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companies are making loans, leasing cars and factoring
accounts in any meaningful business sense is without
any merit.
Further, I believe we will find that Kersting did
not do many of the "house keeping" accounting and legal
matters which needed to be done to qualify his schemes
before the IRS, even if there was an arguable business
purpose position for his schemes under the tax code.
In my estimation, those clients of Kersting who
continue to be represented by Kersting's lawyers are
headed towards a nightmare. Interest continues to
mount on the taxes due. By the time the pilots finally
get a decision from the tax court, they will be in
terrible financial condition. Of course, they will
still have to pay the tax since bankruptcy will not
terminate their tax liability.
Those who are smart enough should disassociate
themselves from Kersting's lawyers now, obtain their
own counsel, offer their testimony as part of their
negotiations with the IRS and buy out as cheap as they
can now!
There is no evidence in the record that the Thompsons have
ever filed a lawsuit against Mr. Kersting or that Mr. Kersting
has ever filed a lawsuit against the Thompsons. There is no
documentation in the record to support Mr. Thompson's statement
to Mr. Kersting in 1986 that in 1982 he had asked Mr. Kersting to
terminate Mr. Thompson's participation in the Kersting programs.
B. The Alexander Dispute
As previously mentioned, Mr. Alexander first met
Mr. Kersting in Los Angeles in the early 1960's. In the mid-
1970's, Mr. Alexander lent over $100,000 to Mr. Kersting to
assist him in the acquisition of Cosmopolitan Financial Corp.
Mr. Alexander's creditor's interest in Cosmopolitan evolved into
a stock interest in Charter Financial. Mr. Alexander also lent
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