Durham Farms #1 - Page 16




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          herd and (2) asked whether the worker should adjust those cattle            
          numbers to allow for the 10-percent annual herd increase required           
          in the sharecrop agreements between the partnerships and                    
          Management.  In his written response to the October 24, 1989,               
          memorandum, Jay Hoyt told the worker not to make allowances in              
          the cattle numbers for the 10-percent annual herd increase                  
          requirement.  In a later memorandum dated December 31, 1990, to             
          Jay Hoyt, the worker stated that it was impossible to reconcile             
          Management’s financial statements with the tax returns the Hoyt             
          organization had prepared.  The worker added that Jay Hoyt was              
          right in previously stating Management’s financial statements to            
          be a “mess”.  In another memorandum to Jay Hoyt dated January 7,            
          1991, the worker raised certain questions with him concerning the           
          billing of cattle boarding expenses for the 1990 fiscal year to             
          the cattle-breeding partnerships.  Among other things, the worker           
          questioned why Florin Farms #1 (FF #1), FF #3, and FF #4 were to            
          be billed for such expenses, as the worker thought those                    
          partnerships had been liquidated and had no cattle.  See supra              
          note 9.  In his written reply to the worker, Jay Hoyt stated that           
          the money to have been distributed to FF #1, FF #3, and FF #4,              
          had instead been used by him to pay attorney's fees.  He further            
          stated that all of the cattle collectively owned by the first 17            
          cattle-breeding partnerships the Hoyt family had organized had              
          been reallocated among each of those 17 partnerships during 1990,           






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