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test cases. By order dated July 25, 1997, the Court denied
Mr. Kersting's motion as moot on the ground that Mr. Sticht's
subpoena had expired on June 26, 1996--the date of adjournment of
the original evidentiary hearing.
Mr. Sticht was unable to locate Mr. Kersting for purposes
of service of a new subpoena directing him to appear and testify
at the evidentiary hearing. Nevertheless, on August 7, 1997,
Mr. Kersting filed a Second Motion for Protection or to Quash
Subpoena asserting that he was too ill to travel from Hawaii to
Los Angeles for the evidentiary hearing because of recent cancer
surgery. Because Mr. Kersting did not appear at the supplemental
evidentiary hearing, the Court later denied Mr. Kersting's motion
as moot.
On August 18, 1997, the Court conducted a supplemental
evidentiary hearing in these cases in Los Angeles. Ms. Rinaldi
was the sole witness at the supplemental evidentiary hearing.
Ms. Rinaldi testified that she participated in the Kersting
programs during the taxable years 1980 and 1983-91 with her
husband, a flight engineer for American Airlines, with a view
towards profiting as a stock holder and for the tax benefits.87
Ms. Rinaldi testified that she believed that Kersting promissory
notes were enforceable against her. Ms. Rinaldi testified that
she relied upon and was assured by the various "Dear Friend"
letters that Mr. Kersting sent to her during the period 1981 to
87 Ms. Rinaldi testified that she legally separated from
her husband in 1994.
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