Estate of Robert G. Kluener, Deceased, Donald E. Hathaway, Co-executor and Charlotte J. Kluener - Page 25

            resources were focused on promoting only one product.  We are not                             
            persuaded that, even with his health problems, Mr. Kluener did                                
            not have control over how APECO's resources were to be used                                   
            without resorting to deception.  We note that Mr. Kluener did not                             
            appear concerned that he could not control the $1,500,000 that                                
            Fifth Third loaned to APECO at approximately the time of the                                  
            transfer of the horses into the name of APECO.  Furthermore, Mr.                              
            Kluener appears generally to have dealt with concerns about                                   
            control by funding APECO with periodic loans rather than by                                   
            hiding funds.                                                                                 
                  The complete control exercised by Mr. Kluener over the                                  
            horses and the accounts containing the sales proceeds also                                    
            indicates to us that the proceeds of the horse sales were not                                 
            intended for use by APECO.  APECO Equine's affairs were handled                               
            at Mr. Kluener's business office by himself and his assistant,                                
            and the financial and administrative affairs relating to the                                  
            horses were conducted in the same manner as they had been when                                
            the horses were titled in Mr. Kluener's name.  While his                                      
            assistant was nominally an APECO employee, Mr. Kluener continued                              
            to reimburse APECO for the cost of her compensation after the                                 
            transfer, indicating that all of her services were performed for                              
            his, rather than APECO's, benefit.  Only Mr. Kluener and his                                  
            assistant had signature authority with respect to the checking                                
            account in APECO Equine's name, and only Mr. Kluener could                                    
            authorize transactions with respect to the Legg Mason account in                              
            its name.                                                                                     




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