support the fight for justice by making a financial contribution immediately. You will have the satisfaction of knowing that you personally helped right a wrong with the Federal Government and that you made a difference that benefited ALL BENJ shareholders -  not just yourself.

The exciting news that the IRS and the FDIC want to "talk" is the best news we have had in a long, long time. Please help us succeed. Send your check to:

Don S. Willner, Trustee

Benj. Franklin Shareholders Litigation Fund

200 S.W. Naito Parkway, Suite C303

Portland, OR 97204

 the Lead Plaintiffs

Closed Meeting to Discuss Tax Issue A Positive Development

Judge Smith Schedules Motion to Reconsider Argument

Update provided by our attorney, Don Willner.

The week of November 18 will be busy for the Benj. Franklin team. First, on Tuesday November 19^th, there will be a closed meeting with the attorneys and tax advisors of the U.S. Department of Justice (attorneys for the IRS), the Federal Deposit Insurance Corporation (the receiver for Benj. Franklin), and Benj. Franklin. The discussions, by agreement between the parties, will be confidential. 

We believe that there is no tax owed for Federal Financial Assistance provided to the receivership and a very slight corporate tax. The position of the government and the FDIC is not known, but will be made available two weeks prior to the meeting. 

It is our hope that the tax matter can be fairly resolved at this meeting, but obviously an agreement requires the consent of all three parties. We have been trying to get such a meeting for years and the fact that these two agencies are now willing to meet is favorable.

Second, after Judge Smith’s decision in the Claims Court case, in which he awarded Benj. Franklin shareholders approximately $35 million, both sides filed Motions for Reconsideration – we argued for more and the government for less. Most Motions for Reconsideration are summarily denied. But in our case, Judge Smith instructed us each to file written briefs, which means that the matter was given serious consideration. Judge Smith has set oral argument for November 21^st. Obviously, it is the forthcoming decision on the Motions for Reconsideration that counts, but the granting of briefs and oral argument is unusual and therefore favorable. The Claims Court argument is open to the public and will take place at 3:30 p.m. in the United States Court of Federal Claims, 717 Madison Place NW, Washington D.C. 20005.

 There is much work to be done during the next two weeks to prepare for the tax conference and the oral argument in the Claims Court.

Posted: 8/19/02

Shareholders Letter - Legal Fees

Summary Report from Don S. Wilner

August 19, 2002

Dear Shareholders:

We are enthusiastic about the progress report filed by our attorneys (see below). We will continue to post progress reports as they become available.

Earlier this year, when the FDIC initiated transfer of the receivership funds to the IRS, our legal battle quickly increased from one to three litigations. As a result, we have experienced an unforeseen increase in legal fees, all of which must be borne by the lead plaintiffs. The lead plaintiffs and 499 other shareholders have responded to our request for contributions this year. In fact, many long time shareholders have contributed more than their “fair share”.

However, we have noticed a worrisome trend that undermines our ability to continue the fight. Shareholders that recently purchased shares have been reticent in their financial support. In order to effectively fight the government – now on three legal fronts – we need shareholders that have not contributed to please do so. As in the past, we ask that shareholders contribute at least $0.25 per share. 

Finally, it is important that we have your name, address, email address, and number of shares held. This information is necessary to properly distribute funds at the conclusion of the litigation. New shareholders should send their names and addresses by email to this website and send their "fair share" contributions of $0.25 per share to Don S. Willner, Trustee of the Benj. Franklin Shareholders Litigation Fund, 200 S.W. Naito Parkway, Suite 303, Portland, OR 97204. In the event of victory, all financial contributions will be repaid first. If we win, all of us win, but lawsuits are expensive.

Yours truly,

The Lead Plaintiffs

August 19, 2002

Report from our attorney, Don S. Willner

            Here is where we stand:

1. Suess et. al. v. United States (claims court) – Both sides have filed briefs on the Motions for Reconsideration, and we are waiting for Judge Smith’s decision. 

2. Suess et. al. v. FDIC -  (Oregon Federal Court) – Chief Judge Haggerty first granted a Temporary Restraining Order preventing FDIC from transferring the $88 million in the receivership to the IRS, then denied a preliminary injunction, and we have appealed that denial.  In the meantime, the FDIC did not transfer the money to the IRS and the IRS sued FDIC in the District of Columbia Federal Court, which achieves part of what we were seeking in the Oregon case. 

3. United States (IRS) v. FDIC  - (District of Columbia Federal Court) – We have demanded that FDIC vigorously defend this case and are waiting for their answer.  Meanwhile we are preparing a Motion to Intervene in that case and transfer it to Oregon. Our tax consultants advise us that no Federal Financial Assistance Tax should be owed to IRS. I we win this tax case, there is $88 million plus interest in the receivership for the shareholders. If the IRS wins, the Government get that money. If IRS wins partially, and if we increase our award in the Court of Appeals to more than the tax, we still win. Our back-up position is trying to persuade the Federal Court of Appeals to add the amount of any tax to our restitution damages, for the reason that the tax would not have occurred but for the Government breach of contract with Benj. Franklin

The decision of Judge Smith to request briefing on the pending Motions for Reconsideration, and the decision of the FDIC not to voluntarily transfer the receivership balance to the IRS resulting in the IRS suing FDIC are victories for us. 

Yours truly,                  

WILLNER U’REN & HOOTON, LLP

 Don S. Willner

Posted: 7/12/02

Motion for Reconsideration Filed

Court Denies Preliminary Injunction

The report below is from our attorney, Don S. Willner

 _________________________

           We are now fighting for the shareholders on two fronts.

1.         Suess et al v. United States (U.S. Court of Federal Claims).  We have filed a Motion for Reconsideration of the judgment.  Our original argument at trial was that we were entitled to damages for loss of profits (expectancy/and loss of the value of the franchise (restitution). The judgment gave us only the market price of Benj. Franklin stock the day before the passage of FIRREA (August 8, 1999) which was just under $35 million. A Motion for Reconsideration is not supposed to reargue the case, but rather focus on matters the Court overlooked. Our motion accepts the court’s theory of market price for the purpose of the motion only, and argues (a) an earlier date should be chosen to value market price (we chose the date that President Bush prepared the new legislation), (b) we are entitled to a premium for change of control (transfer of membership of the whole corporation is worth more per share than sale of individual shares); and (c) this money should be paid to the shareholders, not placed in the receivership. The government submitted a Motion for Reconsideration, which says we are entitled to nothing. 

Under Claims Court rules, there is no response to Motions for Reconsideration unless ordered by the Court, and many such motions are summarily denied. We have been advised that Judge Smith will order responding briefs. This is a good start. We have also filed a cost bill for $280 thousand to be added to the judgment.

 2.         Suess et al v. Federal Deposit Insurance Corporation (United States District Court for the District of Oregon)  There is close to $90 million in the FDIC receivership and it is our position that this money should stay there until the U.S. Court of Appeals for the Federal Circuit rules on our forthcoming appeal from Judge Smith’s Opinion, after completion of the Motion for Reconsideration. The Internal Revenue Service is now demanding the money. We filed a Motion for a Temporary Restraining Order which was granted for a two week period by Judge Haggerty. Unfortunately our request for a preliminary injunction (which lasts longer) was denied. We are discussing the next step with FDIC and trying to prevent transfer of this money to the IRS. 

I am working closely with our new Washington, D.C. attorney, Jerry Stouck, and other members of our legal team. We are thankful for the recent financial contribution; of $67,570.90 from the shareholders. The unexpected IRS demand for the money in the receivership means more legal work and more expense, but we have to defend our position that the money in the receivership belongs to the shareholders.

Final Judgment Entered and Restraining Order Granted

Don S. Willner

  IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF OREGON

                                             Plaintiffs,

              vs.

THE FEDERAL DEPOSIT INSURANCE

CORPORATION, A QUASI-GOVERNMENT

Corporation,

Defendant

Based on plaintiffs’ verified complaint, the materials attached to the affidavit of Don S. Willner, the plaintiffs’ motion for a temporary restraining order and for an order to show cause why a preliminary injunction should not issue, and plaintiffs’ memorandum of law, and the Affidavit of plaintiffs’ attorney that all of the documents in the file were faxed to Bruce Taylor, the attorney for defendant immediately after the filing of the complaint, it

                 HEREBY ORDERED:

1. Defendant Federal Deposit Insurance Company is temporarily restrained from

2. Defendant FDIC is ordered to appear and show cause, if any there be, why it should not be preliminarily enjoined during the pendency of this suit from preventing the

3. A hearing shall take place upon the 25^th day of June, 2002, at 9:00 o’clock A. M., in room 13A of the United States Courthouse in Portland, Oregon, to determine whether the preliminary injunction should issue.

4. The reasons for the issuance of this temporary restraining order is that there is a sufficient showing that defendant Federal Deposit Insurance Company is in breach of its agreement with plaintiffs and in breach of its fiduciary duty to the Benj. Franklin shareholders by threatening to transfer over $80 million from the Benj. Franklin Receivership account to the Internal Revenue Service. If this transfer is made, the damage to the Benj. Franklin shareholders is probably irreparable. Further, the issue of whether this money belongs to the Internal Revenue Service has not been resolved by the United States Court of Federal Claims and appeal is available to the United States Court of Appeals for the Federal Circuit. Plaintiffs in the Claims Court case argue that this money belongs to the shareholders because the Federal Financial Assistance tax would not have occurred but for the Government’s breach of contract which resulted in the seizure of Benj. Franklin. Finally, there is no showing of harm to the defendant FDIC because FDIC controls the money and is gaining interest on the money.

5. Since there is not showing of any damage to the FDIC from the issuance of a temporary restraining order, the bond shall be in the nominal amount of $5,000.00.

6. This temporary restraining order is binding only upon the parties to the action concert or participation with them who receive actual notice of the order by personal service or otherwise.

     DATED this 17^th day of June 2002.

                                                                       Ancer L. Haggerty /s/

                                                                       United States District Court Judge

Submitted By:

Don S. Willner

OSB No. 52114

503-228-4000

Attorney for Plaintiffs Suess et al

Two letters to shareholders, one from Richard Green for the plaintiffs and one from our attorney, Don Willner 

WILLNER U’REN & HOOTON, LLP

ATTORNEYS AT LAW 

May 1, 2002

Dear Shareholders:

This is a supplement to the many reports that I have written to you since 1990.

We finished the trial on damages on September 17, 1999, and U.S. Claims Court Senior Judge Loren Smith filed his decision on April 1, 2002.  It was a victory, but a small one.  We received a judgment for $35 million.  Here are the rulings:

1.  The shareholders had "standing" to bring this suit on behalf of Benj. Franklin (1995 ruling).

2. The government breached its contract with Benj. Franklin (1997 ruling).

3. The breach of contract caused the seizure of Benj. Franklin.

4. The plaintiffs are entitled to damages "based on the lost value of the Franklin franchise."

5. Plaintiffs have not proved that they are entitled to damages based on the value that Benj. Franklin would have if it had survived until the 1999 trial because the proof was speculative and flawed (expectancy damages).

6. Plaintiffs have not proved damages measured by the $177 million actually paid by Bank of America to the receiver in 1990 for most of the deposits and other assets of Benj. Franklin (restitution damages).

7. Plaintiffs have proved that they are entitled to damages measured by the stock price of Benj. Franklin one day before the passage of the law which breached the contract (August 7, 1989), which the court fixed at $35 million.

8. "The Court believes that the award is grossly inadequate in view of the damages actually suffered by Franklin". (Quote from the Opinion).

9. The Court did not rule on our claim that any IRS claim for taxes should be absorbed by the government, not Benj. Franklin, because there would have been no tax claim without the breach of contract with Benj. Franklin.

Motions for reconsideration are due ten days from the date of the date of the Judgment, which is not yet entered. Notices of Appeal to the U.S. Court of Appeals for the Federal Circuit must be filed within 60 days of the Judgment. I am now in discussions with a tax expert who believes that the IRS tax claim is not correct. We will be taking appropriate action and will provide more information when available.

The plaintiffs welcome the victory, but believe the amount of damages set by Judge Smith are clearly insufficient. In my professional judgment, there are errors in the Court's Opinion and reasonable chances of increasing the amount awarded.  Toward that end, we have added Jerry Stouck, to our legal team. Jerry Stouck is a prominent Washington, D.C. attorney with a winning record in the U.S. Court of Appeals for the Federal Circuit where our appeal will be heard.

It is clear that we have substantial work ahead.  Although it is very difficult to estimate future expenses in advance, my best estimate for the Motions to Reconsider, and the Appeal, is $250,000.  I cannot yet give you an estimate in connection with the tax matter. Over 4000 shareholders have contributed nearly $3 million to the financing of this case thus far, with the plaintiffs contributing substantially more than their fair share. 

The plaintiffs are committed to continuing the fight for justice for the 6,500 shareholders of Benj. Franklin. I, and the other members of the legal team, pledge that we will do everything possible to remedy the wrong, and make the dream of full justice for the shareholders a reality.

Sincerely,

WILLNER U’REN & HOOTON, LLP

Don S. Willner

Response to Court's Decision Under Consideration

Judge Smith Renders Decision

Judge Smith rendered a long awaited decision today. The decision included the amount for BENJ shareholders for the amount of $35 million or $4.54 per share. More details to follow.

Decision Expected This Week

In a phone call on Monday, March 25th with our attorney, Don Willner and the attorney for the government, Judge Smith's Administrator said that Judge Smith intends to issue the decision at 5 p.m. eastern time on Friday March 29. Please do not call or e-mail for further information. This is all we know at this time and hopefully we will not be disappointed by another delay.

Decision on Suess to be Announced First 

Our attorney, Don Willner, reports that he is doing everything appropriate within his power to get an early decision.  Judge Smith has announced that he will complete his work on two other delayed decisions in Meritor and Glendale Federal after he files the Suess decision.  In other words, the Meritor and Glendale plaintiffs are also anxious to have Suess decided.  We will immediately put on our website any new information that is received.

Incidentally, this appears on the Meritor website:

“As you will recall, Ben Franklin Savings is the case in front of ours on Judge Smith’s “to-do” list.  Don Willner, the attorney for Ben Franklin, has some insightful comments and advice on their website, which is located at www.benfranklinoregon.org.  With respect to not sending letters to Judge Smith, we couldn’t agree more.  PLEASE DO NOT CONTACT THE COURT.”

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Last modified: February 13, 2012