To be modified 6 incl full quotes

1. To be modified for each declaration
Declaration… John A. Redmond
Declaration…Maureen C. Redmond
Declaration…Geraldine Redmond
This is a response to Second Amended Complaint objecting to Discharge of
Debtor—General Allegations.
Subject: Communications and Negotiations---Background.
1. Geraldine’s position prior to and at time of contract negotiation with
Gaggero. She had a period of home insecurity after a very stable nine year
period with landlord Grant Young. Two exhibits and handwritten notes are
Geraldine’s.
2. Geraldine saw and responded to an ad in a paper which after initial
discussions seemed attractive to her. It enabled her to have a personal
residence and have another business alongside her well-established and
profitable training business.
3. There was a stage in her negotiations with Gaggero on the lease that
Geraldine arranged for her parents to visit the ranch and facility.
4. Neither of the parents knew anything about the horse business. Both are
highly involved in their own professions. However, Gaggero, obviously a
successful businessman, we found to be a charming and businesslike man.
We felt that Geraldine would be safe at this location and would have a good
opportunity to succeed in a positive atmosphere.
5. Consequently we lowered our guard in the negotiations on the lease,
trusting to our positive reaction to Gaggero. In short, we trusted Gaggero.
6. This trust is revealed in some of the correspondence between John and
Gaggero during John’s helping Geraldine with the lease review.
7. Here are some clauses from John’s November 3, 2001 letter to Steve
Gaggero: exhibit:-
( a ).”We do understand that your financial situation dictates extreme care in
the protection of your property and assets. This is especially relevant with an
unproven tenant such as Geraldine. It is quite clear, however, that the draft is
‘Landlord friendly’ ”.
( b ).”In this review, I have tried to understand your position. However, my
task is to prepare a workable lease for Geraldine and one that gives Maureen
and myself adequate protection as guarantors .Quite rightly, from what I can

2. see, you have Corporate and Fiduciary protections around you. Maureen and
myself have nothing. The LLC that I will set up for Geraldine will help in
normal operations, but there would appear to be little protection against
some of the “draconian” clauses towards the end of the draft.”
( c ) ” On the positive side, Geraldine is more excited than we have ever seen
her. She cannot wait to get to work. She was thrilled about your two phone
conversations which could lead to immediate boarders.”
( d ) “I think all of this clause needs simplifying. It seems to me that the only
ones who understand it are yourself and Geraldine. She thinks that you need
to work in some flexibility on stabling costs. The last paragraph is fine.”
( e ) “I hope you feel that I have responded in a positive manner. Maureen
and myself so want Geraldine to have this opportunity. She deserves it. We
like you and feel you will be fair with her.”
( f ) “ I have been mulling over the guarantor provision. I feel that three
years as a guarantor is all that we feel comfortable with. In that time, in our
view, you will have adequate time to assess Geraldine’s ability and
performance. I have just passed my 65th
birthday and I am now at the stage
where I want a settled personal environment and I do not want to be upset by
events over which I have no direct control.
( g ) “ When I first read the draft, my initial reaction was that the first year of
the contract should be a one-page short lease. This would give both of you a
year to explore and experiment before settling down with a full long-term
lease. As I have done this analysis, I feel that this is the right way to go. I do
understand that the majority of the risk is with you.”
( h )” In the final analysis, if Geraldine loses your confidence, she would not
want to stay and her sense of fair play would dictate that she would work
with you to ensure an acceptable conclusion that would protect your
interests”.
8. Letter from John to Steve Gaggero dated 11/9/2001..exhibit.
9. John Redmond, at one of the lease negotiation meetings, gave Gaggero his
phone number to call if there were any problems.
10. On completion of the signing of the lease, Gaggero handed over to
Geraldine his file of prospective boarders who had shown interest in

3. boarding at the facility. Gaggero’s opinion of this file was that he had an
inch thick file of answered ads of people trying to get in. Geraldine found
the list very poor. Mark Maravelas and Gaggero had called most of them
already.
11. Under the lease Geraldine was required to examine the condition of the
lease and prepare an “exception list” by December 31, 2001, plus a video.
This review will be reviewed in detail. It can be summarized that Geraldine
was still trying to get things fixed that were on the “exception list” as late as
April 2002.
12. The Redmond parents by Jan. 1, 2002 were now fully occupied with
their own business and professions. John now fully occupied with tax
preparation business and Maureen with her Therapeutic Companion
business. John only went 5 times ever to the facility, and Maureen 3 times
(including baby-sitting for Geraldine).
13. Geraldine, in addition to factors already discussed in numbers 10 and 11,
now receives a major setback. Both Geraldine and her father’s reading of the
clause 5 Revenue Generating Activity was that it would not take effect until
Somerset Farms LLC was making money and gross sales were over
$100,000.
14. A casual but deadly note from Mark Maravelas states that Gaggero’s
reading of RGA allows the landlord to keep 90% of the profit..see exhibit
Gross rent ………….$720.00
Feed, etc……………$220.00
Profit……………….$500.00
Landlord 90%...........$450.00
SFLLC/Geraldine…. $ 50.00.
15. Exhibits…4 pages tell the whole story:-
( a )” He immediately became very angry. His face turned very red…..he got
out the contract and read RGA verses very loudly and I was in a fog,
hysterical, thinking inside I will never make it. What can I do? I have just
moved all of my horses, Jesse, my home, and put all my money into this and
Dad and Mum, and if I can’t do it he will get us because we signed this
horrific contract. I couldn’t really hear him. He just yelled and then said you
better talk to your Dad and make sure he understood it.”
( b )” I was so scared he would go after Mum and Dad that the fear took over
and I decided I just had to make more money somehow. I would try to get
some loans just to make it through the year. I was devastated. It was totally
hopeless.”

4. ( c )”The arbitrary RGA imposition destroyed Geraldine’s business by
February, 2002.”
( d )
16. John and Maureen went about their work knowing nothing of events at
the facility. They were encouraged that Geraldine was in good hands with
Gaggero when they received a copy of a declaration by Stephen Gaggero
executed July 10, 2002 supporting Geraldine in her custody battle over her
son, which was close to trial.
Exhibit:-
( a )”The management company is very satisfied with the arrangement and
finds her, and her family, to be of the highest caliber.”
17. John and Maureen knew things were financially tight for Geraldine and
continued to help her as much as they were able. John received only one
monthly statement from the bookkeeper. Both parents were more than fully
occupied with their own day to day business and personal situations. John
received no phone calls or faxes from Gaggero until the September 11, 2002
letter from Mark Maravelas ( exhibit ) asking for a meeting and stating
SFLLC was “ falling more and more behind in its payments and production
of the required documents”.
18. John responded immediately”
Exhibit: letter to Stephen Gaggero dated September 14, 2002.
( a )”His request is disturbing, as well as no surprise. I have had only one
statement from Geraldine/Marsha and that was at least two months ago.”
( b )” I understand from Geraldine that Marsha hopes to have the required
reports up to date by Monday”.
( c ) I intend to do a complete review of the bookkeeping both Somerset and
Geraldine. Given good access to Marsha’s reports and source documents I
would hope to have that completed by next weekend.”
( d ) “There is no possibility that I could be available for your Wednesday
meeting. I am fully booked both with tax extensions and a major increase of
audits through October 15. In addition, even if I came to the meeting I could

5. not discuss the situation constructively. I would not be able to contribute in a
useful manner”.
( e )”To Maureen and myself there seems to be a major misunderstanding on
a couple of major issues. First, the RGA clause. Second, omprovements to
the facility. If you will remember, nine months ago, we said we would back
Geraldine to the tune of $30,000 at the time we were refinancing our house.
To date we have contributed $50,000 in total, far more than we were willing
or able to give. Geraldine has benn financing, to a large extent, the rents,
improvements, labor and feed expenses etc.. out of income from her own
activities”.
( f )” The problem seems to be that you expect there to be improvements to
the facility at a faster rate than Geraldine can finance, Facility income is
inadequate. The strain on Geraldine is enormous”.
( g )” Please consider holding your Wednesday meeting with Geraldine and
Marsha. I would like to propose that I come up next weekend at your
convenience. I feel that then we could have a positive meeting”.
This has caused her intense stress which will continue until the matter is
settled, hopefully by the end of the year”.
( h )” When I did not get financial reports, I should have realized there were
hidden problems. I expected that Geraldine would tell me if things were not
right and in the last resort, I knew that you would call me if you felt the
matter was serious. I gave you my home phone number for that purpose. I
hope that we can resolve matters to your satisfaction”.
( i ) “Geraldine loves your ranch and the equestrian center. She has put her
heart and soul into the project. She had used her extensive knowledge and
contacts of the horse business to try and create the best facility in Southern
California. Possibly we are asking her to do too much. The work itself is no
problem. You, Maureen and myself must come to grips with the financial
aspect. We should consider this as we look to the future”.
It is a most positive letter. We still had complete confidence in Gaggero to
look after Geraldine.
19. Gaggero responds with a letter dated September 18, 2002.
See exhibit:-

6. ( a )”Over the past eight months Jay has put forth a great effort in building
your business and has established a good foundation for a successful
Equestrian Facility. I’m sure we are all committed to making 2003 an even
better year. However, there are some issues, which must be addresses
immediately and resolved before we can address any terms for the future”.
( b )” In response to John’s letter of September 14, 2002, I am disappointed
and frustrated with the lack of financial information. We have made repeated
requests for “detailed” and “timely” financial information and it has not been
forthcoming. Our office has even taken the time to create spreadsheets and
templates for your easy use, still no data. This is particularly troubling
because there is clearly money that should have been paid to SMLLC that
has not been paid for several months, allegedly due to the lack of financial
information that would establish the RGA”.
( c )” I sympathize with your comment that your financial investment
has exceeded your expectations. SMLLC has also invested far more in
the facility that they ever intended. To date, SMLLC has spent
$104,332.15 on improvements. SMLLC committed to some of these
improvements during the lease negotiations, and true to their
commitment, they followed through. However, many were not and
were simply an additional, kind contribution to the anticipated success
of the facility and your business. Moreover, SMLLC also advanced
funds at Jay’s request, for the benefit of Somerset, and is presently
owed $12,795.57. Contrary to your understanding and comment, the
“problem” is not that I expect improvements to the facility at a faster
rate than Geraldine can finance. ALL improvements that you have
paid for or committed to were completely within Jay’s control and at
her discretion. For your review, I have enclosed the detail for all of
the aforementioned expenses and their allocation”.
( d ) “I guess I should have called you, John, but I was hopeful I could work
it out with Jay and Marsha and not trouble .you”.
( e ) “ We all think the world of Jay, applaud her tireless efforts and are
committed to making Somerset farms a success. Lets get it all on the
table on Saturday and sort out”.
20. In preparation for the scheduled meeting with Gaggero on September
21, 2002, John had a 3-way phone conference with Geraldine and Marsha
Adamson:

7. ( a ) John finds SFLLC is losing money at an alarming rate
( b ) There are no up to date financial records to examine
( c ) Geraldine is up to date on monthly minimum rent payments. September
has been paid.
( d ) Gaggero has overwhelmed SFLLC with spurious payments,…phoney
RGA , repairs, improvements, etc.,etc.
21. John sends letter, dated September 20, 2002 to “Steve”. ( exhibit).
John has come to the conclusion that the contract is now a dead issue and
that the only answer that makes business sense is to admit the obvious and
take corrective action. John and Maureen are still positive in this letter, still
trusting Gaggero to work things out. How wrong we were.
( a )” I am writing this so that we can avoid a meeting which disintegrates
into name calling, threats and counter threats”.
( b )” The crux of the matter is that the contract is a dead issue, Marsha’s
numbers show that Somerset is losing money every month and the basis of
payments and costs makes no sense. Geraldine is broke, she has no money.
She cannot subsidize Somerset from her personal income any longer. As I
said in my letter last week, there is no more money available from her
parents”.
( c )” We will save ourselves a lot of wasted time if we accept this
conclusion and instead concentrate on what we are going to do about it. A
full accounting through the end of September would be a useful start. A
review of our options on what to do about the improvements attached to
your September 18, letter is needed and finally where do we go from here”.
( d )” As I said before, Geraldine loves your ranch and does not want to
leave it. Also, she has spent a year of her life giving us a facility that we are
starting to be proud of. However, Geraldine cannot spend the majority of her
time on facility business if it generates no income for her. She must have the
freedom to pursue her training and horse sales”.
22. September 21, 2002 is the confrontation between Gaggero and Marsha
Adamson. John and Maureen have no idea what is happening. Marsha is
defending the Redmonds in a most clinical way. Gaggero is highly irrational,
opinionated, arrogant and condescending to Marsha. Exhibit pages 99, 100
and 101 from Marsha Adamson’s deposition.

8. 23. That is the basic termination of all communications. Gaggero harassed
Geraldine, SFLLC runs out of funds, Geraldine seeks and obtains a
restraining order against Gaggero, seeks legal advice to terminate the
boarders. Gaggero goes into his legal attack mode.
24. Three additional comments:
( a ) Gaggero’s declaration October 14, 2002
exhibit
( 1.) “ Even after if became apparent that Geraldine had intentionally
deceived her parents,……”
( b ) Second Amended Complaint Objecting to Discharge of Debtor-Second
Cause of Action—Section 20….
“ Alleges that the income of Maureen Redmond and foreign payments to
defendants were not reported”.
Running through the whole lawsuit is the implication that the Redmonds
have major foreign assets. See exhibits D.Chatfield to Steven Stanley dated
November 28, 2003 and December 22, 2003.
( a )”We believe that this is a better result than what your clients would
expect if they were required to liquidate all of their assets through a Chapter
7 bankruptcy. In a Chapter 7, we would expect that all of their real property
would be sold, including[ property owned in England, that all of their
savings and investments would be liquidated, including foreign investments,
and all preferences would be avoided. The assets would then be distributed
to creditors, including our client”.
( b )”Over a year ago, instead of honoring their obligations, your clients
embarked upon a campaign of fraud, deceit, theft, and scorched earth
litigation. They have foolishly burned through three law forms and hundreds
of thousands of dollars in legal fees and costs”.
We have stated often that there are no foreign assets, but obviously we are
not believed by Gaggero. Otherwise why would he incur over $617,000 of
legal costs in the Ventura Court, and why would he spend such a sum to
chase $25,000 damages? We understand Gaggero to be a very capable
business man.
25. Exhibit
“I guess I should have called you John…”

9. I have personal knowledge of the above facts and if called as a
witness I could and would so testify. I declare under penalty of perjury that
the above is true and correct.
I make this declaration on August 9, 2009 in Los Angeles
County.
Declarant.