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E. Mr. DeCastro
Mr. DeCastro attended the trial of the test cases and
conducted Mr. Thompson's direct examination. Following the
trial, Mr. DeCastro filed an eight-page brief with the Court on
behalf of the Thompsons. Mr. DeCastro's brief included an
argument that the Thompsons entered into the Kersting programs in
dispute with the intention of making a profit. This argument was
based upon the Thompsons' prior investment experience with
Mr. Kersting, including their participation in the First Savings
acquisition. Mr. DeCastro's brief also acknowledged that "one
of the primary motives for the stock purchase was to realize
the substantial tax savings promised by the Kersting plan".
Mr. DeCastro also argued, contrary to Mr. Thompson's testimony,
that the promissory notes signed by the Thompsons "are valid and
enforceable." Mr. DeCastro filed no reply brief on behalf of the
Thompsons.
F. Comfort Letters
The record in the trial of the test cases included evidence
that Mr. Kersting had assured certain Kersting program
participants, whom Mr. Kersting referred to as "nervous Nellies",
that their primary loan obligations could be satisfied in full at
any time by mere surrender of the associated stock certificates.
In Dixon II, the Court summarized the evidence as follows:
[Mr. Kersting] testified that he provided so-called
"comfort letters" only to those "nervous Nellies" who
insisted on having them, which did not include any of
petitioners.
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