Exhibits 5-7

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					 Case 09-04032   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23   Desc
                        Exhibit(s) 5-7 Page 1 of 38




              EXHIBITS 5-7
TO SANDRA SMALLEY-FLEMING’S AFFIDAVIT
  IN SUPPORT OF THE MOTION OF JOHN R.
   STOEBNER, CHAPTER 7 TRUSTEE, FOR
      PARTIAL SUMMARY JUDGMENT
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                   Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                       Desc
                                                        Exhibit(s) 5-7 Page 2 of 38
             t.
             .-
         I
     L



                                                   WRTTEN ACTION IN LIEU OF MEETING
                                                     OF FIRST BOAR OF DIRECTORS
                                                                 OF
                                                                  PETTERS COMPANY. INC.


                           The undersigned, being the sole member of the Board of Directors of Petters Compay,
                   Inc., a Minnesota corpration, acting pursuant to the provisions of Minesota Statutes, Section
                   302A239, does hereby adopt the following resolutions, as of Apnl 28, i 994:


                                              Acknowledgment of         Filing of Articles of    Incorporation



                        RESOLVED, that the director hereby acknowledges that Articles ofIncorporation of Petters
                   Company, Inc. were fied with the Secretar of State of the State of Minesota on April 28, 1994,
                   and that a Certficate of      Incorporation has been issued to this corration.




                                                           Payment of Incorporation Expenses

                          RESOLVED, that all fees, costs and other expenses incured in effecting the incorporation
                   and organzation of ths corpration and the commencement of its business operations be and the
                   same ar hereby ordered to be paid as promptly as possible.



                                                                     Adoption ofByiaws

                            RESOLVED, that Bylaws in the proposed fomi prepared by counsel for the corporation and
                  submitted to the director be and they hereby are adopted as the Bylaws of this corporation and that
                  such Bylaws be certified by an offcer of the corporation and inserted in the minute book.


                                                                      Corporate Sea)

                            RESOLVED, that the corporation shall have no corporate seal.


                                                       Adoption of Form of Stock Certifcate

                           RESOLVED, that a stock certificate representing the stock of the corporation, substantially
                  similar in form to the sample presented to the director, be and the sae hereby is adopted as the
                  form of stock cerificate of the corpration to represent such shares of stock.




                                                                                                                                GOVERNNT
                                                                                                                                  EXmIT
                                                                            - i -
                                                                                                                                    17
                                                                                                                               08cr364(RAJ)
                                                                                                EXHIBIT
                                                                                                                 tie-.
                                                                                                     If
                                                                                                                                          0017.0001
                                                                                                                               EXHIBIT

                                                                                                                              l ~
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           Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                        Desc
                                                Exhibit(s) 5-7 Page 3 of 38
     1',



                                                                  Issuance of Stock

                     WHREAS, Thomas J. Petters has indicated his willngness to purchase one thousand
           (1,000) shares of stock of the corporation for an aggregate price of$5,000;

                     NOW, TIEREFORE, RESOLVED, that such subscription be and it hereby is accepted;
           and upon payment of the aforesaid purchase pnce by Thomas J. Petters, ths corporation shall
           and its offcers be and they hereby arc authorized and directed to isime to Thomas J. Petters one
           thousand (1,000) shares of stock and to execute and deliver an appropnate stock certificate
           representing the same, which shares shall thereupon constitute fully paid and nonassessable stock
           oftbe corporation.


                     FUTHER RESOLVED, that as of the date of these resolutions, the corporation's equity
           was less than $1,000,000, and the stock issued in accordance with the terms of                         ths resolution may
           be deemed to be stock issued under and puruant to the provisions of Section 1244 of the Internal
           Revenue Code of. i 986, as amended, which shall be noted on the certficates to be issued.


                                                                Election of Officers

                  RESOLVED, that the following persons be and they hereby are elected to the offces set
           fort opposite their respective naes, to serve until the next election of offcers and until their
           successors shall have been duly elected and quaified:

                                Thomas J. Petters                        Chairman of        the Board, Chief   Executive Offcer
                                                                         and President
                               Deana Coleman                             Vice President of Operations and Secretar
                               Robert D. Whte                            Treasurer


                                               Election Pursuant to Subchapter S to Have
                                          Corporate Income Taxed DirectiY to Shareholders

                   RESOLVED, that the corporation hereby elects to have its corporate net income for its fiscal
           years commencing 1994 taxed directly pro rata to its shareholders rather than to the corporation, in
           accordace with Subchapter S of the Internal Revenue Code and Section 290.9725-290.974 of the
           Minnesota Income Tax Act; and the President and/or any other appropriate offcer of ths
           corpration be and they hereby are authorized and directed, for and on behalf and in the name of
           this corporation, to execute and deliver such documents and notices and to take such further action
           as may be necessar or advisable in order to effectute such election by the corpration.




                                                                            - 2-



                                                                                                                                       0017.0002
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           Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                   Desc
                                                Exhibit(s) 5-7 Page 4 of 38

     )'
..

                                                                     Fiscal Year

                    RESOLVED, that the fisca year of the corporation shall end on the last day of   December of
           each   year.


                                                     Adoption of Banking Resolulions

                  RESOLVED, that the offcers of the corporation shall designate a ban as a depository for
           the fuds of the corporation and that the offcers of the corporation shall be authonzed to make
           deposits therein and withdraw fuds therefrom, and make loans, either secured or Wlsecured frm
           such ban, all ín accordace with the detaled resolutions set fort on the ban's form of resolution,
           which is inco""ied hen as fully as though specifioaly se ~


                                                                                  il~
           4203237 JDOC




                                                                          -3-




                                                                                                                  0017.0003
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     Case 09-04032   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23   Desc
                            Exhibit(s) 5-7 Page 5 of 38
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                      Case 09-04032             Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                  Desc
                                                       Exhibit(s) 5-7 Page 6 of 38
                                                           Deanna L. Coleman, Vol. I - 7/28/2010
                                                                In re: Polaroid Corporation, et al.

                                                                                                                                          Page 1
                                             DEANNA L. COLEMAN, VOLUME I - 7/28/10
                                                     UNITED STATES BANKRUPTCY COURT
                                                          DISTRICT OF MINNESOTA
                                - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - --
                                In re:                       JOINTLY ADMINISTERED UNDER
                                                                   CASE NO. 08-46617
                                POLAROID CORPORATION, ET AL.,
                                                        Debtors.
                                 (includes:
                              Polaroid         Holding Company;
                              Polaroid         Consumer Electronics, LLC;
                              Polaroid         Capital, LLC;
                              Polaroid         Latin America I Corporation;
                              Polaroid         Asia Pacific LLC;
                              Polaroid         International Holding LLC;                                         CERTIFIED
                              Polaroid
                              Polaroid
                                               New Bedford Real Estate, LLC;
                                               Norwood Real Estate, LLC;
                                                                                                                 TRANSCRIPT
          '",
                              Polaroid         Waltham Real Estate, LLC)

                              - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - --

                              John R. Stoebner, Chapter 7 Trustee,

                                                        Plaintiff,
                                           vs.                                                       ADV. No. 09-4032

                            Ritchie Capital Management, L.L.C.,
                            as adrinistrati ve and collateral agent,
                            Ri tchie Special Credit Investments, Ltd.,
                            Rhone Holdings II, Ltd., Yorkville
                            Investments I, L. L. C., and Ritchie Capital
                            Structure Arbitrage Trading, Ltd.,
                                        Defendants.
                            - - --- - - - - -- - -- - --- - - - - ---- - - -- - - - - -- - -- - --- - -- - -- -- --

                              VIDEOTAPED DEPOSITION OF DEANNA L. COLEMAN, VOLUME I
(
t
".... .
                                                                                                                                          EXHIBIT
                        ~.ß-jr~t\'..'E


                                                                   Depo International, Inc.
                                                                                                                                   l        ¿       I
                                         (763) 591-0535 or (800) 591-9722 adni@depointernatlOnal.com
        ..                                                ..                               ..                                              ..                    04

                       Case 09-04032                  Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                         Desc
                                                             Exhibit(s) 5-7 Page 7 of 38
                                                               Deanna L. Coleman, Vol. I - 7/28/2010
                                                                  In re: Polaroid Corporation, et al.
                                                                                Page 22                                                                Page 24
                   1              DEANNA L. COLEMAN, VOLUME I -             7/28/I 0           1         DEANNA L. COLEMAN, VOLUME I - 7/28/10
                  2           you prepared around October 27th, 2004?                          2          Q. What did you tell the U.S. Attorney's
                  3                A.    Yes.                                                  3    Offce and the FBI?
                  4                Q.    What were the circumstances that led                  4          A. That Petters Company is a Ponzi scheme;
                  5           you to write this letter?                                        5   that we were $3.5 bilion in debt, and told them who
                  6             A. Tom would keep tellng Bob and myself                        6   was involved in it, it was Tom, myself, Bob White, and
                  7       that he would get out of debt; that he would find a                  7   that Larry and Mike were receiving funds and wiring
                  8       way to get out. He was spending money on buying                      8   back to us and we were making up purchase orders and
                  9       companies and spending money on personal use, and i                  9   the investors thought it was real purchase orders,
             10           just kept seeing a lot of money going out the doors              10      real deals.
             11           and nothing coming back and nothing trying to fix the            11            Q. Who are Lany and Mike?
             12           debt, and I just got fed up with it and I got tired of           12            A. From Nationwide International and
             13           it and I wrote him this letter because I was kind of             13      Enchanted Buying Group.
             14           losing trust in him.                                             14            Q. Lany Reynolds and Mike Catain?
             15                Q.    At this point in time what was the                   15             A. Yes.
             16           amount of the debt that related to the sham                     16             Q. Did you tell them about the false
             17           transactions?                                                   17       purchase orders?
             18                    A.I couldn't even take a guess on that.                18             A. Yes.
             19                   Q. Was it in excess of$10 milion?                       19             Q. And did you admit.         your own involvement
             20                   A. Oh, yeah.                                            20       in the scheme?
             21                 Q.   Was it in excess of 100 million?                     21             A. I  did.
             22                 A.   I'm sure it was. '04, yeah, I honestly               22             Q. Did you agree to wear a wire to record
             23           don't know what the debt was in 2004.                           23       conversations with Tom Petters and Robert White?
             24                 Q.   The concern that you were expressing at              24             A. Yes.
             25           this time was a concern that as a result of your                25             Q. From that day on did you, beginning
                                                                            Page 23                                                                    Page 25
                1              DEANNA L. COLEMAN, VOLUME I - 7/28/10                       1             DEANA L. COLEMAN, VOLUM I - 7/28/10
               2          activities relating to these sham transactions, that             2       that day did you wear a wire and record conversations
               3          you might go to prison?                                          3       with Tom Petters and Robert White?
               4                  A.Right. He kept spending money on all                   4             A. Yes.
               5          of these other corporations and all of them were                 5                (Whereupon, Ritchie/Acorn
               6         losing money.                                                     6                  Deposition Exhibit No. 20 was
               7               Q.   What was Tom Petters telling you at                    7                  marked for identification.)
               8         that time as to how he would address the problem?                 8       BY MR. FLEMING:
               9               A. He would always tell me that he had a                    9             Q. Showing you Exhibit 20, is this the
             10          way of getting all-- all of these other companies                10       list that you brought with you when you went to the
             11          that he had, like Celine Countrymen, and I don't know            11       FBI and the U.S. Attorney's Office on September 8,
             12          if he had Polaroid at this time, Fingerhut and all of            12       2008?
             13          these other companies, that is how he was going to be            13             A. It looks like it.
             14          able to bury the debt and ge.t out of debt.                      14             Q. Is this a list that identifies each of
             15              Q.    Let's go forward in time to September                  15       the individuals or companies that had outstanding
             16          8, 2008. Where did you go on that day?                           16       loans to PC   I?
             17               A. To the FBI.                                              17             A. Yes.
             18               Q.   Okay. Were you accompanied by your                     18             Q. What was the total amount of          the loans
             19          counsel, Allan Caplan?                                           19       at that time?
             20                   A.    Yes.                                              20             A. 3 billion 522 -- 3 bilon - no,
             21                   Q.    Did you meet both with the FBI and the            21       3,522,880,000.
             22          U.S. Attorney's Office?                                          22              Q. And if   you look at the list, about a
             23               A. Yes.                                                     23       little past halfway down, Ritchie Capital is mentioned
             24                   Q.    Did you meet with Joe Dixon that day?             24       on two lines. On the first line, what does it list
(            25                  A.     Yes.                                              25       their debt as?
    (         ',.',.~\i.~~.

                                                                                                                                 7 (Pages 22 to 25)
                                                                        Depo International, Inc.
                                               (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                            ..                                ..                                          ..
              Case 09-04032             Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                    Desc
                                               Exhibit(s) 5-7 Page 8 of 38

                                                   Deanna L. Cole-man, Vol. I - 7/28/2010
                                                      In re: Polaroid Corporation, et al.
                                                               Page 26                                                              Page 28


        2
         1

                     A.On31 nuon. 2
                         DEANA L. COLEMA, VOLUM I - 7/28/10 1                        DEANNA L. COLEMA, VOLUME I - 7/28/10
                                                                                      A. Yes.
        3
        4
        5
                     A. 175nuon. 4
                     Q.   the next line? 3
                           Q. Who are the individuals in the very far 5
                                                                                      Q. What was your understanding as to the
                                                                                charges that were -- the cnminal charges that were
                                                                                filed against you after you went to the FBI and the
        6
        7
        8
                    provided? 7
                    nght column after the amounts of the loans are 6

                           A. Those are the main people that I would 8
                                                                                U.s. Attorney's Offce?
                                                                                      A. It was mail fraud.
                                                                                      Q. The date reflected on the final page of
        9           deal with directly. 9                                       this document, page 5, what is the date?
   10
   11
   12
   13
   14
                          A. Yes. 12
                        Q. SO for Ritchie Capital and the $175 10
                    million loan, you identified Joli Wappler? 11

                          Q. And who are the persons identified next 13
                    to the $31 million loan provided by Ritchie? 14
                                                                                      A. October 6, 2008.
                                                                                      Q. Was it your understanding that this
                                                                                basically represented the commencement of

                                                                                proceedings against you?
                                                                                      A. Yes.
                                                                                                                                 the criminal



   15                     A. Gregg Colburn and Lance -- I think that 15                    (Whereupon, Ritchie/Acorn
   16               is wrong though. That should have been up one. 16                      Deposition Exhibit No. 22 was
                                                                                          marked for identification.)
   17
  is                      A. Correct, yes. 18
                         Q. They should be by Interlachen? 17
                                                                                BY MR. FLEMING:
  19
  20
  21
  22
  23
                     A. Yes. 21
                        Q. And going down following Ritchie 19
                    Capital, is there also a line entry for Acorn Capital? 20


                    outstanding loans? 23
                          Q. And what was the amount of their 22
                                                                                     Q. Showing you Exhibit 22, is this the
                                                                                plea agreement and sentencing stipulation that you
                                                                                entered into with the U.S. government?
                                                                                     A. Yes.
                                                                                     Q. This reflects the guilty plea that you
  24                      A. $232 millon. 24                                    agreed to to resolve the criminal charges against you?
  25
.................         Q. Who is identified as theuuu.)' 25                        A. Yes.
                                                              Page 27                                                               Page 29


      2 A. Marlon Quan. 2
      3 contact person? 3
      1 DEANNA L. COLEMAN, VOLUM I - 7/28/1 0 1                                      DEANNA L. COLEMAN, VOLUME I - 7/28/10
                                                                                     Q. You pled guilty to mail fraud and money
                                                                                laundering?
      4 Q. Now, did you subsequently listen to the 4                                 A. I thought it was just mail fraud.


      7 A. Yes. 7
      5 tapes that you recorded following September 8th 5
      6 through the following weeks? 6
      8 Q. Were they true and accurate when you 8
      9 listened to the tapes, did they accurately reflect 9
                                                                                     Q. You know what, you are right. On page
                                                                                1 it says you pled guilty to count one ofthe
                                                                                information which charges the defendant with
                                                                                conspiracy to commit mail fraud, that is what you pled
                                                                                to?



12 A. Yes. 12
 10 what you had heard at the time you made the 10                                   A. Yes.
 11 recordings? 11                                                                   Q. And the factual basis to that guilty
                                                                                plea is conta.ined on pagesl. through 3 of this
13 Q. You have also seen the transcnpts of 13
15 A. Yes. 15
                                                                                document?
14 these tape recordings? 14                                                         A. Yes.
                                                                                     Q. That factual basis includes the
16 Q. Are the transcnpts of these tape 16
18 A. Yes. 18
                                                                                statement at the bottom of page 1 and the top of page
17 recordings also true and accurate? 17                                        2 that, "On behalf of PCL, and at the direction of
                                                                                Thomas Petters, the owner and president of PC    I, that
19 (Whereupon, Ritchie/Acorn 19                                                 you worked with Robert White to fabricate documents
20 Deposition Exhibit No. 21 was 20                                             used by Petters and others to induce third parties to
21 marked for identification.) 21
22 BY                  MR.     FLEMING: 22
23 Q. Showing you Exhibit 21, is this the 23
                                                                                provide PCL with billions of dollars in loans"?
                                                                                     A. Yes.
                                                                                     Q. Go to page 3. It states in the first
24 information which is the document that reflects the 24                       full paragraph, "The current debt of PCL is more than
25 cnminal charges against you? 25
   ,,:il~,'"i:W$;:'£&ii'm-e:
                                                                                $3 billion, much of which was obtained through the

                                                                                                           8 (Pages 26 to 29)
                                                          Depo International, Inc.
                                  (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                    ..                             ..                                             ..
Case 09-04032   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                               Desc
                       Exhibit(s) 5-7 Page 9 of 38

                     Deanna L. Coleman, VoL. I - 7/28/2010
                           In re: Polaroid Corporation, et al.
                                                                                                         Page 32
                                                      DEANNA L COLEMAN, VOLUME I - 7/28/10
                                                 then they would reinvest it right away. A lot of  the
                                                 individual investors, they would keep rolling, like
                                                 Dean Vlahos, he would kee rolling, but the hedge
                                                 funds, the larger investors, they would want the money
                                                 back and then the next day they would reinvest
                                                 BY MR. FLEMING:
                                                       Q. When that would occur, that is, the
                                                 circumstance where instead of a loan being rolled
                                                 over, instead you would actually send the money back
                                                 with the understanding that the investor would retum
                                                 the money, at whose initiative would that be, is that
                                                 something that you would suggest or was it something
                                                 that the investor would request?
                                                            MR. ROSOW: Object to form.
                                                 BY MR. FLEMING:
                                                       Q. Or would it depend on the circumstances
                                                 each time?
                                                       A. It would depend each time. A lot of it
                                                 was just routine where the investor just automatically
                                                 would do it, and then if they weren't going to, they
                                                 would let us know. For example, like with Frank
                                                 Vennes, he would always ask what purchase order we hac
                                                 to put the money back into before it was even paid
                                                 off. With Acorn Capital, it was something we had done
                                                                                                         Page 33
                                                      DEANNA L. COLEMAN, VOLUME I - 7/28/10
                                                 for so many years, we just assumed they were going to
                                                 reinvest it, which I guess they always did.
                                                      Q. When are you going to be sentenced?
                                                      A. On September 2nd.
                                                      Q. Who is the presiding judge?
                                                      A. Judge Kyle.
                                                      Q. What is your understanding as to the
                                                 maximum punishment that you face?
                                                      A. Five years.
                                                       Q. This is a thick exhibit, but I'm going
                                                 to ask very few questions about it.
                                                             (Whereupon, Ritchie/Acorn
                                                             Deposition Exhibit No. 23 was
                                                             marked for identification.)
                                                 BY MR. FLEMING:
                                                       Q. Showing you Exhibit 23, I will
                                                 represent to you that that is a transcript of your
                                                 testimony from Tom Petters' criminal tral. You did
                                                 testify at the criminal tral of Tom Petters, is that
                                                 right?
                                                       A. Yes.
                                                       Q. And you were under oath?
                                                       A. Yes.
                                                       Q.     And you testified trthfully?

                                                                            9 (Pages 30 to 33)
                               Depo International, Inc.
          (763) 591-0535 or (800) 591-9722 admi@depointernational.com
             ..                              ..                                ..                                    ..
      Case 09-04032             Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                             Desc
                                       Exhibit(s) 5-7 Page 10 of 38

                                       Deanna L. Coleman, VoL. I - 7/28/2010
                                           In re: Polaroid Corporation, et al.
                                                                                                                      Page 36


                  A. Yes. 2
                                                     Page 34

  i               DEANA L COLEMA, VOLUM I - 7/28/10 1                    DEANNA L COLEMAN, VOLUME I - 7/28/10
  2                                                                  BY MR. FLEMING:
  3               Q. Now, let's talk about the time period 3              Q. That is the persons providing the
  4     2007 to 2008. Now, at that time with respect to the 4        loans, what were they being told about the nature of
  5      loans that Tom Petters was obtaining for PCI, what was 5    the business?
                                                                               MR. CAULEY: Objection. Speculation.




10
  6
  7
  8
  9
        loans? 10        8
        your understanding of   what Tom Petters was telling the 6
        persons and the entities that were providing these 7


        for speculation.
                     MR. CAULEY: Object to the form. Calls 9
                                                                     Lack of foundation.
                                                                               MR. ROSOW: I join in the objection.
                                                                               THE WITNESS: Nothing different than
                                                                     what they were being told before. Like I said, back
                                                                     then, the regular investors like Acorn Capital and
11
12
13
        BY        MR. FLEMING: 12
                     MR. ROSOW: Join in the objection. 11

                  Q. Go ahead. What was your understanding 13
                                                                     Frank Vennes, it was the same thing they were
                                                                     investing in five years ago, electronics, electronic
14      as to what the investors, those persons providing the 14     goods, buying and selling diverting goods.
15      loans were being told about what they were investing 15      BY MR. FLEMING:
16      in or what the loans were being used for? 16                      Q. And was it your understanding that
17                   MR. CAULEY: The same objection to the 17        investors were being told that PCI was putting up its
18      extent it calls for speculation. 18                          own money into the deals?
                                                                          A. On some of it, yes.
        them in FLEMIG: 21
        BY MR. general? 20
19                   THE WITNSS: What investor, all of 19
20                                                                        Q. How much was PCI supposedly putting
21                                                                   into the deals?
22                Q. In general, during that time, the last 22            A. Whatever the investor didn't invest, so
23      couple of     years, 2007 to 2008. 23                        if Petters Company purchase orders were for 3,250,000
24
25      And it calls for 25
                     MR. CAULEY: Same objections. Vague. 24          and the investor put in 3 milion, Petters Company
                                                                     would be putting in 250,000. If the investor put in 2
                                                                                                                      Page 37
                                                     Page 35
  i DEANNA L COLEMAN, VOLUME I - flLSfl U i                              DEANNA L. COLEMAN, VOLUME I - 7/28/10
  2 THE WITNSS: A lot of it was just 2                               milion, Petters Company would be puttng in
  3 routine. I guess I'm not sure what Tom was tel1ing 3             1,250,000.
  4 them what their money was being invested for. I don't 4                Q. What proof did PCI provide to its
  5 know if that was necessary. Like I said, it was 5                investors, that is, those persons providing the loans,
  6 routine. The investors just knew it was electronics. 6           that it was actually engaging in this diverting
  7 Nothing had changed in what they were investing their 7          business, that is, actually buying merchandise,
  8 money in in 2007 and 2008 versus 2004. 8                         electronic goods and reselling them to the big box
  9 BY MR. FLEMING: 9
10 Q. During that time period, I understand 10
                                                                     retailers?
                                                                               MR. ROSOW: Object to form and
1 i nothing had changed, but what was supposed to be the 1 i         foundation.

13 utilized for? 13
12 nature of         the business that the loans were being 12
14 MR. CAULEY: The same objection. 14
                                                                              THE WITNESS: Just a copy of the
                                                                     Petters Company purchase order and a copy of the
                                                                     vendors purchase order.
15 MR. ROSOW: I                 15
                    join. they 16
16 THE WITNSS: The same as what
                                                                     BY MR. FLEMING:
                                                                          Q. SO, first of all, the Petters Company's
17 were before, to support Tom's life style, to pay 17               purchase orders, those were fictitious purchase
18 workig capital, to payoff other investors. 18                     orders?
19 BY MR. FLEMING: 19
20 Q. What you are tel1ing me is what the 20
                                                                          A. Yes.
                                                                          Q. They were created or prepared either by
21 loan proceeds, how they were actual1y utilized. What 21           Robert White or yourself?
22 I'm asking you is what was your understanding as to 22                 A. The Petters Company one was created by
23 what the investors were being told? 23                            myself.
24 MR. CAULEY: Objection. Cal1s for 24                                    Q. That would reflect a purchase from
25 speculation. 25                                                   Nationwide or Enchanted?

                                                                                          10 (Pages 34 to 37)
                                                  Depo International, Inc.
                          (763) 591-0535 or (800) 591-9722 admin@depointernational.com
                 ..                                 ..                                  ..                                     ..
         Case 09-04032                Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                             Desc
                                             Exhibit(s) 5-7 Page 11 of 38

                                             Deanna L. Coleman, VoL. I - 7/28/2010
                                                 In re: Polaroid Corporation, et al.
                                                          Page 50                                                             Page 52 :
         1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                               DEANNA L. COLEMAN, VOLUME I - 7/28/10


         4 to Acorn. 4
         2 what they wanted was a check or a wire transfer and 2
         3 then they would go in and offer so much on the dollar 3


         5 BY MR. FLEMING: 5
                                                                                  A. Prett much all ofthe companies that
                                                                             Tom had owned except for Fingerhut and uBid.
                                                                                  Q. Who paid for the salaries of
                                                                             Petters Company employees?
                                                                                                                       the



         8 notes? 8
         6 Q. This was a time when a third-party, 6
         7 that is Fortress, was considering buying out the Acorn 7

         9 A. Acorn and Palm Beach notes, yes. And I 9
  10 do believe this, I said Acorn earlier. I think this 10
                                                                                  A. Petters Company.
                                                                                  Q. Did that include Petters Group
                                                                            Worldwide executives?
                                                                                 A. Yes.
                                                                                 Q. Now, at some point in time did Tom
 11 was probably more Palm Beach. 1 1                                       Petters determine that PCI was not going to fund the
 12 Q. During the time period 2004 to 2008, 12                              other companies?
 13 did any of            the businesses owned by Petters make money? 13         A. He would say that. I heard that from
 14 MR. CAULEY: Objection. Calls for 14                                     time to time that he wasn't going to fund anymore.
 15 speculation. Lack offoundation. 15                                           Q. What would happen thereafter?
 16 THE WITNESS: I did not see the 16                                            A. I was happy about it but I knew it
 17 financial statements for all of the other companies, 17                 wasn't going to happen. Employees need to get paid,
 18 so I guess honestly I can't answer that. I believe 18                   expenses need to get paid.
 19 Fingerhut was doing okay, and I believe that is 19
                                                                                Q. What was your salary at PCI?
 20 probably the only one. Like I said, I didn't see the 20                     A. $330,000 I believe it was.

                        FLEMING: 22
 21 financial statements, so I'm not sure. 21
 22 BY            MR.

 23 Q. Was it your understanding that -- were 23
                                                                                Q. For how many years were you getting
                                                                            that salary?
                                                                                 A. You know, I would have to look at the
 24 you involved at all in the purchase of Polaroid? 24                     records. I couldn't tell you. Maybe five. Maybe a
 25 A. I was involved in raising the money. I 25                            little longer'EiE~!iir?1l11~!~~re:
                                                         Page 51



            ~~~ 35
                                                                                                                             Page 53
     1            DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                       DEANNA L. COLEMAN, VOLUME I - 7/28/10
  2         was not involved in the purchase, the actual purchase 2            Q. In addition to that you received
  3                                                                        bonuses?
  4
  5
  6
            for Polaroid?
                  Q. Was it your understanding that PCI paid 4
                        MR. CAULEY: Objection. Calls for 6
                                                                                A. Yes.
                                                                                Q. What were the amounts of         the bonuses?
                                                                                A. I think I started out like in 2004,
  7         speculation. Lack offoundation. 7                              2005, 2004 I think it was where I started out, I
  8                     MR. ROSOW: Join in the objection. 8                received my first $1 milion bonus and then through
                        THE WITNESS: Yes, PCI paid for 9
10
11
  9
                   it anyway. 10
            BY MR. FLEMING: 11
            Polaroid, 99 percent of
                                                                           2008, 2007, it was up to 3 milion, I think it was.
                                                                                Q. SO in the last couple of years, 2006,
                                                                           2007, were you receiving bonuses in the $3 to $3.5
12                Q. And PCI paid for it by using money it 12              million range?
Í3          had obtained from investors? 13                                     A. 2006, 2007, yes. I think 2006 it was 3
14                      MR. CAULEY: Objection. Lack of 14                  milion and 20073.5, and 2008 it went down because I
15         foundation. Calls for speculation. 15                           was going through a divorce.
16                      MR. ROSOW: Join in the objections. 16                   Q. . Who paid for the bonuses that were
17         And leading. .... 17                                            given to Petters Company employees?

              MR. FLEMING: 18
           BY THE WITNESS: Yes. 19
18                                                                             A. Petters Company, Inc.?
19                                                                             Q. Yes.
20               Q. During the time period 2004 to 2008, 20                    A. Through investors.
21
22
23
24
25
            A. Yes.to? 25
           companies? 22
           operating funds
                           23
           was PCI providing operating funds to other Petters 21


                 Q. What companies was PCI providing 24
                                                                               Q. And with regard to the other Petters
                                                                           Company, who paid the bonuses, what company provided
                                                                           the funds, what Petters Company provided the fuds to
                                                                           pay for the bonuses given to employees of Petters who
                                                                           were not working for Petters Company, Inc.?

                                                                                                  14 (Pages 50 to 53)
                                                    Depo International, Inc.
                             (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                ..                            ..                                 ..                                  ..
                    Case 09-04032              Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                      Desc
                                                      Exhibit(s) 5-7 Page 12 of 38

                                                     Deanna L. Coleman, Vol. I - 7/28/2010
                                                        In re: Polaroid Corporation, et al.
                                                                Page 54                                                       Page 56
                                                                                                                                            ¡
                1         DEANNA L. COLEMA, VOLUME I - 7/28/10 1                   DEANNA L. COLEMA, VOLUME I - 7/28/10 \
            2              A. Petters Company, Inc. did. 2                      Worldwide.
                3          Q. SO all of      the bonuses were paid by PCI 3
                4    even for the persons who were not working for PCI? 4              (Whereupon, Ritchie/Acorn
                5          A. Yes. They were all paid by PCI and 5                     Deposition Exhibit No. 26 was
                6    then Jim Wehmhoffwould give them a 1099 on their 6                marked for identification.)
            7        bonus from PCI. 7                                          BY MR. FLEMING:
                8                 (Whereupon, Ritchie/Acorn 8                      Q. Showing you Exhibit 26 --
                9                 Deposition Exhibit No. 25 was 9                        MR. ROSOW: Terr, hold on just a
        10                        marked for identification.) 10                moment until we get copies. Thank you.
        11           BY MR. FLEMING: 11                                                MR. FLEMING: Are you ready?
                                                                                       MR. ROSOW: Yes.
        12                 Q. Showing you Exhibit 25, are these 12
        13
        14
        15                 A. Yes. 15
                     copies of    the bonus checks that were provided to 13
                     Petters employees at year end 2006? 14
                                                                                BY MR. FLEMING:
                                                                                    Q. Is Exhibit 26, are these copies of
                                                                                                                           the
                                                                                bonus checks that were paid at year end 2007?


                           A. Yes. 18
        16                 Q. It looks like all of these checks were 16             A. Yes.
        17           drawn on Petters Company, Inc. account at Crown Bank? 17       Q. These checks were all drawn on Petters
        18                                                                      Company, Inc. account at Crown Bank?
        19                 Q. If you go through these checks, for 19                A. Yes.



                           A. Yes. 22
       20            example, on the second page, is that a million dollar 20       Q. If   you tum to page 2, is that a
       21            bonus check to Bill Dunlap? 21                             1,250,000 bonus check payable to Dave Baer?
       22                                                                           A. Yes.
       23                  Q. If you go to the page that has a 6 on 23              Q. The following page is a million dollar
       24
       25
     I.......
                     to Bob White? 25
                     the bottom right, is that a $2 million bonus payment 24    bonus payable to Tom Hay?
                                                                                    A. Yes.




                          A. Yes. 2
                                                                Page 55                                                           Page 57

            1             DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                   DEANNA L. COLEMAN, VOLUME I - 7/28/10
            2                                                                        Q. Tum to the page that has a 14 on the
            3                      you go to the page that on the 3             bottom right. Is that a million dollar bonus check


                          A. Yes. 6
                          Q. If
            4        bottom right has a lOon it, is that a $1.3 millon 4        paid to Mary Jeffries?
            5        bonus check to Tom Hays? 5                                      A. Yes.
            6                                                                        Q. If  you go to page 25, is that a
            7             Q. And then the next two checks are your 7            $500,000 bonus payment made to Bob White?


        10
            8
            9
                      A. milion? 9
                     $2.5 Yes. 10
                     bonus checks, one for a milion dollars and one for 8            A. Yes.
                                                                                    Q. Page 30, is that a million dollar bonus
                                                                                payment to Jim Wehmhoff?
        11                Q. And then the following page, excuse me, 11             A. Yes.
        12           the page that has on the bottom right 14 on it, is 12          Q. And the following page is another
        13
        14
        15
                     Jeffres? 15
                      A. Yes. 14
                     that the million dollar bonus that was paid to Mary 13     $525,000 to Bob White?
                                                                                    A. Yes.
                                                                                         (Whereupon, Ritchie/Acorn
        16                Q. Who was she employed by at that time? 16                    Deposition Exhibit No. 27 was
        17                A. Her payroll I believe was done through 17                 marked for identification.)
        18           Petters Group Worldwide. I think she was working for 18    BY MR. FLEMING:
       19
       20            though. 20
                     Polaroid at that time. I'm not 100 percent sure 19             Q. Exhibit 27, at the top of
                                                                                                                   the page, is
                                                                                that an e-mail from Tom Petters to you dated November


                          A. Yes. 23
       21                Q. Two pages further down, is that the 21              3rd,20077
       22            million dollar bonus check to Dave Baer? 22                    A. Yes.
       23                                                                             Q. If   you go to the third page, the very
       24                 Q. Who was he employed by? 24                         first e-mail in this chain, do you see this is an
       25                 A. There again, it was Petters Group 25               e-mail from David Baer to Tom Petters dated November

                                                                                                        15 (Pages 54 to 57)
                                                              Depo International, Inc.
                                          (763) 591-0535 or (800) 591-9722 admin@depointernationaL.com
..                                     ..                                                       ..                                      ..                                    ..
            Case 09-04032                               Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                  Desc
                                                               Exhibit(s) 5-7 Page 13 of 38

                                                                       Deanna L. Coleman, Vol. I - 7128/2010
                                                                              In re: Polaroid Corporation, et al.
                                                                                                        ,
                                                                                              Page 58                                                                Page 60 ~
                                                                                                                                                                               ~

        1           DEANNA L. COLEMAN, VOLUME I - 7/28/10                                                     1 DEANNA L. COLEMAN, VOLUME I - 7/28/10
       2        2nd,2007?                                                                                     2 Q. Why was that?
        3                A. Yes.                                                                              3 A. Because they needed gas to fly or they
       4                 Q. And Dave Baer is inquiring of   Tom                                               4 were going to be grounded. They didn't have the
       5        Petters as to whether he is, "Set for the $5 million                                          5 money.
       6        due to Polaroid on Monday," and then the e-mails that                                         6 Q. In that instance at least Tom Petters
       7        follow reference this $5 million due to Polaroid.                                             7 was ignoring any corporate formalities, they needed
       8                  Do you know what he is referencing?                                                 8 cash from one entity he owned, so he directed that
       9                  MR. CAULEY: Objection. Calls for                                                    9 funds be sent to another entity he owned that needed
     10         speculation.                                                                                10 money?
     11                   THE WITNESS: I know that Polaroid                                                 11 MR. CAULEY: Objection. Calls for
     12         needed $5 million. I don't remember what the $5                                             12 speculation. Calls for a legal conclusion.
     13         million was for, what Polaroid had to have it for, if                                       13 THE WITNESS: Yes.
     14         it was to payoff their line of credit with JP Morgan                                        14 BY MR. FLEMING:
     15         or what it was for.                                                                         15 Q. Were you aware of an instance in June
     16         BY MR. FLEMING:                                                                             16 of 2008 when Tom Petters was requesting that everbody
     17                  Q. Why is Tom Petters saying in the very                                           17 that he work with see if they could come up with some
     18         first e-mail on the first page that it's imperative                                         18 funds to pay down a $3.5 milion Sabes loan?
     19         that the funds come from him or Petters Capital, not                                        19 A. Yes.
     20         from PCI?                                                                                   20 Q. Tell me about those circumstances.
     21                     MR. CAULEY: Objection. Calls for                                                21 A. He was desperate for money. Sabeses
     22         speculation.                                                                                22 was going after him and threatening him that he was
     23                     MR. ROSOW: Join in the objection.                                               23 going to have an audit if he couldn't come up with the
     24                     THE WITNESS: He would say that quite a                                          24 money. Tom had made an arrangement with Sabeses to
     25         bi t.f'or s()~erea~()i:~~(Íi(Íi:'t",~n trr()i:~:f~oinii:g fro m                             25 pay off      three notes per week and he wasn't able to

                                                                                              Page 59                                                               Page 61

       1 DEANNA L. COLEMAN, VOLUME I - 7128110 1                                                                        DEANNA L. COLEMAN, VOLUME I - 7/28/10
       2 PCr. To me it didn't matter one way or the other, but 2                                                   fulfll that agreement, so he was asking everyone to
       3 he always wanted it coming from him because I think he 3                                                  come up with money and he was trying to get money fron
       4 was telling -- I guess my undérstanding was he was 4                                                      every company to payoff a note.
       5 telling the employees that he had the money, not PCI, 5                                                         Q. Was he able to find the money to pay
       6 so he didn't want it coming from PCr. He wanted it 6                                                      down the loan?

       8BY MR. FLEMING:8
       9 was his. 9
       7 coming from himself so it made it look like the money 7                                                         A. I don't remember right offhand ifhe
                                                                                                                   was or not.
                                                                                                                             (Whereupon, Ritchie! Acorn
     10 Q. Well, on the third page, Baer is 10                                                                               Deposition Exhibit No. 28 was
     11 referencing $5 million that is due to Polaroid. Were 11                                                              marked for identifcation.)
     12 you aware of any payment that Polaroid had made or any 12                                                  BY MR. FLEMING:

     14 time? 14
     13 reason why moneys were due to Polaroid around that 13


     15 MR. CAULEY: Objection. Calls for 15
                                                                                                                         Q. Allan, do you want to look? We can
                                                                                                                   make a copy at the break. Does this refresh your
                                                                                                                   recollection at all, do you recall Polaroid coming up
            speculation. 16
     16 WITNESS: No. Petters Company did 17
     17 THE
                                                                                                                   with $3.5 million to assist Tom Petters in paying down
                                                                                                                   the Sabes loan?

     19 MR. FLEMING:
     20 BYanyway. when20              19
     18 not have any money due to Polaroid that I was aware of 18                                                            MR. CAULEY: Objection to form.
                                                                                                                             THE WITNESS: Yes. I know Polaroid did
                                                                                                                   come up with some money when we needed it.
     21 Q. Were you aware of any time  21                                                                          BY MR. FLEMING:
     22 Polaroid funds were used to pay for obligations that 22                                                          Q. This was a loan that PCI had provided
     23 were not Polaroid's obligations? 23                                                                        to Sabes?
     24 A. Yes. In 2008 Polaroid I believe gave 24                                                                      A. Yes.
     25 Sun Country some funds. 25
      t!."""%..~,:¡.'!.:'".~.mø.'4'%~Jm:¡~~.,ø,~*,,,""'t~~~~~;::%'~M'",W,,~."'.t.tr,r ~"
                                                                                                                         Q. Do you recall the amount that Polaroid

                                                                                                                                        16 (Pages 58 to 61)
                                                                                           Depo International, Inc.
                                          (763) 591-0535 or (800) 591-9722 adni@depointernational.com
..                                 ..                                        ..                                          ..                                         ..
                    Case 09-04032          Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                     Desc
                                                  Exhibit(s) 5-7 Page 14 of 38
                                                       Deanna L. Coleman, VoL. I - 7/28/2010
                                                         In re: Polaroid Corporation, et al.
                                                                    Page 62                                                                               Page 64
             1 DEANNA L. COLEMAN, VOLUME 1 - 7/8/10                                1         DEANNA L. COLEMAN, VOLUME I - 7/28/10
            2 gave to Sun Countr in 2008 when it needed money for                  2    A.M.
            3 gas?                                                                 3    BY MR. FLEMING:
            4 A. Not - I know it was more than once. I                             4             Q. Ms. Coleman, when did you first hear
            5 just remember this once where Tom borrowed a milion                  5    the name Ritchie or Thane Ritchie?
            6 dollars from Crown Bank or he got Crown Bank anyway                  6             A. In 2008. I don't know ifit was right
            7 give Sun Country a milion dollars cashier's check,                   7    before, probably during their investment or right
            8 and of course Tom told Kevin that he would have it                   8    before their investment.
            9 taken care of that day or the next day and he never                  9        Q. Are you referencing the loans of $150
        10 did have a wire coming in.                                             10    million provided by Ritchie in February of2008?
        11 Q. You are talking about Kevin Howk, the                               11             MR. CAULEY: Object to the form.
       12 president of       Crown Bank?                                          12    Misstates the record.
       13 A. Yes. I just remember Kevin caIlng me                                 13              THE WITNESS: Yes.
       14 and asking me about the milion dollars overdraft                        14    BY MR. FLEMING:
       15 because I wasn't involved in it. I kind of         knew that            15        Q. Were you involved with respect to the
       16 Tom took the milion dollars cashier's check and                         16    negotiations concerning those loans?
       17 asking when the wire was coming in, and I believe Tom                   17        A. No.
       18 got that milion dollars from Polaroid to cover it.                      18        Q. When did you first learn of the fact
       1 9 Q. When was that?                                                      19   that the loans had been provided?
      20 A. In 2008.                                                              20          A. Tom told me, and then a lot of the
      21 Q. Was there an instance besides that one                                21   money from Ritchie Capital went -- I believe some of
      22 where Polaroid gave money to Sun Country for basically                   22   it went directly to PCI.
      23 to pay for gas?                                                          23        Q. Were you aware that the promissory
      24 A. I believe so. I mean I couldn't tell                                  24   notes were signed by Petters Group Worldwide as
      25 you exactly when but I just remember Polaroid wiring
     ....................
                                                                                  25               , to Petters ~ Inc.?       .........

                                                                   Page 63                                                                               Page 65
          1 DEANNA L. COLEMA, VOLUME I - 7/28/10 1                                          DEANNA L. COLEMAN, VOLUME I - 7/28/10
         2 money a couple of times. 2                                                       A. Yes. I was aware of       that. I don't

         4 to Sun Country? 4
         3 Q. What was the amount that they provided 3

         5 A. I don't remember the amount. 5
                                                                                       know if it was before or after they gave us the money,
                                                                                       but I was aware of that, yes.
                                                                                            Q. What did you do after learning about
         6 Q. Do you remember any other circumstances 6                                the fact that the loans had been provided, what was
         7 when Polaroid funds were used to pay for obligations 7                      your role at that point?
         8 that were not Polaroid's obligations? 8                                               MR. CAULEY: Objection. Form.
         9 MR. CAULEY: Objection. Form. 9                                                          THE WITNESS: To pay off                     the investors.

     10 THE WITNESS: Ijust remember Polaroid 10                                        Tom and i got together and we kind of decided who to
     11 wiring funds to Petters Group Worldwide which is where 11                      pay off to some extent. Tom told me he needed some of
     12 they usually would wire              it and they would wire it out             the money för his line of credit, and other companies
     13 to Sun Country or to Petters Company or wherever, 13                           like Petters Group Worldwide needed some of it for
     14 probably three or four times. Sun Country, if it was 14                        payrolL i think some of it might have gone to Sun
     15 Sabeses here, it could have been to PCI again for 15                           Countr and then the rest of it went to use to payoff
     16 something else. It could have been for Petters Group 16
     17 payrolL. 17
     18 MR. FLEMING: We have been going about 18
                                                                                       other investors.

                                                                                       BY MR. FLEMING:
                                                                                            Q. Were you aware of     the interest rates on
     19 an hour and a half. Why don't we take about a 19                               these Ritchie loans in February of2008?
     20 ten-minute break if that is all right. 20                                            A. Not unti after they gave Petters
     21 THE VIDEOGRAPHER: Going offthe video 21                                        Company the money.
     22 record. The time is now approximately 10:29 A.M. 22                                  Q. When you say after, did you learn
     23 (Recess taken.) 23                                                             around February, March, 2008 of                    the fact that the
     24 THE VIDEOGRAPHER: We are back on the 24                                        interest rate was 80 percent?
     25 video record. The time is now approximately 10:41 25                                A. Probably March, somewhere around there.

                                                                                                                17 (Pages 62 to 65)
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..                                      ..                                 ..                                        ..                          ..
               Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                               Desc
                                                    Exhibit(s) 5-7 Page 15 of 38

                                                         Deanna L. Coleman, VoL. I - 7/2812010
                                                            In re: Polaroid Corporation, et al.
                                                                                .
                                                                    Page 66                                                            Page 68
          1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                      DEANNA L. COLEMAN, VOLUME I - 7/28/10
          2 Q. Did you participate in any discussions 2                                                                    the February



         5 A. No. 5
                                                                                          Q. Who was the negotiator of
          3 about that interest rate, the fact that these loans 3                   2008 loans and then the March, 2008 PlayStation deal?
          4 were at an 80 percent annual rate? 4                                             MR. CAULEY: Objection. Form.
                                                                                             THE WITNESS: Tom Petters, and I know
          6 Q. Now, did you understand that there was 6                             David Baer was involved. I don't know to what extent.

                                    box account? 8
         7 an agreement between Petters and Ritchie about the use 7
         8 of a lock

         9 MR. CAULEY: Objection. Form. Assumes 9
                                                                                    BY MR. FLEMING:
                                                                                         Q. Could you tell me about your
                                                                                    involvement in the PlayStation deaL.
      10 facts not in evidence. 10                                                       A. Tom called me up and said that Ritchie
      11 THE WITNESS: I understood that they 11                                     Capital had 30 milion or 31 milion, gave me the
      12
         BY MR. FLEMING: 12
      13 wanted a lockbox account. 13
      14 Q. What did you understand, tell me about 14
                                                                                    details on the PlayStation, asked me to find the sku
                                                                                    numbers, and that is when I went on line to best buy
                                                                                    and pulled up the sku for Sony PlayStations, and I
      15 your understanding. 15                                                     believe he told -- I might be getting this wrong with
      16 A. David Baer told me that we needed to 16                                 a different investor, but I think he told him that it
      17 set up a lockbox at M & I Bank for Ritchie Capital. 17                     was going to go, be sold international, to
      18 And we had just finished getting, I don't know if you 18                   international vendors. So there was no purchase order
      19 want to even call it a lockbox because it wasn't a 19                      that we had to make up from the vendor. I think it
      20 real lockbox. I think they called it something else, 20                    was just a PCI purchase order to Larry Reynolds. Then
      21 kind of an agreement with M & I Bank. So I forwarded 21                    he had told me I believe the dollar amount that we had
      22 that agreement to David Baer and then I believe he 22                      paid for it, how much Petters Company paid for it. So
      23 forwarded it onto someone at Ritchie CapitaL. And 23                       I had to get those documents together.
      24 then I did help get that set up at M & I Bank. 24                               Q. SO in very general terms, was the deal
      25 Q. What was it that was set up? 25                                         supposed to be a transaction which Ritchie would
                                                                   Page 67                                                             Page 69
        1 DEANNA L. COLEMAN, VOLUME i - 7/28/10 1                                        DEANNA L. COLEMAN, VOLUME I - 7/28/10
        2 A. It was agreement with Ritchie Capital 2                                provide $31 million, and that $31 million would be II!
        3 and Petters Company, the same kind of agreement that 3                    used to purchase PlayStations, and then those
        4 was set up for Palm Beach. 4                                              PlayStations would be resold to uBid?
        5 Q. Can you tell me the particulars of                  that 5                  A. Yes. Yes, I forgot uBid. That was
        6 agreement, just in general what were the terms or what 6                  uBid, yeah. I take that back. They wouldn't all be
       7 was supposed to happen with respect to that account? 7                     sold to uBid. Tom told Ritchie, I believe he told
       8 A. My understanding, and I can't remember 8                                Ritchie anyway, he told me that we were going to get a
       9 the exact terms of it, but my understanding was once 9                     purchase order from uBid but they were not all going
     10 we received -- well, I'm not even sure what my 10                           to be sold to uBid. There is no way uBid could
     11 understanding on it was, because my understanding of 11                     handle, what was it, 35,000 PlayStations. That they
     12 Ritchie Capital's funds were that we couldus- it to 12                      were eventually going to sell them to Costco
     13 pay other investors, it was used for like working 13                        international or to other vendors. This was just kind
     14 capitaL. So I guess when we were going to pay back 14                       of -- I guess to have a purchase order. My
     15 Ritchie Capital, we would wire the funds into that, 15                      understanding was Ritchie knew uBid was not going to
     16 what was called a lockbox agreement. And then they 16                       take all of the Sony PlayStations.
     17 had control over that account. 17                                                Q. The understanding was Costco was going
     18 Q. Where was that account, what bank? 18                                    to purchase them or some of them in addition to uBid?
     19 A. M & i. 19                                                                     A. Right. And other international

     21 A. Right. 21
     20 Q. It was at M & i also? 20
     22 Q. Did you participate in the negotiations 22
                                                                                    companies.
                                                                                        Q. You have just related what the
                                                                                    understanding of the deal was, but in fact there

     24 deal? 24
     25 A. No. 25
     23 in March, 2008 concerning the $31 million Play




      ¡".W2""-".;s-,'¡,,':,'t.,,,
                                                                   Station 23       wasn't any purchase of any PlayStations at all?
                                                                                         A. Correct.
                                                                                         Q. And all of the purchase orders that

                                                                                                            18 (Pages 66 to 69)
                                                                Depo International, Inc.
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..                                  ..                                     ..                                            ..                              ..
          Case 09-04032              Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                             Desc
                                            Exhibit(s) 5-7 Page 16 of 38

                                                Deanna L.Toleman, VoL. I - 7/28/2010
                                                  In re: Polaroid Corporation, et al.
                                                             Page 70                                                                        Page 72

      1         DEANA L. COLEMA, VOLUM I - 7/28110                                    1          DEANNA L. COLEMAN, VOLUME I - 7/281I0
      2     were created relating to this deal were fake?                             2          A. Marlon Quan.
      3          A. Yes.                                                              3          Q. Was it your understanding he was saying
                                                                                      4   he can't talk with you on the phone right now because
      4            (Whereupon, Ritchie/Acorn
      5            Deposition Exhibit No. 29 was                                      5   he was with Marlon Quan?
      6            marked for identification.)                                        6          A. Yes.
                                                                                      7
      7     BY MR. FLEMING:                                                                      Q. SO did the money come from Thane
      8                                                                               8   Ritchie fairly soon after this e-mail?
                 Q. Showing you what has been marked as
      9     Exhibit 29, why don't we put that one aside for now.                      9          A. I believe it was within 24, 48 hours,
     10     That one is a little further in time, April 1st                     10        yes.
     11     Let's go back to March 20th.                                        11                   (Whereupon, Ritchiel Acorn
     12                                                                         12                   Deposition Exhibit No. 31 was
                   (Whereupon, Ritchie/Acorn
     13            Deposition Exhibit No. 30 was                                13                   marked for identifcation.)
     14            marked for identification.)                                  14        BY MR. FLEMING:
     15     BY MR. FLEMING:                                                     15            Q. Showing you Exhibit 31, is this an
     16                                           the page, is                  16        e-mail from you to Tom Petters dated March 20, 2008?
                 Q. Exhibit 30, at the top of
     17     that an e-mail from Tom Petters to you dated March 20, 17                         A. Yes.
     18     2008?                                                  18                         Q. What are you telling him?
     19          A. Yes.                                                        19               A. That I had talked to Tim Takesue at
     20                                                                         20        uBid and he was going to send us a purchase order made
                 Q. On page 2, is that an e-mail from Thane
     21     Ritchie to Tom Petters dated the day before, March 19,              21        out to Petters Company on the Sony PlayStation.
     22     2008?                                                               22               Q. SO Tim Takesue works at uBid?
     23          A. Yes.                                                        23               A. Yes. He is a part owner of uBid.
     24                                                                         24               Q. You had requested him to send a
                 Q. Do you see that he is requesting to
     25     know exactl)!'. he~~!,s,ddIfii~ildth~:371liiii?Il,J                 25        purchase order from uBid reflecting a purchase order    . ..
                                                                   ................

                                                             Page 71                                                                        Page 73

      1 DEANNA L. COLEMAN, VOLUM I - 7/28110 1                                                 DEANNA L. COLEMAN, VOLUME i - 7/28/10
      2 need to know exactly what the collateral is. I know 2                             for 79 million PlayStations?
      3 what the product is, but do they get a UCC or 3                                          A. I did. I called Tim up and told him

      4 something to show that they own the product They 4                                that we had a Sony PlayStation deaL. Told him the
      5 wouldn't remarket it, but I need to know what they 5                              information that was on the purchase order, I can't
      6 get Right now it's 50/50 but might actually pull 6                                remember how much it was for or anything and told him
      7 this off if we can get these answers." 7                                          I needed a purchase order from uBid for the full
      8 Then Petters' response is on the first 8                                          dollar amount. I told him I knew he wasn't going to

      9 page. Do you see where he says in an e-mail to Thane 9                            be buying all of it, but he could have first shot and
     10 Ritchie, also dated March 19, "I will get a UCC-1 10                              take whatever uBid wanted and then we were going to
     11 filed in their favor on the inventory and account 11                              sell the rest if the deal actually happened, but I
     12 receivable proceeds. I wiII explain in the AM totally 12                          needed apurchaseorderfrum him in order to get it
           secured." 13
     13 those are the e-mails that are 14
     14 So
                                                                                          funded.
                                                                                                 Q. You have referenced a few times the
     15 earlier in the e-mail chain, and at the top of the 15                             inability of uBid to actually purchase that amount of
     16 page, Tom Petters is saying to you in his e-mail to 16                            PlayStations. What do you mean by that?
     17 you dated the next day, March 20th, "FYI this is what 17                                 A. There were quite a few PlayStations
     18 I will be talking to you about to get money today. 18                             there. If I remember exactly, it was like 32,000
     19 You wil have to fit the pieces together for now. 19                               units or somewhere around there. One retailer, this
     20 Can't talk. Marlon around." 20                                                    is a lot of PlayStations to sell for one retailer.;;

     2 1 Was this around the first time that you 2 1                                             Q. uBid was a Petters-owned company or


     23 A. It is, yes. 23
     22 learned about the PlayStation deal with Ritchie? 22

     24 Q. Who is the Marlon that he is 24
                                                                                          partially owned by Petters?
                                                                                                 A. Yes.
                                                                                                     (Whereupon, Ritchiel Acorn
     25 referencing? 25                                                                              Deposition Exhibit No. 32 was

                                                                                                                 19 (Pages 70 to 73)
                                                         Depo International, Inc.
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..                                                                    ..                          ..                                       ..
         Case 09-04032                                      Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                   Desc
                                                                   Exhibit(s) 5-7 Page 17 of 38

                                                                           Deanna L. Coleman, Vol. I - 7/2812010
                                                                             In re: Polaroid Corporation, et al.
                                                                                     Page 74                                                              Page 76

       1 DEANNA L. COLEMA, VOLUME I - 7/28/10 1                                                             DEANNA L. COLEMAN, VOLUME I - 7/28/I0
       2 marked for identification.) 2                                                                 follows Tom Petters' e-mail to you about the recap.
       3 BY MR. FLEMING: 3
       4 Q. Showing you Exhibit 32, on the top of 4
                                                                                                       Can you explain what you were doing here at the bottom
                                                                                                       of the page in that e-mail?
       5 the page, is that an e-mail from Tom Petters to you 5                                               Á. I had pulled this up I believe on Best
       6 dated March 20, 2008? 6                                                                       Buy's website to find out a little bit about the
       7 A. Yes. I guess I was wrong. It's 7                                                           PlayStations and how much they were and the model
       8 232,000 units. 8
                   this e-mail 9
                                                                                                       number, and then from Tom's e-mail, those are the
                                                                                                       numbers I put together, that we were buying 232,350
       9 Q. Now, at the very bottom of

     10 chain, an e-mail beginning on the bottom of page 2 and 10                                      units at 223.80 and then sellng them at $340.
     11 going onto 3, it's an e-mail from Tom Petters to Thane 11                                            Q. You got the model number that you used
     12 Ritchie dated the day before. Was it your 12                                                   in that e-mail from going to the Best Buy website?
     13 understanding in that e-mail that is what Petters was 13                                             Á. Yes.
     14 telling Thane Ritchie about the PlayStation deal? 14                                                 Q. How did you determine the number of
     15 MR. CAULEY: Objection. Form. 15                                                                                     the units?
                                                                                                       units and the pnces of

     16 THE WITNESS: Yes. 16                                                                                 Á. Because I took the dollar amount that
     17 BY MR. FLEMING: 17
     18 Q. Above that e-mail there is an e-mail 18
                                                                                                       Tom told them, Thane Ritchie, and kind of just went
                                                                                                       backwards from there, and then whatever Best Buy was
     19 from Tom Petters to you dated March 20th. What is it 19                                        sellng the units for, I guess. I don't know exactly
     20 that he's telling you, what does he tell you in that 20                                        what they were buying it for, but it would have been,
     21 e-mail on page 2 at the top of the page? 21                                                    or what they were sellng it for, I mean, but it would
     22 A. Basically to put it together, to do the 22                                                  have been more than $340, so I just kind of  went
     23 paperwork for the Sony PlayStations for Ritchie 23                                             backwards.

     25 milion. 25
     24 Capital and that he needs 6.5 milion of the 37 24                                                   Q. Then at the top of   the page is Tom
                                                                                                       Petters' an e-mail from him to you dated

                                                                                                                                                          Page 77

       1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                                           DEANNA L. COLEMAN, VOLUME I - 7/28110
      2 Q. He says, "This is a recap if," 2                                                            March 20th. What does he say in response to your
       3 presumedly of, "where I started on the deaL. I will 3                                         e-mail?
       4 call you. Love you. Net, net, we would get 37 4                                                     Á. "I love you. You are the only one who
      5 million. I have to have 6.5 million of                                 that to renew 5         gets it."
       6 a credit line and take out JP Morgan." 6                                                                  (Whereupon, Ritchiel Acorn
       7 Was the $37 million the amount that 7                                                                     Deposition Exhibit No. 33 was
       8 Thane Ritchie would be investing? 8                                                                       marked for identification.)
       9 MR. CAULEY: Objection. Calls for 9                                                            BY MR. FLEMING:
            speculation. 10
     10 WITNESS: Yes, but I believe it was 11                                                               Q. Showing you Exhibit 33, is this an

     12 only 31. 12
     11 THE

     13 BY MR. FLEMING: 13
                                                                                                       e-mail from you to Tom Petters, Thane Ritchie and Dave
                                                                                                       Baer, dated March 20th, 2008?
                                                                                                            A. Yes.
                                  where 14
     14 Q. When he talks about the recap of                                                                  Q. In that e-mail did you attach the three
     15 he started on the deal, he is referencing the e-mail 15                                        documents that follow?

     17 A. Yes. 17
     16 below to Thane Ritchie? 16
     18 Q. When he says that I have to have 6.5 18
                                                                                                             A. Yes.
                                                                                                             Q. Each of the three documents that follow
                                                                                                       are fake documents that you prepared?
     19 million of that to renew a credit line and take out JP 19                                            A. Except for the very last one is one
     20 Morgan, was he referencing a personal line of credit? 20                                       that uBid faxed over to me.
     21 MR. CAULEY: Objection to form. 21                                                                    Q. Let's go backwards. The very last
     22 THE WITNESS: Yes. 22                                                                           document, uBid, that is a purchase order from uBid?
     23 BY MR. FLEMING:an 24
     24 Q. At the bottom of the first page is
                                              23                                                             A. Yes.
                                                                                                             Q. That's the one that was sent by Tim
     25 e-mail from you to Tom Petters dated March 20th that 25                                        Takesue?
          ~'!::~;W ~ m"", "~~i'¡~. '" n .,.~. "¥.;W.$m'X.,,.1i~,,'. !h.

                                                                                                                                20 (Pages 74 to 77)
                                                                  Depo International, Inc.
                                              (763) 591-0535 or (800) 591-9722 admi@depointernationaL.com
       ..                                                ..          . .                          ..                                     ..
            Case 09-04032                       Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                       Desc
                                                       Exhibit(s) 5-7 Page 18 of 38

                                                         Deanna L. Coleman, Vol. I - 7/28/2010
                                                              In re: Polaroid Corporation, et al.
                                                                           Page 781                                                             Page so i
                                                                                                                                                         l
       1                 DEANNA L. COLEMA, VOLUME I - 7/28/10                              1           DEANNA L. COLEMAN, VOLUME I - 7/28110
       2                  A.   Yes.                                                    2               Q. Were you involved in the utilization of
       3                Q.     How did he -- did you provide him with                  3        the proceeds?
       4       the    description which is in the middle of the page,                  4             A. Yes.
       5       the tye of PlayStation, the quantity and the cost?                      5             Q. What is it that you did?
       6                  A.      I did. I believe I e-mailed it to him.               6               A.    Wired the funds out once we received
       7       Otherwise I called, I know I called him and talked to                   7        them.
       8       him, but I don 't know if I gave it to him over the                     S               Q.    SO did Ritchie wire the funds to PCl?
       9       phone or if I sent the information bye-mail.                            9               A.    Yes.
 10                Q.     Then the second document, excuse me,                        10            Q. What did you do after receiving that
 11            page 3, let me -- okay. First, you have the purchase                   11        $31 million?
 12            order from uBid. Let's go to the second page of              the       12            A. Paid off other investors, and I guess I
 13            four page document?                                                    13       would need an accounting sheet or look at the bank
 14                       Yeah.
                         A.                                                           14       statement to see exactly what, but I am assuming I
 15                 Q.    Then you have the purchase order from                       15       gave Tom his 5 milion or 5.5 milion that he wanted.
 16            Petters to Nationwide. Did you prepare this purchase                   16            Q. To pay off the JP Morgan loan?
 17            order?                                                                 17            A. Right.
 18                 A.           I did, yes.                                          18            Q. None of the proceeds were used to buy
 19                   This is a fake document?
                         Q.                                                           19       PlayStations?
20                    Yes.
                         A.                                                           20            A. No.
21               Q.   What this would reflect is that Petters                         21              (Whereupon, Ritchie/Acorn
22            Company, Inc. is buying 232,350 PlayStations from                       22              Deposition Exhibit No. 35 was
23            Larr Reynolds or Nationwide?                                            23              marked for identification.)
24                       A.      Yes.                                                 24       BY MR. FLEMING:
25                       Q.      And then the third page, is that the                 25           Q. Showing you Exhibit 35, is that an
                                                                        Page 79                                                                Page SI
   1               DEANNA L. COLEMAN, VOLUME I - 7/28/10                               1            DEANNA L. COLEMAN, VOLUME I - 7/28/10
   2          invoice from Nationwide relating to the purchase, was                    2                       the page from Tom Petters to you
                                                                                               e-mail at the top of

   3          that prepared by you?                                                    3       dated June 6, 2008?
   4               A. Yes.                                                             4             A.     Yes.
   5                    Q.       SO if   these transactions had actually               5             Q.   If we go at the very beginning of this
  6          occurred, the profit would have been in the what, the                     6       e-mail chain, on the last page, that is an e-mail from
  7          $27 milion range, if my math is right?                                    7       John Wappler to you dated June 5th in which he is
  8              A. Yes.                                                               8       asking you for a quick discussion regarding the status
  9                  (Whereupon, Ritchie/Acorn                                         9       of the PlayStation 3 deal?

10                              Deposition Exhibit No. 34 was                     10                A. Yes.
11                    marked for identification.)                                 11                Q. Now, is this an older PlayStation model
12 .         BY MR. FLEMING:                                                      12           that was being sold?
13                Q. Showing you Exhibit 34, this is the                          13                     MR. CAULEY: Objection. Form.
14           note purchase agreement between Tom Petters, Petters                 14                     THE WITNESS: At that time when I
15           Company, Inc. and Ritchie. Did you review this                       15           pulled it up on Best Buy, iff remember correctly it
16           document or did you receive a copy of this document at               16           was like, there was only two PlayStations and this was
17           around the time of the PlayStation transaction?                      17           the more expensive one.
18                    MR. CAULEY: Objection. Compound.                            18           BY MR. FLEMING:
19                              THE WITNSS: No. I received it after,              19                Q.      Okay.
20          like months afterwards.                                               20                A.         't know anything about Sony
                                                                                                            I don

21          BY MR. FLEMING:                                                       21           PlayStations so I couldn't tell you if it was an older
22               Q. But you did learn that Ritchie had                            22           model or not. I guess I thought it was a newer model
23          agreed to provide a $31 rrllion loan to buy the                       23           or more of an updated model since it was more
24          PlayStations?                                                         24           expensive, but maybe not.
25              A. Yes.                                                           25               Q. Did you lear subsequently that there
 ~i¿")'~~';::,-~"'~Jt-m.?i';'


                                                                                                                      21 (Pages 78 to 81)
                                                                  Depo International, Inc.
                                     (763) 591-0535 or (800) 591-9722 admin@depointernational.com
       ..                                     ..                                ..                                        ..
     Case 09-04032                   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                  Desc
                                            Exhibit(s) 5-7 Page 19 of 38
                                             Deanna L. Coleman, Vol. I - 7128/2010
                                                   In re: Polaroid Corporation, et al.



     2 A. Yes. 2
                                  Page 90.                                                                                          Page 92
     1 DEANA L. COLEMA, VOLUM I - 7/28/10 1                                    DEANNA L. COLEMAN, VOLUME i - 7/28/10
                                                                          confirmation as to whether Petters is going to make
     3 Q. In his e-mail, he is reminding you that 3                       that payment?
     4 the first Ritchie note was due a week from that day on 4                    MR. CAULEY: Objection. Form.
     5 May first for $31 million, and he asks at the end, 5                        THE WITNESS: I don't believe I was
     6 "Are we prepared to handle these repayments? Are you 6             dealing with John Wappler at that time. With Ritchie,

     8 assist?" 8
     7 working on these matters? How would you like me to 7               no, i was not dealing with Ritchie.
                                                                          BY MR. FLEMING:


   11 A. No. 11
  10 to pay the loan? 10
     9 I mean at that time did PCI have funds 9                                 Q. What communications did you have with
                                                                          Wappler?
                                                                                A. It was after they invested the money.
  12 Q. Where would those funds have had to 12
  13 havecome from? 13
  14 MR. CAULEY: Objection. Calls for 14
                                                                         Eventually wanted a spreadsheet showing what investors
                                                                         I paid off and when those investors would be coming
                                                                         due.
  15 speculation. 15
  16 THE WITNSS: Other investors. 16
                                                                                Q. Was this a person to person meeting
  17 BY MR. FLEMING: 17
  18 Q. Did you participate in any of the 18
                                                                         with Wappler or were these phone calls?
                                                                                 MR. CAULEY: Objection to form.
                                                                                     THE WITNESS: I don't remember if          it

                payment? 20
  19 discussions about how to address this issue of the 19
  20 first

 2 1 A. Not that I remember. 21
                                                                         was a phone call or not beforehand but I know we met
                                                                         in person and him asking me for that spreadsheet
                                                                         BY MR. FLEMING:
 22 (Whereupon, Ritchie/Acorn 22
 23 Deposition Exhibit No. 40 was 23                                            Q. Did you talk with Wappler about the
                                                                         fact that the loan proceeds had been used to payoff
 24
    BY MR. identifcation.) 24
 25 marked for FLEMING: 25                                               earlier investors?
                                                                                A. Yes.
                                                          Page 91                                                               Page 93
   1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                 DEANNA L. COLEMAN, VOLUME I - 7/28/10


   4 A. Yes. 4
   2 Q. Showing you Exhibit 40, is that an 2
   3 e-mail from you to Tom Petters dated May 9, 2008? 3

   5 Q. What is it that you are telling him? 5
   6 A. "Let's talk. No clue where we're going 6
                                                                              Q. You actually provided him with a
                                                                         spreadsheet reflecting each ofthese investors that
                                                                         had been paid with the Ritchie loan proceeds?
                                                                             A. Yes.
                                                                             Q. What was all on the spreadsheet, just
   7 to come up with the funds. Hay and I are working on a 7            in very general, had presumedly the name of the

   9 another 60 days." 9
   8 $50 milion deal but don't think it wil close for 8

 1 0 Q. What was that deal you were 10
                                                                        investor and did it have the amount that was paid?
                                                                             A. Yes. It had the name of the investor,
                                                                        the amount that was paid. I believe it had like the
 1 1 referencing? 1 1                                                   purchase order, who it was from. I can't remember if
12 A. It was another hedge fund. It was a 12                            it had that or not. The merchandise. The PO dollar
13 new investor. They wanted to invest money in Petters 13              amount. And I think it might have had like a date
14 Company, $50 milion. It would be kind of like a $50 14               when it was due.
i 5 milion line of credit. i 5                                               Q.Was this a spreadsheet reflecting the
16 Q. Who was that? i 6
17 A. I don't remember. 17                                              identity of persons who had provided loans to PCI?
                                                                                  MR. CAULEY: Objection. Form.
18 Q. It wasn't Interlachen? 18                                                   THE WITNESS: Yes.
i 9 A. No. It was someone who never invested. 19                        BY MR. FLEMING:
20 It was a connection of            Tom Hay's. I sat in on one 20           Q. At any time did Wappler or anybody else
2 i meeting and one conference call. 2 i
22 Q. Were you dealing with any of                 the -- 22
23 were you dealing either with Thane Ritchie or anybody 23
                                                                        express surprise at the fact that the loan proceeds
                                                                        had been used to pay other investors?
                                                                                 MR. CAULEY: Objection to form.
24 from Ritchie during this time period when the first 24                        THE WITNESS: No. It was my
25 payment is coming due and they are looking for 25                    understanding that is what they knew the money was

                                                                                                24 (Pages 90 to 93)
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          ..                                      ..                                   ..                                   ..
       Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                              Desc
                                            Exhibit(s) 5-7 Page 20 of 38

                                             Deanna L. Coleman, Vol. I - 7/2812010
                                                In re: Polaroid Corporation, et al.
                                                             Page 94                                                         Page 96

   1          DEANNA L COLEMAN, VOLUME I - 7/28/10                      1       DEANNA L COLEMAN, VOLUME I - 7/28/10
   2      going to be used for.                                         2   PS3 account control agreement, was there some wrtten
   3      BY MR. FLEMING:                                               3   document that reflected the agreement with M & I Bank?
                                                                        4         A. There was an agreement with M & I Bank.
   4          Q. Why do you say that?
   5          A. Tom told me that is why they were                      5   To me it was just an account that Ritchie Capital had
   6      investing it, and I guess that is why I assume John           6   opened up at M & I Bank and once we received funds in,
   7      was asking me for the spreadsheet. Why else would he          7   PCI was to transfer those funds over to Ritchie
   8      ask me for it.                                                8   Capital's account at M & I Bank.
                                                                        9       Q. SO it was your understanding that the
   9                (Whereupon, Ritchie/Acorn
 10                 Deposition Exhibit No. 41 was                      10   agreement simply provided that when PCI received any
 11                 marked for identifcation.)                         11   funds from the sale of the PlayStations by Costco or
 12       BY MR. FLEMING:                                              12   uBid, that PCI was to transfer the proceeds to that
 13            Q. Showing you Exhibit 41, at the top of                13   account that was under the control of Ritchie at Crown
 14       the page is that an e-mail from Dave Baer to Ken             14   Bank?
 15       Rosenblum, Jim Wappler, that you are copied on, dated        15         A. At M & I Bank.
 16       May 14, 2008?                                                16         Q. At M & I Bank?
 17            A. Yes.                                                 17         A. Yes.
 18                                            this e-mail             18        Q. Okay. And then in the middle of
                                                                                                                        the
               Q. At the very beginning of
 19       chain which is on page 3, there is an e-mail from Dave       19   page there is an e-mail from Baer to Wappler dated May
 20       Baer to Wappler dated May 13,2008, and Baer is               20   14,2008, that you are copied on. Baer is agreeing to
 21       talking about rolling over the remaining notes as you        21   send that account agreement. So was that account
 22       did with the first. So was it your understanding or          22   agreement sent?
 23       these e-mails that we just reviewed in which there was       23         A. I know eventually they had an account
 24       a discussion about the fact that the first payments or       24   at M & I Bank. So it was done eventually, yes.
 25       that the Ritchie notes were due and that the                 25       Q. Were funds ever wired there?
I......
                                                             Page 95                                                         Page 97

   1 DEANNA L. COLEMAN, VOLUM I - 7/28/10 1                                       DEANNA L. COLEMAN, VOLUME I - 7/28/10
   2 first payments were due, and is this e-mail on the 2                         A. No.
   3 last page consistent with your understanding that 3                           Q. At least not from PCI, right?
   4 basically Ritchie extended the notes so that the first 4                      A. No. When PCI paid off        what they did
   5 payments were not due at the first maturity date? 5                    payoff to Ritchie Capital, it always came directly

      leading. 8
   7 THE WITNSS: Yes. 7
   6 MR. CAULEY: Objectto the form and 6

   8
                                                                            from PCl's M & I account to one of       Ritchie Capital's
                                                                            accounts, but I don't believe it was ever M & I Bank.
                                                                                Q. Then above that e-mail, there is an
  9 BY MR. FLEMING: 9
 10 Q. At the bottom of the first page, there 10
                                                                            e-mail from Ken Rosenblum to Baer that you are copied
                                                                            on dated May 14,2008, in which Rosenblum, counsel for
 11 is an e-mail fromWapplertoDaveBaerdatedMay13.11                         Ritchie, is as~ing for an update on the sale of the
 12 2008, and he is asking for the PS3 account control 12                   PlayStation 3's. Do you see that?

 14 A. Yes. 13
 13 agreement?14                                                                   A. Yes.
                                                                                   Q. Baer responds bye-mail the same date
 15 Q. What is he referencing? 15                                           suggesting that you would give Wappler a call


 18 MR.yet. 18
 19 BY it FLEMING: 19
 16 MR. CAULEY: Objection to form. 16                                       directly?
 17 THE WITNSS: That he has not received 17                                        A. Yes.
                                                                                      (Whereupon, Ritchie/Acorn
                                                                                   Deposition Exhibit No. 42 was
 20 Q. Let me put it differently. What is the 20                                   marked for identification.)
 21 PS3 account control agreement? 21                                       BY MR. FLEMING:
 22 A. That is agreement with the bank, with M 22                                  Q. Showing you Exhibit 42, at the bottom
23 & I Bank, I know it's not called the lockbox 23                          of   the page, is that an e-mail from you to Torn Petters
24 agreement, but that agreement with M & I Bank. 24                        dated June 25, 2008?
2 5 Q. What was, I mean was there an actual 25                                     A. Yes.
                                ":ml$ .~.,

                                                                                                      25 (Pages 94 to 97)
                                                       Depo International, Inc.
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                                 ..                                                                                                ..                                              ..                                      ..
         Case 09-04032                                                      Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                                              Desc
                                                                                   Exhibit(s) 5-7 Page 21 of 38

                                                                                                         Deanna L. Coleman, Vol. I - 7/2812010
                                                                                                                     In re: Polaroid Corporation, et al.
                                                                                                                                                 Page 98                                                              Page 100
         1 DEANNA L. COLEMA, VOLUME I - 7/28/10 1                                                                                                                        DEANNA L. COLEMAN, VOLUME I - 7/28/10
         2 Q. Why were you sending this e-mail? 2                                                                                                                    what does that reference mean?
         3 A. Because I was meeting with Ritchie 3                                                                                                                        A. That he wanted - I guess I would need
         4 Capital and I didn't know what to tell them. 4                                                                                                            more documents, but I'm assuming this is after i gave
       5 Q. You say specifically, "I have no clue 5                                                                                                                  him that one spreadsheet showing all of the investors
       6 what to tell them as far as where their money went. 6                                                                                                       that were paid off, he wanted copies of their notes,        ~




             9
   9 A. Yes.11
       7 Did you tell them it was for a deal or what do they 7
       8 think it was for?" Is that right? 8

   11 deal?
   10 Q. Are you talking about the PlayStation 10
                                                                                                                                                                     hedge funds investors of all of their notes showing
                                                                                                                                                                     when the due date was and what they invested in.
                                                                                                                                                                          Q. When you had provided that spreadsheet,
                                                                                                                                                                     was the spreadsheet, did that provide accurate
                                                                                                                                                                     information?
   12 A. No. This is what the 150 milion or 12                                                                                                                            A. No.
   13 160 milion, whatever exact dollar amount it was. 13                                                                                                                 Q. What was not accurate about it?
   14 Q. To you how does Tom Petters respond to 14                                                                                                                        A. Ritchie Capital, some of the money that
  15 the e-mail that is at the beginning of the page on the 15                                                                                                       Ritchie Capital provided or invested in Petters Group
  16 same date, June 25, 2008? 16                                                                                                                                    or Petters Company, some of it was used for Tom's
  17 A. "Please call me on this. I don't want 17
  18 to do bye-mail." 18
  1 9 Q. What was your understanding as to why 19
                                                                                                                                                                    personal use, some of it was used for Sun Country,
                                                                                                                                                                    some of it was used for payroll for Petters Group, and
                                                                                                                                                                    that was not on that spreadsheet. So some of the
  20 he was requesting a call as opposed to bye-mail? 20                                                                                                            investors that I put on that spreadsheet that showed

 22 for speculation. 22
  21 MR. CAULEY: Objection to form. Calls 21

 23 THE WITNESS: Because if anything ever 23
                                                                                                                                                                    we paid off, we actually didn't payoff.
                                                                                                                                                                         Q. SO did you write down on that
                                                                                                                                                                    spreadsheet the names of some of the investors you had
 24 happened, they would have records of the e-maiL 24                                                                                                              actually paid off?
 25 (Whereupon, Ritchie/Acorn 25
...... ....................................._.................,.....................................................,..........................._,........"..,...
                                                                                                                                                                         A. Yes, some of them were reaL.

                                                                                                                                               Page 99                                                                Page 101
     1                         DEANNA L. COLEMAN, VOLUME I - 7/28110 1                                                                                                   DEANNA L. COLEMAN, VOLUME I - 7/28/10
     2                                       Deposition Exhibit No. 43 was 2                                                                                             Q. What are you talking about when you
     3
     4                 MR. FLEMING: 3
                   BY marked for identification.)4                                                                                                                  say, "And he has been callng about the 20 milion
                                                                                                                                                                    coming in from vendors."
     5                          Q. Showing you Exhibit 43, is this an 5                                                                                                  A. Tom would tell a lot of investors, a
     6
     7
     8                          A. Yes. 8
                   e-mail from you to Tom Petters, Jim Wehmhoff and Dave 6
                   Baer dated June 30, 2008? 7
                                                                                                                                                                    lot of hedge funds that he has 20 milion, 50 milion,
                                                                                                                                                                    30 milion coming in from Sam's Club or from Costco,
                                                                                                                                                                    just to basically buy himself a day or two.




                   A. Yes. 1 i
                  that right? 12Q. You reference the fact that Wappler has 9
     9                                                                                                                                                                   Q. He was refening, Wappler was refening
10                been calling you every day since you met with him, is 10                                                                                          to some inaccurate information that Petters had
11                                                                                                                                                                  provided him with?
12                                                                                                                                                                       A. Yes.
13                              Q. You say, "He would like the PCI cash 13                                                                                                    (Whereupon, Ritchie/Acorn
14                flow for the next 90 days, the hedge fund paperwork 14                                                                                                      Deposition Exhibit No. 44 was
15                from the hedge funds that we paid off with the $150 15                                                                                                      marked for identifcation.)
                  million (the terms of the notes, the collateral, et 16
16
                  cetera)." 1 7                                                                                                                                     BY MR. FLEMING:
17
18
19
20
21
                  flow? 19                 Did you provide him with the PCI cash 18

                               A. I don't - no, I didn't. 20
                                                                                                                                       what was 21
                                                                                                                                                                         Q. Showing you Exhibit 44, is that an
                                                                                                                                                                    e-mail from John Wappler to you and Jim Wehmhoff dated
                                                                                                                                                                    July 2nd, 2008?
                                                                                                                                                                         A. July 3rd, yes. July 3rd.
                                                                                                                                                                                                             the page
                               Q. What was your understanding of                                                                                                         Q. The e-mail at the bottom of
22                meant by the PCI cash flow? 22                                                                                                                    though is earlier in the e-mail chain.it.s July 2nd?
23                             A. You know, I never thought much of                                                                                  it 23          Do i need eyeglasses? Am I looking at that date
24               because I never ended up providing it to him. 24                                                                                                   wrong, page I, the e-mail at the bottom of the page?
25                  Q. What about the hedge fund paperwork, 25                                                                                                           A. Oh, July 2nd, yes. Right.

                                                                                                                                                                                         26 (Pages 98 to 101)
                                                                                                                                  Depo International, Inc.
                                                          (763) 591-0535 or (800) 591-9722 admin@depointernational.com
.1                          ..                                     ..                               ..                                   ..
          Case 09-04032                  Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                              Desc
                                                Exhibit(s) 5-7 Page 22 of 38

                                                     Deanna L. Coleman, Vol. I - 7128/2010
                                                        In re: Polaroid Corporation, et al.
                                                               Page 110                                                       Page 112

      1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                     DEANA L. COLEMA, VOLUM I - 7/28/10
                                                     the hedge fund notes. 2             (Whereupon, Ritchie/Acorn
      3 BY MR. FLEMING: 3
      2 Wehmhoffand I for, copies of



      4 Q. Do you recall around this time that 4
                                                                                         Deposition Exhibit No. 49 was
                                                                                         marked for identification.)
                                                                                BY MR. FLEMIG:

      7 provided? 7
      5 there were discussions about providing some type of 5
      6 additional security for the loans that Ritchie had 6                         Q. Showing you Exhibit 49, beginning on
                                                                                page 2, is that an e-mail from you to John Wappler
      8 MR. CAULEY: Objection to form. 8                                        dated August 8, 2008?
      9 THE WITNESS: Yeah, Tom had mentioned 9                                       A. Yes.
     10 that a couple of times. 10                                                   Q. What is it that you are attaching to
        BY MR. FLEMING: 12
     11 Q. What did he mention? 11
     12
                                                                                your e-mail?
                                                                                     A. Spreadsheet showing units sold, sale
     13 A. Just that they wanted additional 13                                  price and when it's due and that all of the
     14 security by Ritchie Capital wanted it and so did 14                     merchandise has been shipped and all of the
     15 Sabeses, so I didn't pay that close attention to it. 15                 merchandise was sold internationally.
     16 Q. Did you paricipate in any discussions 16                                 Q. On page 2 then, this is a spreadsheet
     17 about attempting to use Polaroid or Polaroid assets as 17               you attached to that e-mail?
             collateral? 18
     18 I didn't, no. I remember Tom talking 19
     19 A.
                                                                                     A. Yes.
                                                                                     Q. This is all fictitious information?
     20 about it, but I was not involved in any of that 20                           A. Yes.
     21 discussion. 21
     22 Q. What do you recall Tom talking about 22
                                                                                     Q. Now, when you say here that money was
                                                                                due at these various times, why was it due? I mean
     23 with regard to the Polaroid assets? 23                                  from the products that had already been sold, why was
     24 A. Possibly giving it to Ritchie Capital 24                             it not due until the times that you specify here? I
     25 as collateral and Sabeses and other investors. It was 25                know it's all made up, but what is it you were trying
                                                               Page III                                                       Page 113

      1          DEANNA L. COLEMAN, VOLUME I - 7/28110                     1         DEANNA L. COLEMAN, VOLUME I - 7/28/10
      2     just one ofthose things he would throw out quite a             2    to say here?
      3     bit, so I didn't think much of it.                             3               MR. CAULEY: Objection. Form.
      4           Q. You were aware on numerous occasions                  4               THE WITNESS: On the Sony PlayStations,
      5     where Tom Petters would suggest to investors the               5    that the week of August 18th we have a payment of
      6     possibility of using Polaroid assets as collateral to          6    $3,575,200 due from one of  the vendors, and not until
      7     secure their loans?                                            7    9/18 or 9/8 is our next payment due and there is two
      8               MR. CAULEY: Objection. Lack of                       8    payments due then. It's basically to buy ourselves
      9     foundation. Leading.                                           9   some more time, so the whole note he could see here
     10               MR. ROSOW: Object to form.                          10   was not going to be paid off until September 29th.
     11               THE WITNESS: Yes.                                   11   BY MR. FLEMING:
     12     BY MR. FLEMING:                                               12 -      Q. Now, in August, 2008, do you recall.
     13          Q. Was it your understanding that                        13   Wappler asking to be provided with the location of
     14     sometimes Tom Petters would use Polaroid or Polaroid          14   where warehouses were that stored the inventory?
     15     assets to lure new investors into the PCI scam?               15        A. No.
     16               MR. CAULEY: Objection. Calls for                    16        Q. At some point did Tom Petters direct
     17     speculation. Lack offoundation. Leading.                      17   that you send a check to Burnam rather than a wire
     18               MR. ROSOW: Join in the objections.                  is for $1.6 million?
     19                THE WITNESS: He used all of           his          19        A. Yes. That was just another way to buy

     20     companies basically. That is why he bought Polaroid           20   time. We didn't have the money in the account, but
     21     and bought Fingerhut and Sun Country. It was all kind         21   sending him a check and then he figured he would buy
     22     of one big -- I don't know what I'm trying to say             22   himself a couple of days.
     23     there. He would keep buying other companies so it             23        Q. SO a check was sent to Buram in
     24     would lure investors in so investors would think Tom          24   August of 2008 and they returned it because they
     25     was this wealthy guy.                                         25   preferred a wire and that delayed things for another

                                                                                                29 (Pages 110 to 113)
                                                             Depo International, Inc.
                                 (763) 591-0535 or (800) 591-9722 admin@depointernational.com
    ..                                ..                             ..                                                  ..                              ..
              Case 09-04032                   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                          Desc
                                                     Exhibit(s) 5-7 Page 23 of 38
                                                    Deanna L. Coleman, VoL. I - 7/28/2010
                                                       In re: Polaroid Corporation, et al.
                                                             Page 142                                                                        Page 144

           1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                               DEANNA L. COLEMAN, VOLUME I - 7/28/10
           2 a dinner with Greg Bell, Marlon Quan and Paul Traube 2                            Debbie Lindstrom to Bob White and Tom Petters dated
           3 at the Consumer Electronics Show in Las Vegas? 3                                  January 25th, 2008?



           6 A. Yes. 6
           4 A. Not Paul Traube. Larry Reynolds. 4                                                  A. Yes.
           5 Q. Lany Reynolds? 5                                                                     Q. In this e-mail Debbie Lindstrom talks
                                                                                               about a phone call that she received from Marlon Quan
           7 Q. At that time January of2008 had the 7                                          referencing some notes that will be past due in a few

           9 slowed down? 9
           8 payments from PCI on its outstanding loan obligation 8


         10 MR. ROSOW: Object to form. 10
                                                                                               days and she further reports that, "His investors are
                                                                                               very nervous right now." And she goes on to say after
                                                                                               finishing this call she called you back leaving a
         11 THE WITNESS: Yes, quite a bit 11                                                   message telling you about this.
                   MR. FLEMING: 12
         12 BYthere any discussion at that dinner 13
         13 Q. Was
                                                                                                         Do you recall her telling you about
                                                                                               this phone call from Marlon Quan?
         14 or during the time you were out at the Consumer 14                                       A. Yes.
         15 Electronics Show about that fact? 15                                                    Q. Did you have any communication with
         16 MR. ROSOW: Object to form. 16                                                      Marlon Quan as to why his investors were nervous?
         17 THE WITNESS: Yes. Greg Bell and 17                                                       A. No, other than, I guess, I don't think
         18 Marlon Quan were both getting kind of         nervous because 18                   I even had a conversation with Marlon about it, but I
         19 the payments were getting behind. Lany Reynolds 19                                 just assumed it was because of the late payments.
         20 talked to both of them individually, because they were 20                               Q. The late payments from PCI?
         21 asking Larr a lot of questions. They did ask me a 21                                    A. Right.
         22 couple of         times about the payments and I told them the 22                              (Whereupon, Ritchi.e/Acorn
                                                                                                           Deposition Exhibit No. 59 was

         25 what we 25
         23 same thing that I always told them, it's just retailer 23
         24 slow payments. Merchandise was shipped later than 24                                           marked for identification.)
                                                                      ......................
                                                                                               BY MR. FLEMING:
                                                              Page 143                                                                        Page 145

                                                                                                   DEANNA L. COLEMAN, VOLUME I - 7/28/10
           1 DEANNA    COLEMAN, VOLUME
           2Q.BY L. that same time did I - 7/28/102
           3
                     MR. FLEMING: 3
               Now, at                 Marlon Quan
                                                   1
                                                                                                   Q. Showing you Exhibit 59, on the first
                                                                                               page is an e-mail from Tom Petters to you dated

           5 was having? 5
           4 express to you any problems that he or his hedge fund 4

           6 MR. ROSOW: Object to form. 6
                                                                                               February 2nd, 2008?
                                                                                                    A. Yes.
                                                                                                   Q. If    you look at beginning at the bottom
           7 THE WITNESS: I think it was after that 7                                          of the page which ends with the numbers 3084, the
           8 when I found out he was having problems with his hedge 8                          second to the last page.
          9 funds because of Gottex or other investors. I don't 9                                   A. Okay.
         10 think it was in January. I think it was later than 10                                   Q. There is an e-mail from you to Tom
         11 that, but I can't remember. 11                                                     Petters dated February 2nd, 2009, and you say in the
            BY MR. FLEMING: 13
         12Q. What is it that you learned?12
         13
                                                                                               first sentence, "I believe we need at least 75 million
                                                                                               on Monday to take care of Bell, Frank and Acorn."
         14 A. Just that Cortex was after Marlon Quan, 14                                                 Do you recall what the circumstances
         15 and that came from Tom, and Tom had mentioned that 15                              were at that time that lead you to send this e-mail?
         16 Marlon could be in trouble personally because he 16                                     A. Tom would ask me to send him an e-mail
         17 wasn't following the guidelines of his loan agreement. 17                          letting me know what I needed like on a weèkly basis,
                                                                                               so this is one e-mail that I was sending him saying I
         19 on that? 19
         18 Q. Did Tom Petters provide any specifics 18

         20 A. No, nothing that I can remember. 20
                                                                                               needed 75 milion to take care of the following
                                                                                               people.
         21 (Whereupon, Ritchie/Acorn 21                                                            Q. Now, if    you go to the top of  the second
         22 Deposition Exhibit No. 58 was 22                                                   to the last page, the one that has the number 3084 on
         23 marked for identifcation.) 23                                                      the bottom right
         24 BY MR. FLEMING: 24                                                                      A. Yes.
         25 Q. Showing you Exhibit 58, an e-mail from 25                                            Q. There is an e-mail from you to Tom
.(
\
                                                                                                                 37 (Pages 142 to 145)
                                                         Depo International, Inc.
                                     (763) 591-0535 or (800) 591-9722 admin@depointernationaL.com
..                              ..                                ..                                   ..                               ..
          Case 09-04032              Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                            Desc
                                            Exhibit(s) 5-7 Page 24 of 38

                                          Deanna L. Coleman, Vol. I - 7/28/2010
                                             In re: Polaroid Corporation, et al.




      3 out." 3
      2 A. Yes. 2
      4 ~~~~ 4
      1 DEANNA L COLEMAN, VOLUME I - 7/28/10 1



      5 Q. What did you mean by the reference to 5
                                                      Page 198
                                                                                  DEANA L. COLEMA, VOLUM I - 7/28/10 ~
                                                                            Do you recall those questions?
                                                                                  A. Vou could ask them to me again.
                                                                                 Q. Sure. Do you recall testifying about
                                                                                                                        Page 200 1




                                                                            notes that Ritchie signed in early 2008, earlier
                                                                                                                                    J




      6 using ZINK to find a way out? 6                                     today?
      7 A. That ZINK was going to be this great 7                                 A. Ves.
      8 company and be able to raise all of this money so we 8                    Q. Do you recall, do you know whether or
      9 could bury Petters Company. 9                                       not Ritchie signed promissory notes with PGW in
     10 Q. You refer a number of times to bury 10                           February of2008?
     i 1 Petters Company. What did you mean by that? 1 i                          A. I believe I got copies of them later
     i 2 A. Tom always wanted to buy all of these i 2                       on.
     i 3 companies such as Fingerhut, uBid, Polaroid, Sun 13                    Q. In February, the month of
                                                                                                                February,
     i 4 Country to bury Petters Company, to bury the debt, the 14          2008, were you aware at that time Ritchie signed
     i 5 Ponzi scheme, and then if one of the other companies 15            promissory notes with PGW?
     i 6 went down and investors lost money, it would be an 16                    A. I guess I'm not sure.
     i 7 actual transaction instead of a fake transaction. 17                     Q. You weren't involved in any discussions
     18 Q. Okay. So one of the thoughts that you 18                         that led up to the signing of any of the promissory
     i 9 understood from talking to Mr. Petters that he had, he 19          notes by Ritchie in February of 2008, were you?
     20 would buy real companies like Polaroid and ZINK in the 20                 A. No. We received the money.
     2 i hopes that they made a lot of money and that would 21                    Q. Right, but as far as what was said by
     22 remedy all of the problems associated with PCI's 22                 Mr. Petters or someone else for PGW to Ritchie
     23 diverting business, correct? 23                                     concerning the February notes, you have no knowledge
     24 A. Correct. 24
     25 Q. If you had a real company that made . 25
                                                                            as to what those conversations involved, do you?
                                                                                 A. No.
                                                      Page 199                                                           Page 201

      1         DEANNA L. COLEMAN, VOLUME I - 7/28/10                   i         DEANNA L. COLEMA, VOLUME I - 7/28/10
      2    real money and real profits like ZIN or Polaroid, he         2        Q. And the first note that Ritchie signed
      3    would be able to payoff investors and start over             3   was for $3 i million, correct?
      4    again, correct?                                              4         A. There was a note, the Sony PlayStation?
      5         A. if  they were making money.                          5         Q. No. No. As you sit here today do you
      6         Q. But that was the thought, right?                     6   know when the Sony PlayStation note was executed?
      7         A. Yes.                                                 7         A. The exact date, no, I don't.
      8         Q. In that vein Tom Petters wouldn't do
                                                                        8         Q. Let me represent to you that the first
      9    anything to jeopardize the success of ZIN or Polaroid  9         loan was in February and did not relate to the Sony
     10    because he wanted those companies to succeed?         10         PlayStation?
     11                 MR. FLEMIG: Objection. Lack of                 11         A. Okay. It was 31 milion so it was the
     12    foundation.                                                 12. same dollar amount. That's what confused me.
     13                 THE WITNSS: Polaroid or ZIN wasn't             13         Q. Let me represent it was 31 millon.
     14    profitable.                                                 14   Apart from me having representing that to you, do you
     15    BY MR. CAULEY:                                              15   have any independent knowledge beside the first
     16         Q. Nevertheless, the thought from Mr.
                                                                       16   promissory note, that Ritchie signed with PGW?
     17    Petters was he wanted to see those companies succeed        17        A. No.
     18    so he wouldn't do anything to hurt their possibility        18        Q. Isn't it true in Februar of2008 JP
     19    of success, correct?                                        19   Morgan had an outstanding loan to Polaroid?
     20             MR. FLEMING: Objection. Lack of                    20         A. I know Polaroid had an outstanding loan
     21    foundation.                                                 21   to JP Morgan. I don't remember the time frame but,
     22                 THE WITSS: I don't believe he would.           22   yes, I do know they had an outstanding loan.
     23    BY MR. CAULEY:                                              23        Q. Wasn't the amount of
                                                                                                          that loan in
     24         Q. You were asked a couple of questions                24   February of2008 $31 millon also?

     25    about the notes Ritchie signed in February of 2008.         25             MR. FLEMING: Object. Lack of

                                                                                            51 (Pages 198 to 201)
                                                 Depo International, Inc.
                             (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                             ..                                   ..                                                        ..                 ..
              Case 09-04032                   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                    Desc
                                                     Exhibit(s) 5-7 Page 25 of 38
                                                           Deanna L. Coleman, VoL. I - 7/28/2010
                                                                  In re: Polaroid Corporation, et al.
                                                                        Page 218                                                                      Page 220
          1
                 Petters Company. 2
                       DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                 DEANA L. COLEMA, VOLUM I - 7/28110
         2



         5
         6
          3
          4      money? 4
                       Q. How much of           that was Burnam Hill's 3

                       A. That I don't know. I know it was in 5
                 that spreadsheet, but I don't remember. To me it was 6
                                                                                          Exhibit 46. Actually if you get to 42 first, we can
                                                                                          talk about that.
                                                                                                A. Okay.
                                                                                                Q. Why don't we talk about 42 first.
                                                                                                A. Okay.
         7       just like one loan and that was from Ritchie CapitaL. 7                        Q. Exhibit 42 is an e-mail from Tom
         8            Q. Do you know for a fact what Ritchie was 8                        Petters to you dated June 25th, 2008, and then the

      10
         9
                 March of 2008? 10
                 told when it made its loans to PGW in February and 9                     e-mail below this from you to Tom dated the same day.
                                                                                          Do you see that?
      11
      12
      13
      14
      15
                 know. 13
                       A. What Tom told me is that it was used to 11
                 payoff other investors. What they were told, I don't 12

                       Q. You weren't present when any 14
                 representations were made to Ritchie Capital 15
                                                                                                A. Yes.
                                                                                                Q. You wnte to Mr. Petters, "A meeting
                                                                                          with Ritchie Capital today. I have no clue what to
                                                                                          tell them as far as where their money went. Did you
                                                                                          tell them it was for a dealor what do they "think it
      16
      17
     . 18
      19
      20
                       A. No. 18
                 representatives concerning the use of proceeds that 16
                 money was going to be used to go to PGW, correct? 17

                       Q. You talked about a schedule that you 19
                 prepared for Mr. Wappler that delineated where the 20
                                                                                          was for?"
                                                                                                     Do you see that?
                                                                                                A. Yes.
                                                                                                Q. At least at this point you had no
                                                                                         understanding as to what Mr. Petters had told Ritchie
      21
      22
      23
      24
      25        were
                               23
                       A. Yes. 25
                 moneys went in connection with other investors being 2 1
                paid off. Do you recall that? 22

                       you?
                       Q. You weren't shown that schedule today, 24
                                                                                         conceming the use of the moneys that Ritchie had
                                                                                         given to PGW, correct?
                                                                                                A. No, because Tom told me they were
                                                                                         used -- he told me he was going to get money from
                                                                                         Ritchie r'onHol .uuglU'y 150,160 millon to payoff


        1
        2
        3
        4
                 A No. 2
                       DEANNA L. COLEMAN, VOLUME I - 7/28110 1


                schedule? 4
                       Q. When was the last time you saw that 3
                                                                        Page 219
                                                                                             DEANNA L. COLEMAN, VOLUME I - 7/28/10
                                                                                         other investors or to use for working capitaL. I just
                                                                                         found it hard to believe that Ritchie Capital was
                                                                                         going to wire Petters Company $150 milion to use to
                                                                                                                                                      Page 221




        5              A. I don't remember. 5                                            payoff other investors with no collateral, and then
        6            Q. You were asked questions that presume 6                          when John asked me that, I e-mailed Tom again and just
        7       that that schedule was prepared in the early summer of 7                 asked him again what he told Ritchie Capital because I


     10
        8
        9       prepared? 9
                2008. Do you know when, what month that schedule wa~ 8

                       A. I don't remember the exact date, no. 10
                                                                                         wasn't 100 percent sure if that is really what he told
                                                                                         them or if that is what he was just tellng me.
                                                                                               Q. At this point you didn't know what Mr.
     11                Q. Isn't it true that a number of           the 11                Petters told Ritchie Capital concerning the use of               the
     12         supposed payments,on that schedule reflected payments 12                 proceeds, correct?
     13         of Ritchie money to other investors was incorrect? 13                          A. At this point I knew he had told me
     14                A. I'm not sure what you -- 14                                    earlier it was used to payoff other investors, and I
     15                Q. Sure. As I understand your description 15                      just found that hard to believe. So I was asking Tom
     16         of the schedule, it indicated where Ritchie moneys 16                    again what he had told Ritchie CapitaL.   But he told
     17         went and it indicated Ritchie moneys went to payoff 17                   me after we received the money from Ritchie back in
     18         other investors, correct? 18                                             February that is what he told them, it was used for
     19
     20
                       A. Correct. 19
                            those entries were 20
                                                                                         working capital and to payoff other investors. I
                                                                                         just remember that because I found it really hard to
                       Q. A number of
     21
     22
     23
                       A. Yes. Yes. 22
                incorrect, right, they were made up? 21
                       Q. If    you go to the documents you have in 23
                                                                                         believe that a company would send you $150 milion
                                                                                         with no collateraL.
                                                                                              Q. Did this $ i 50 million come in all at
     24         front of you, I have questions about a senes of 24                       once?
     25        exhibits. The first one I want you to look at is 25                            A. No.
       ::¡..¡'~'$øg                                 ~;~~,X!~;~~                                               ,~ ,..._;'f,,;'Ø,,~~;!);KTh"'


                                                                                                             56 (Pages 218 to 221)
                                                                     Depo International, Inc.
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..                                     ..                                 ..                                           ..
          Case 09-04032            Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                        Desc
                                          Exhibit(s) 5-7 Page 26 of 38

                                            Deanna L. Coleman, Vol. I - 7128/2010
                                                In re: Polaroid Corporation, et al.
                                                         Page 222:                                                              Page 224
                                                                                                                                           t
      1         DEANNA L. COLEMAN, VOLUME I - 7/28/10                 1         DEANNA L. COLEMAN, VOLUME I - 7/28/10
      2         Q. How did it come in?                                2    I was told by Tom not to show Sun Country and not to
      3         A. In, I don't know, maybe ten different              3    show him personally.
      4     wires. I mean I don't remember the exact amounts or       4         Q. Right. So after you had that
      5     exactly how many. Some of it I believe, I think some      5    communication with Mr. Petters, I take it the
      6     of it went directly to Petters Company and some of it     6    conversation with Mr. Petters where he told you that
      7     went directly to Petters Group.                           7    the money was used to payoff other investors, you
      8         Q. By Petters Group you mean PGW?                     8    then had a subsequent conversation with Mr. Wappler,
      9         A. Yes.                                               9    correct?
     10           Q. What I'm having trouble understanding           10          A. I had, yes.
     11     is if you had a firm view as to what Mr. Petters         11        Q. And you told him that the money had
     12     supposedly told Ritchie, why are you e-mailing him       12    been used to payoff other investors, correct?
     13     when you say, "I have no clue what to tell them as far   13          A. I believe, I thought he knew it at that
     14     as where the money went. Did you tell them it was for    14    time, but okay.
     15     a deal or what do they think it was for?"                15        Q. That is an assumption on your part,
     16               My question is why would you ask that          16    correct?
     17     question if you thought you knew what Mr. Petters told   17          A. I believe he asked me what investors
     18     Ritchie?                                                 18    the money was used for, what investors were paid off.
     19             MR. FLEMING: Objection. Asked and                19          Q. But you are the one who told him in the
     20     answered.                                                20    initial, in the first instance that the money was used
                                                                     21    to pay other investors, correct?



                                                                                 A ..
     21             THE WITNESS: Mr. Petters lied to me a
     22     lot. i wanted to confirm it again. I found it really     22          A. I don't know ifl was the first one or
     23     hard to believe that some company would wire you $150    23    not. He asked me for a spreadsheet showing how the
     24     million to pay other investors off. So I just wanted     24    money was used to payoff the investors.
                                                                                                                                .n
     25     to make sure that is actually what he told them or if    25          \.. When was that

                                                         Page 223                                                               Page 225



      3 to me. 3
      1 DEANNA L COLEMAN, VOLUME I - 7/28/10 1
      2 he told them it was for a deal and he just was lying 2

      4 BY MR. CAULEY: 4
                                                                                DEANNA L COLEMAN, VOLUME I - 7/28110
                                                                                 A. I believe it was prepared right after
                                                                           this conversation here, so it would have -- I don't
                                                                           remember the exact date when it was prepared.



      7 minute. 7
      5 Q. If           you go to the next exhibit, which is 5
      6 Exhibit 43 -- let's stick with Exhibit 42 for a 6
      8 After this conversation, this e-mail 8
      9 exchange with Mr. Petters on Wednesday, June 25, 2008, 9
                                                                                 Q. Do you have any evidence that Mr.
                                                                           Wappler knew before you told him that the money that
                                                                           Ritchie sent to Petters Group Worldwide was used to
                                                                           payoff other investors?
                                                                                 A. I have no evidence that anyone else
     10 what did Mr. Petters tell you? 10
           A. After this? 11
     11Right. You write, "I have no clue what 12
     12 Q.
                                                                           told him that, but I don't think I was the first one
                                                                           to tell him that.
                                                                                 Q. Why do you say that? .
     13 to tell them as far as where the money went. Did you 13                  A. He wasn't surprised at all. I mean it
                                                                           was just a casual conversation. It wasn't like what
           was for?" 15
     15 writes back the same day, "Please 16
     14 tell them it was for a deal or what do they think it 14


     16 He
                                                                           investors did you use it for, why did you use it to
                                                                           payoff the investors. It was can you do a
     17 call me on this. I don't want to do bye-maiL." 17                  spreadsheet showing me how the money was used to pay

 19 right? 20
 20 A. I did, yes.19
     18 I assume you did call him on that, 18                              off the investors.
                                                                                 Q. Other than his apparent lack of
                                                                           surpnse, do you have any evidence that Mr. Wappler
 21 Q. What did he tell you? 21                                            knew before you told him in the summer of         2008 that
 22 A. I believe he told me that he told them 22                           money was used to payoff other investors?
 23 he used it to payoff other investors, and that is 23                         A. No, I have no evidence of that.
 24 what they wanted, because that is why I did the 24                          Q. How quickly after the e-mail we are
 25 spreadsheet showing them what investors we paid off. 25                looking at, Exhibit 42, did you communicate with Mr.

                                                                                               57 (Pages 222 to 225)
                                                      Depo International, Inc.
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       Case 09-04032                   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                 Desc
                                              Exhibit(s) 5-7 Page 27 of 38
                                                  Deanna L. Coleman, Vol. I - 7128/2010
                                                       In re: Polaroid Corporation, et al.
                                                             Page 226                                                          Page 228
   1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                           DEANNA L. COLEMA, VOLUME I - 7/28/10
   2 Wappler concerning how the funds were used, was it a 2
   3 day, was it a week? 3
   4 A. I don't remember. 4
                                                                                   Q. This was a list of the information that
                                                                              Mr. Wappler was asking you for within a week after you
                                                                              told him that the money was used to payoff other
   5 Q. Once you communicated to Mr. Wappler 5                                investors, correct?
   6 that Ritchie's money had been used to pay other 6                                 A. Yes.
   7 investors, he proceeded to bombard you with e-mails 7                             Q. You were doing everything you could to
   8 and phone calls to get information, didn't he? 8                         put Mr. Wappler off      and buy more time, weren't you?
   9 A. I think he was in the offce at that 9                                          A. Yes.
 10 time when he asked me, so he would keep stopping in my 10                      Q. You go to the next exhibit, which is
 11 offce and just asking me questions about it. 11                           dated four days later, at the bottom there is an
 12 Q. If               you go to Exhibit 43, which is the 12                 e-mail fromyoudatedJuly2,I'msorr,      it's from

 13 next exhibit, this is dated five days after your 13                       Wappler dated July 2, 2008, to you and Jim Wehmhoff.
 14 e-mail to Mr. Petters where you ask what should I tell 14                 It's Exhibit 44. You will see in the e-mail to you
 15 Wappler, and it's dated June 30,2008 from you to Tom 15                   and Jim, Mr. Wappler writes in the second paragraph,
 16 Petters, Jim Wehmhoff and David Baer, and you write, 16                   "As a follow up to our meeting last week, it would be
 17 "This is just what I thought it would tum out to be. 17                   quite helpful to understand a bit more about the hedge
 18 John Wappler from Ritchie Capital has been calling me 18                  fund paper purchased in February. I'm not really
 19 every day since I met with him." 19
 21 A. Yes. 21
                                                                             interested in any confidential counterparty
 20 Do you see that? 20                                                      information such as names of hedge funds,
                                                                             buyers/sellers of inventory or anything like that.
 22 Q. How many days had he been calling you 22                              But it would be great to understand more structural
 23 since you met with him? 23                                               details like any discounts to face value, terms of the
 24 A. If I would have met with him on the 24                                initial deals, et cetera."
 25 25th, it would have been five days, unless there was a 25                            Do you see that?
                                                             Page 227                                                          Page 229
  1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                            DEANNA L. COLEMAN, VOLUME I - 7/2S/l0

  3 is dated Monday. 3
  2 weekend in between there, which there was, since this 2


  4 Q. On the first day you met with him, you 4
                                                                                       A. Yes.
                                                                                       Q. That is another request by Mr. Wappler
                                                                             for more information concerning the investors that had

  6 investors, correct? 6
  5 told him the Ritchie money was used to payoff other 5                    been paid off, correct?
                                                                                       A. Correct.

  9 told him. 9
  7 A. Like I said before, I don't -- he asked 7
  8 me how the money was used and, yes, that is what I 8

10 Q. Once you told him it was used to pay 10
11 off other investors, he continued to pester you for 11
                                                                                       Q. If   you go back to the first e-mail we
                                                                             looked at in this string, Exhibit 42, which is your
                                                                             request from Petters what should I tell Wappler, do
                                                                             you see that?
                                                                                       A. Yes.
12 _ information about who the investors were and how much 12                          Q. Between February, 2008, when the
13 money was paid to them, correct? 13                                             loans were made and June 25, 2008, when you
                                                                             initial



15 that. 15
14 A. Yes. He wanted a spread sheet showing 14

16 Q. Exhibit 43 goes on and says, "He would 16
                                                                             communicated to Mr. Wappler, June 25, 2008, when you
                                                                             communicated to Mr. Wappler that the loans were used
                                                                             to payoff other investors, Mr. Wappler had not asked
17 like PCI cash flow for the next 90 days, the hedge 17                     you for any information, had he?
18 fund paperwork from the hedge funds that we paid off 18                        A. I don't believe I really talked to him
19 with the 150 milion (the terms of               the notes, the 19         prior to that.
20 collateral, et cetera.) And he's been calling me 20                                 Q. Ritchie hadn't asked you for any
21 about the 20 million coming in from vendors. i told 21                    information, had he?
22 him to put everything in an e-mail to all of           us on 22                     A. Not to me, no.
23 what he would like." 2 3
25 A. Yes. 25
                                                                                       Q. Isn't it tre that from February of
2 4 Do you see that? 2 4                                                     2008 to June of 2008, that Mr. Petters was discussing
                                                                             with Ritchie using Polaroid assets as collateral for

                                                                                                 58 (Pages 226 to 229)
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              Case 09-04032                                                  Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                                           Desc
                                                                                    Exhibit(s) 5-7 Page 28 of 38

                                                                                                    Deanna L. Coleman, VoL. I - 7/2812010
                                                                                                               In re: Polaroid Corporation, et al.
                                                                                                                                                 ,
                                                                                                                                      Page 230                                                                     Page 232
         1 DEANA L. COLEMA, VOLUM I - 7/28/10                                                                                                         1         DEANNA L. COLEMA, VOLUME I - 7/28/10
        2 the loans?                                                                                                                                  2          Q. If          you go to the last full paragraph
        3 A. I don't -- I wasn't involved in those                                                                                                    3    here, it says, "When we get together in Minnesota,
        4 conversations.                                                                                                                              4    it's relevant to our transaction. I'm happy to have
        5 Q. Are you denying they occurred?                                                                                                           5    you and Thane get optics to this side," it says if, it
        6 A. Not at all. I'm just saying I wasn't                                                                                                     6    should be "of   the business."
        7 there, I wasn't involved.                                                                                                                   7                Do you see that?
        8 Q. If                                      you go to Exhibit 48, which is an                                                                8          A. Yes.
        9 e-mail from Tom Petters dated August 1,2008 to John                                                                                         9          Q. This side of the business refers to the
     10 Wappler with a CC to you and others, do you see that?                                                                                        10    PCI diverting business?
     11 A. Yes.                                                                                                                                      11        A. Yes.
     12 Q. Mr. Petters writes to John, "John, I                                                                                                      12          Q. That is opposed to the other side of
     13 spoke to Deanna this morning and have asked that she                                                                                         13    the business which was the legitimate PGW business,
    14 not send any information of PCI diverting transactions                                                                                        14    correct?
    15 since we are not using this as a form of collateraL."                                                                                         15         A. Yes.
    1 6 Do you see where I'm reading from?                                                                                                           16          Q. Mr. Petters goes on to say, "However,
    1 7 A. Yes.                                                                                                                                      17   in the spirit of going forward together, I don't want
                                                                                                                                                                                                                              I


    18 Q. That was the reason why Mr. Petters                                                                                                        18   anything released out of our office in any collateral
    19 sent this e-mail to John Wappler, is he didn't want to                                                                                        19   form not relative to the focus of completing what we
    20 give Mr. Wappler information that would uncover the                                                                                           20   discussed. "
    21 diverting Ponzi scheme, correct?                                                                                                              21            Do you see that?
    22 A. Correct.                                                                                                                                   22         A. Yes.
    23 Q. And do you have any information that                                                                                                       23         Q. The reference to what we discussed was
    24 prior to June 25th, 2008, there was ever any                                                                                                  24   using Polaroid assets as collateral for the Ritchie
    25 discussion between anybody at Ritchie and ' at
             ..... ..........."..........................................,.........__....------_..............,.__.._....__....,.......
                                                                                                                                                     25   loans, correct?

                                                                                                                                     Page 231                                                                      Page 233
       1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                                                                                               DEANNA L. COLEMAN, VOLUME I - 7/28/10
       2 PGW or PCI concerning using PCI diverting transactions 2                                                                                               A. I don't know what they discussed. I
       3 as collateral for the Ritchie loans? 3                                                                                                           wasn't involved in it.
       4 A. I don't know if                                                            Tom did or not. I 4                                                     Q. It goes on to say, "Again, I have no
       5 don't know. I didn't. 5                                                                                                                          issue with yours or Thane's review. However, per your
       6 Q. If                                     you go to the next paragraph, it 6                                                                     e-mail, Deanna has asked me to put your request in
      7 reads, Mr. Petters writes to John Wappler, "I think 7                                                                                             writing prior to our decision to move to Polaroid as
       8 when David returns tonight from Japan, we'll be able 8                                                                                           collateraL. "



    10 loans." 10
       9 to decide upon which collateral will be used on these 9                                                                                                   Do you see that?


    12 A Y~.1
    11 Do you see that? 11
    13 Q. What is your understanding as to who 13
                                                                                                                                                                A. Yes.
                                                                                                                                                                Q. Was it your understanding the
                                                                                                                                                          discussions were ongoing aböut using Polaroid as
                                                                                                                                                          collateral for the Ritchie loans?
    14 the
          A. David for to there? 14
                is referred
    15 HeDavidthe lawyer Baer. 15
    16 Q.   was               the Petters 16
                                                                                                                                                               A. I know they were talking about it, yes.
                                                                                                                                                               Q. Isn't it true that some of        the money
                                                                                                                                                          that Ritchie loaned to PGW went to Polaroid?
    17 groups, right? 17
          A. Correct, yes. 18
    18 He wasn't involved in any diverting 19                                                                                                                  A. I believe it did. I need to look at
                                                                                                                                                          the spreadsheet, but I think some of it did.


    21 A. No. 21
    19 Q.
    20 scheme, was he? 20                                                                                                                                      Q. As you sit here today you don't know
                                                                                                                                                          how much?
                                                                                                                                                               A. I don't, no.
    22 Q. Wasn't it true he was having ongoing 22                                                                                                              Q. What is ZINK?
    23 conferences with Ritchie about using Polaroid as 23                                                                                                     A. ZINK is a company that Polaroid wanted
    24 collateral for the Ritchie loans? 24                                                                                                               to close down because they had spent so much money on

(
    25 A. That I don't know. 25
     f=~~'¡'*'(,:':'*~' ,
                                                                                                                                                          it and Bob White did.n't want to close it down. Bob
                                                                                                                                                                  ~.~Aú¡;'1,~:ç,¡@; ..,..;;¿


                                                                                                                                                                                    59 (Pages 230 to 233)
                                                                                                                            Depo International, Inc.
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               ..                                       ..                                       ..                                        ..
            Case 09-04032                 Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                         Desc
                                                 Exhibit(s) 5-7 Page 29 of 38

                                               Deanna L. Coleman, VoL. I - 7/28/2010
                                                    In re: Polaroid Corporation, et al.
                                                              Page 234                                                                 Page 236

        1         DEANNA L. COLEMAN, VOLUME I - 7/28/10                          1         DEANNA L. COLEMA, VOLUME I - 7/28/10
        2    White seen that there was potential there, so Bob took              2          Q. And you talked earlier about an exit
        3    it on. Petters Company invested quite a bit of money                3   strategy. Isn't it tre that Tom Petters viewed the
        4    into ZINK and then there was another investor, and I                4   success of lrNK and therefore the success of Polaroid
        5    can't remember his name that put a lot of money into                5   as an exit strategy from the Ponzi scheme?
        6    ZINK.                                                               6          A. Polaroid and ZINK were completely two
        7         Q. Who were the owners of lINK once it was                     7   separate companies, completely two different
        8    sold?                                                               8   companies.
        9         A.  Bob White was the owner of ZINK.                           9       Q. Right, except there is a certain
  10              Q.  Initially lINK was owned by Polaroid?                     10   synergy there to the extent they were working
  11              A. Correct.                                                   11   together, correct?

  12              Q.  When was lINK spun off from Polaroid?                     12          A. To some extent, yeah.
  13                A. Right away in the beginning. Like I                      13         Q. Isn't it true that Mr. Petters believed
  14         said, Polaroid wanted to close it down and just shut               14   that the relationship between ZINK and Polaroid had
  15         it down.                                                           15   the potential of making both companies very
  16                Q. Did you ever own any stock in lINK?
                                                                                16   profitable?
 17                 A. I did.                                                   17          A. That, I don't know what Tom's belief
 18                 Q. What is the status of   that stock?                      18   was.
 19                 A. It's in the receivership's hands. Bob                    19          Q. You talked about the legitimate
 20          White gifted it to me.                                             20   companies being a way out of       the Ponzi scheme. Do you
 21                Q. Once Polaroid spun off lINK, isn't it                     21   recall that testimony?
 22          true there was a strategic relationship between ZINK               22          A. Yes.
 23          and Polaroid relating to developing products?                      23        Q. Isn't it true that ZrNK and Polaroid as
 24                 A. Yeah. I wasn't really involved in                        24   well as the relationship between ZINK and Polaroid
 25          that. That was Bob and Tom mainly.                        ......
                                                                                25                   ways to make
                                                                                     were possible ._-_.__........,...profits that would get out
                                                                                                 ..
.....

                                                              Page 235                                                                 Page 237

        1 DEANNA L. COLEMAN, VOLUME I - 7/28/10 1                                          DEANNA L COLEMAN, VOLUME I - 7/28/10


        4 A. Yes. 4
        2 Q. Were you aware ofa relationship, a 2
        3 business relationship between lINK and Polaroid? 3
                                                                                     of   the Ponzi scheme?
                                                                                          A. Tom would see Polaroid as one company,
                                                                                     yes, ZINK as another company. I never once thought of


        7 A. Yes. 7
        5 Q. Did it relate to paper that had ink 5
        6 embedded in it, do you recall that? 6
        8 Q. What was your understanding as to the 8
        9 technology that lINK and Polaroid were trying to 9
                                                                                     the two together as a company are a way to get out.
                                                                                     Polaroid as one and ZINK as one.
                                                                                            Q. Okay. Isn't it tre money came out of
                                                                                     Polaroid to help with cash needs for other Petters
                                                                                     companies?
 10 develop together? 10                                                                    A. The way I looked at it and the way I
 11 A. You know, I'm not 100 percent sure what 11                                    put it on the books, Petters Company, Inc. provided
 12 all they were trying to do together. I know Bob White 12                         loans to Polaroid. Petters-Company, Inc. did take
 13 come into my offce and he would complain because he 13                           some money back from Polaroid and I put it as a
 14 didn't want Polaroid involved in it and Tom was. 14                              repayment on the loans. At the end Polaroid stil
 15 Q. Didn't want Polaroid involved in ZINK's 15                                    owed Petters Company, Inc. money.
 16 business? 16
17 A. Right. It was his company. 17
                                                                                            Q. You referred earlier to Polaroid making
                                                                                     loans to Sun Country?
18 Q. Isn't it tre that Polaroid held the 18                                              A. Right.
19 intellectual propert that lINK was using, Polaroid 19                                    Q. Isn't it true that there are other
20 owned the intellectual propert that lINK was using? 20                            instances besides that in which Polaroid moneys was
21 A. I know at one time they did. I don't 21                                        used to fund other operations within the Petters
22 know how it ended up. 22                                                          organization?
23 Q. Isn't it tre that if ZINK was a 23
25 A. Yes. 25
                                                                                            A. There are times where Polaroid wired
24 success, that was going to be good for Polaroid? 24                               money to Petters Company, Inc. to pay for the Sabeses
                                                                                     notes. There again it was a repayment on what money

                                                                                                         60 (Pages 234 to 237)
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     ..                     ..                     ..                      ..
Case 09-04032   Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23   Desc
                       Exhibit(s) 5-7 Page 30 of 38
               ..                          ..                         ..                           ..
         Case 09-04032      Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23           Desc
                                   Exhibit(s) 5-7 Page 31 of 38

                                   Robert D. White, Vol. I - 7/26/2010
                                    In re: Polaroid Corporation, et al.

                                                                                           Page 1
                         ROBERT D. WHITE, VOLUME I - 7/26/10
                               UNITED STATES BANKRUPTCY COURT
                                   DISTRICT OF MINNESOTA

             In re:                       JOINTLY ADMINISTERED UNDER
                                                CASE NO. 08-46617                                       ¡
             POLAROID CORPORATION, ET AL.,                                                              ,
                               Debtors.                                                                 it



              (includes:                                                                                I
                                                                                                        ~

             Polaroid    Holding Company;
                                                                                                        ~
             Polaroid    Consumer Electronics, LLC;                                                     1


             Polaroid    Capital, LLC;
             Polaroid    Latin America I Corporation;
             Polaroid    Asia Pacific LLC;
             Polaroid    International Holding LLC;
             Polaroid
             Polaroid
                         New Bedford Real Estate, LLC;
                         Norwood Real Estate, LLCr
                                                                       CERTIFIED
             Polaroid    Waltham Real Estate, LLC)                    TRANSCRIPT

             John R. Stoebner, Chapter 7 Trustee,
                              Plaintiff,
                      vs.                                          ADV. No. 09-4032

             Ri tchie Capital Management, L. L. C. ,
             as administrative and collateral agent,
             Ri tchie Special Credit Investments, Ltd.,
             Rhone Holdings II, Ltd., Yorkville
             Investments I, L. L. C., and Ritchie Capital
             Structure Arbitrage Trading, Ltd.,
                              Defendants.


              VIDEOTAPED DEPOSITION OF ROBERT D. WHITE, VOLUME I


                                                                                               i
......
                                                                                          EXHIBIT
                                                                                    ~
                                                                                   .~
                                          .. ~"ceY'                                ß

                                        Depo International, Inc.
                    (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                   ..                                              ..                                                 ..                                                                             ..
               Case 09-04032                          Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                                         Desc
                                                             Exhibit(s) 5-7 Page 32 of 38

                                                                           Robert D. White, Vol. I - 7/26/2010
                                                                            In re: Polaroid Corporation, et al.
                                                                                     Page   6                                                                                                         Page             8

           1            ROBERT D. WHTE, VOLUM I - 7/6/1 0                                            1         ROBERT D. WHITE, VOLUME I - 7/26/10
          2               EXHBIT INDEX CONTINED                                                      2    represent Mr. White.
          3
                 EXHBIT NO.8 MAD, 7/3/03 memo to Tom Petters,                                        3               THE VIEOGRAHER: Would the court
          4            Bob White and Deanna Munson from Tom Hay.... i 06                             4    reporter please administer the oath.
                 EXHBIT NO.9 MAD, Appointment scheduled and                                      5
          5            e-mails..................................... i 08
                 EXHBIT NO. i 0 MARKD, 2129/08 e-mail string re:
                                                                                                 6                       ROBERT D. WHITE,
          6        Acom.......................................109                                7                  after having been first duly swom,
                 EXHIBIT NO. i i MARKD, 3/1 1/08 e-mail to Tom Petters                           8                  deposes and says under oath as follows:
          7        and Bob White from Deanna Coleman...........! 19                              9                                  ***
                 EXHBIT NO. 12 MAD, 4/24/08 e-mail from Bob
          8            White re: noteslBob White................... i 23                        10                   THE VIDEOGRAHER: You may begin.
                 EXHBIT NO. i 3 MAD, 4124/08 e-mail from Bob                                    11
          9            White re: marlonlacornobwhite............. 133                           12                          EXAINATION
                 EXHBIT NO. 14 MARD, 4/08 e-mail string re:                                     13       BY MS. SMALLEY-FLEMING:
      10               Summary ofTenns............................ i 38
      11                                                                                        14           Q.  Sir, wil you state your full name for
      12                                                                                        15       the record.
      13                                                                                        16             A.     Robert Dean White.
      14
      15                                                                                        17             Q.     How old are you?
      16                                                                                        18             A.      69.
      17                                                                                        19              (Whereupon, Ritchie/Acorn
      18                                                                                        20
      19
                                                                                                                Deposition Exhibit No.1 was
     20                                                                                         21              marked for identification.)
     21                                                                                         22       BY MS. SMALEY-FLEMING:
     22                                                                                         23
     23
                                                                                                              Q. Mr. White, I'm showing you what has
     24
                                                                                                24       been marked Ritchie/Acorn Exhibit 1. Is this the
     25                                                                                         25       information fied by the Department of Justice in the
                                                                                    Page    7                                                                                                        Page              9

      1                 ROBERT D. WHITE, VOLUME I - 7/26/10                                      1            ROBERT D. WHITE, VOLUME I - 7/26/I0
      2                         PROCEEDINGS                                                      2       U.S. Attorney's Office which commenced criminal
      3            Whereupon, the deposition of ROBERT D. WHITE,                                 3       proceedings against you?
      4         VOLUME I, was commenced at 9:29 a.m. as follows:                                 4            A. Yeah, it looks like that.
                                          ***
      5                                                                                          5            Q. We'll mark this Exhibit 2.
      6                  THE VIDEOGRAPHER: This is the video                                     6                 (Whereupon, Ritchie/Acorn
      7         operator speaking, Don Carl, of Depo International,                              7                 Deposition Exhibit No.2 was
      8         Inc.                                                                             8                 marked for identification.)
      9                       Today's date is Monday, July 26, in the                            9       BY MS. SMALLEY-FLEMING:                                                                                           ~

     10         year 2010. The time is now approximately 9:29 A.M.                              10            Q. Showing you what has been marked
                                                                                                                                                                                                                           ;~
                                                                                                                                                                                                                           j
     11                    We are at 701 Fourth Avenue South,                                   11       Ritchie/ Acom Exhibit 2, is the plea agreement and                                                                ~
                                                                                                                                                                                                                           ~
     12         Suite 300, Mineapolis, Minesota, to take the video                              12       sentencing stipulation between you and the government? ,
     13         deposition of Mr. Robert White in the matter                                    13            A. Yes. I believe that is.
     14         consolidated for the Polaroid adversary depositions,                            14            Q. On pages i through 4 of this document,
     15         numbers 09-4032 and 09-4031.                                                    15       is that the factual basis?
     16                    Will counsel please identify themselves                              16            A.     Which document are you referring to?
     17         for the video record.                                                           17            Q.    We are still looking at Ritchie/Acorn
     18                    MS. SMALLEY-FLEMING: Sandy                                           18       Exhibit 2.
     19         Smalley-Fleming and Mark Enslin of      Lindquist & Vennum                      19             A. Okay.
     20         on behalf of John Stoebner, Trustee.                                            20             Q. On pages 1 through 4 of that document,
     21                    MR. BOYD: Thomas Boyd here on behalf                                 21       are those the factual bases for your guilty plea in
     22         of Acorn Capital Group.                                                         22       the criminal proceeding?
     23                    MR. JORISSEN: James Jorissen on behalf                               23            A. I believe so, yes.
     24         of the Ritchie entities.                                                        24            Q. Now, in this plea agreement on page 1
     25                    MR. FRIEDBERG: Joe Friedberg, I                                      25       you are agreeing to plead guilty or you agreed to
                                                                                                                       ;i;.A~.l",'f;:"Se:l;'" .. . :'~~ij;Z',"''''m~.=:;''~,~,~-~_;¡.;; .'~~ **",,::,""~~'",r:'(-1?,


                                                                                                                                                     3 (Pages 6 to 9)
                                                                                Depo International, Inc.
                                        (763) 591-0535 or (800) 591-9722 admin@depointernational.com
~                                       ..                                    ..                                   ..                             ..
              Case 09-04032                  Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                 Desc
                                                    Exhibit(s) 5-7 Page 33 of 38

                                                   Robert D. White, VoL. I - 7/26/2010
                                                    In re: Polaroid Corporation, et al.
                                                               Page 10                                                                Page 12 .
       1             ROBERT D. WHITE, VOLUME I - 7/26/10                                 ROBERT D. WHITE, VOLUME I - 7/26/10
       2      plead guilty to mail fraud in violation of          Title 20,        of the ground rules.
       3      United States Code, Section 1341, and money                               A. Okay.
       4      laundering, in violation of          Title 18, United States              Q. First, you are being videotaped as well
       5      Code, Section 1957, correct?                                         as the court reporter is taking your testimony so we
      6               A. Yes.                                                      need for you to provide all verbal responses to the
      7                                                                            questions.
                      Q. Let's mark this as 3.
      8                     (Whereupon, Ritchie/Acorn                                   A. All right.
       9                    Deposition Exhibit No.3 was                                 Q. Okay. And if      you need a break, let me
    10                      marked for identification.)                            know. We will be taking breaks periodically, but I
    11        BY MS. SMALLEY-FLEMING:                                              ask that if you need a break, that you ask for one
    12                Q. I have handed to you what has been
                                                                                   once the question has been answered, so that you are
    13        marked Ritchie/Acorn Exhibit 3.                                      not asking for a break when there is a question
    14            A. Um-hum.                                                       pending. Does that make sense?
    15                Q. I wil represent to you that is a copy                          A. Yes, it does.
    16        of   the transcnpt ofyour testimony in the cnminal                        Q. If   there is something I ask that you
    17        tnal of   Tom Petters.                                               don't understand, you let me know and I wil clarifY.
    18                A. Okay.                                                          A. Urn-hum, yes.
    19                Q. Do you recall testifying in that case?                         Q. Where did you grow up, sir?
    20                A. Yes, I do.                                                     A. I grew up in the Minneapolis area.
    21                Q. Were you under oath?
                                                                                   Grew up in Edina.
    22                A. Yes.                                                           Q. What type of        businesses have you been
    23                                                                             involved in in your life?
                      Q. And did you testify truthfully?
    24                A. I tried to, yes.                                               A. I worked in the beginning for major

    25                Q. Now, Mr. White, I'm not going to go                       companies like Honeywell, IBM and Munsingwear. Late
                                                               Page                                                                   Page 13



      3 A. Good. 3
      1 ROBERT D. WHITE, VOLUM I - 7/26/1 0 1                                           ROBERT D. WHITE, VOLUME I - 7/26/10
      2 through all of the testimony -- 2                                          I had some businesses of my own, and that has been a
                                                                                   variety of different businesses, and then I ended up




      8 ~d~. 8
      7 A Ob~ 7
      4 Q. -- that you provided in the criminal 4                                  working for the Petters Company.
      5 trial because we have it here as an exhibit, but I am 5                         Q. What sort of small businesses did you
      6 going to go through some pieces of that testimony here 6                   own?
                                                                                        A. Small manufacturing company. And I
                                                                                   worked for a brokerage firm for awhile.
    9 Q. Now, in terms of sentencing, when
    10 you be sentenced?will 9             10                                          Q. Now, was the small manufacturing
                                                                                   company a gift business?
    11 A. September 15th. 11.
    13 A. Kyle. 13
                                                                                     . .A.- Yes.
    12 Q. Who is the sentencing                   judge? 12                             Q. When did yon stop full-time employment
                                                                                   with the gift business?
    14 Q. What is your understanding of the 14                                          A. About '99.
    15 maximum punishment you face? 15                                                  Q. Why did you stop full-time employment
    16 A. You know, I'm not sure what it is, to 1 6                                there?
       be honest with idea? 18
    17Q. Do you have anyyou. 17
    18
                                                                                        A. Tom asked me to work part-time for him.
                                                                                       Q. Now, you said you also owned a small
    19 A. I think it's like 20 years. 19                                           brokerage firm. When was that?
    20 Q. Have you had your deposition taken 20                                         A. No. I said I worked for a small
    21 before, sir? 2 1                                                            brokerage firm.
    22 A. Not regarding this. 22
    24 A. Yes. 24
                                                                                       Q. Excuse me. You worked for a small
    23 Q. But you have in the past? 23                                             brokerage firm. When was that?
                                                                                        A. '91 to '94.
      e....
                           just a few 25
    25 Q. Ijust want to remind you of                                                   Q. Why did you leave there?
                                                                                                           4 (Pages 10 to 13)
                                                          Depo International, Inc.
                                  (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                                                  ..                         ..                                            ..                             ..
              Case 09-04032                                      Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                   Desc
                                                                        Exhibit(s) 5-7 Page 34 of 38

                                                                            Robert D. White, Vol. I - 712612010
                                                                             In re: Polaroid Corporation, et al.
                                                                                     Page 74                                                                 Page 76
            1 ROBERT D. WHITE, VOLUME I - 7/26/10 1
              foundation. 3
           2 THE WITNESS: Yes. 2
           3
                                                                                                               ROBERT D. WHITE, VOLUME I - 7/26/10
                                                                                                      excuse. What do you mean by that?
                                                                                                              A. What I'm trying to say is this would be
           4 BY MS. SMALEY-FLEMING: 4                                                                 an answer that Deanna could use as to why this person
           5 Q. Then above Tom responds to you, Deanna 5                                              couldn't go to the warehouses. It would be a reason
           6 Coleman, Dave Baer, dated August 11,2008, "No!!! 6                                       she could use to put this person off. There were
           7 That will further violate the confidentiality that has 7                                 actual confidentiality agreements between the various '
           8 been broken already." 8                                                                  lenders that did exist, but the purpose of what i
        9 MR. JORISSEN: Object to the form. 9                                                         would understand and believe that this would refer to
       10 THE WITNESS: I'm saying yes. I 10                                                           would be this would be a good excuse for Deanna to
       11 apologize. I nodded. 11                                                                     use.
       12 BY MS. SMALLEY-FLEMING: 12                                                                          Q. To avoid having--
       13 Q. Now, when you read this e-mail from 13                                                       A. Someone go look -- excuse me for
       14 Tom, what did you understand he was talking about when 14                                  interrupÜng.
       15 he said, "That will further violate the 15                                                          Q. Go ahead.
       16 confidentiality that has been broken already"? 16                                                  A. For having someone go to a warehouse
      17 MR. JORISSEN: Objection. Lacks 17
      18 foundation. 18
      19 MR. BOYD: Object to the form. 19
                                                                                                     and try to look at some inventory that didn't exist.
                                                                                                             Q. Were you aware of any investors that
                                                                                                     contacted the retailers directly to check on whether
      20 THE WITNESS: I suspect that Tom was 20                                                      these were valid purchase orders?
      21 trying to come up with a reason for Deanna to respond 21                                             MR. BOYD: Object to the form.
      22 by, no, I can't give you the locations or make up some 22                                            MR. JORISSEN: Object to the form.
      23 locations. I'm                          just copied on a memo and I'm 23                             THE WITNESS: I think that GE Capital
      24 speculating as to why Tom would have answered that 24                                       contacted Costco once. I don't know of another
       25 way. And I think that makes sense to me. 25
     .....................                                                                           situation.
                                                                                    Page 75                                                                 Page 77
                                                                                                                                                                       .,
        1 ROBERTD. WHITE, VOLUM                                                I - 7/26/10 1             ROBERT D. WHITE, VOLUME I - 7/26110                          m

        2 BY MS. SMALEY-FLEMING: 2                                                                   BY MS. SMALLEY -FLEMING:                                          ~
                                                                                                                                                                       ~j
        3 Q. I'm asking you what you understood when 3                                                  Q. Do you know whether the Sabes folks
          He's writing to you. 6
        5MR. JORISSEN: I'm going to object. It5
        4 you received the e-mail, what you understood he meant. 4                                  contacted the retailers?
                                                                                                             A. I don't know.

        7 lacks foundation. 7
        6

        8 MR. BOYD: I join. 8                                                                       orders?
                                                                                                             Q. Checked on the validity of



                                                                                                           A. I do not believe they did. That is
                                                                                                                                                  the purchase


      9 TI WITNSS: I again respond with I 9                                                         speculation on my part. They may have checked them
     10 looked at it, if! looked at it, and thought, okay, 10                                       out and decided to do whatever they did. I have no
     11 he's telling Deanna don't give him the information and 11                                   firsthand knowledge or no reason to believe that they
     12 this is the excuse you could use. 12                                                        did.
     13 BY MS. SMALLEY-FLEMIG: 13                                                                          Q. Was Sabes satisfied, were their loans
     14 Q. You say the confidentiality is an 14                                                     satisfied?
     15 excuse because there were no warehouse locations for 15                                            A. Sabeses?
     16 anyone to visit, isn't that correct? 16                                                            Q. Sabeses.
     1 7 MR. BOYD: Object to the form. 17                                                                  A. Were paid down, not in fuIl, but a
     18 MR. JORlSSEN: Object to the form. 18                                                        great deaL.
     19 THE WITNSS: There were warehouse 19                                                                Q. Why were they paid down a great deal?
     20 locations, and Lany Reynolds had some warehouses. 20                                                  MR. BOYD: Object to the form. Lack of
     21 There would have been no merchandise that this guy 21                                       foundation.
     22 would have wanted to look at. Okay. 22                                                                   MR. JORISSEN: I will        join in that
     23 BY MS. SMALEY-FLEMING: 23                                                                   objection.
     24 Q. I understand. So this notion of 24                                                                THE WITNESS: There were a couple of
     25 confidentiality, you testified that would have been an 25                                   reasons that I know of And Tom told me that Jon
      ''iy.'' "q;-'~~n",H"'~'l:::./-:;¿":S~_~i~,': ~i,,~qJ'~;;,))00ti.i~W


                                                                                                                               20 (Pages 74 to 77)
                                                                                Depo International, Inc.
                                               (763) 591-0535 or (800) 591-9722 admin@depointernational.com
..                                                    ..                                    ..                                    ..
               Case 09-04032                    Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                      Desc
                                                       Exhibit(s) 5-7 Page 35 of 38

                                                            Robert D. White, Vol. I - 7/26/2010
                                                              In re: Polaroid Corporation, et al.
                                                                        Page 78                                                               Page 80
          1                    ROBERT D. WHITE, VOLUM I - 7/26/10                       1             ROBERT D. WHITE, VOLUME I - 7/26/10
         2                 Sabes threatened him with his life ifhe didn't pay           2         A. No. You are not understanding what I
         3                 them. There is credibility to that threat in that the        3    tried to say. What I tried to imply was that Bob
         4                 Sabes family historically is the mob in Minneapolis.         4    Sabes's father looked at one of the purchase orders,
         5                 BY MS. SMALEY-FLEMIG:                                        5    and it was poorly done, and he said, "This looks
         6                     Q. Why, do you know why the Sabeses had                  6    fake."
         7             gotten to the point where they were making a threat on       7                    I do not have any belief that he - and
         8             Tom Petters' life in order to get paid?                      8        I think in fact that he did not contact any of the
         9                       MR. BOYD: Object to the form. Lack of              9        vendors to the stores at all. I think he looked at
     10                foundation.                                                 10        it. This is my speculation. He looked at it and
     11                          MR. JORISSEN: The same objection.                 11        said, "This is fake and this is bull shit." And he
     12                          THE WITNSS: Tom came to me once and               12        didn't want to upset Tom's apple cart. He just wanted
     13                said that Bob presented him with a purchase order that      13        Tom to pay him off because if he called -- this is
     14                appeared to be fake and said this is obviously a fake       14        again my speculation -- if he would have forced an
     15                purchase order. Okay. And led them to suspicions.           15        issue, the whole thing would have - he would see no
   16                            Later Jon Sabes called me and said,               16        opportunity for him to be paid back. So he just said,
   17                 "The purchase order numbers they use on Sam's are not        17        "Tom, this PO looks fake as could be. I just want to
   18                 the right format for what Sam uses on their purchase         18        be paid back and we wil walk away from here."
   19                 orders, and they don't use purchase orders like this.        19                 And then Jon called me, I think after
  20                  They use electronic purchase orders." And I said, "I         20        that, he started looking at the format and looked at
  21                  don't know for sure what the deal is with that, Jon.         21        the format of purchase orders, concluded the format
  22                  I think that the things for diverted goods are               22        was not what they used, asked me about it. I referred
  23                  different, but you will have to talk to Tom about it."       23        him to    Tom.
 24                            Q. Was it after that conversation that--            24                   And Tom told me that Jon said pay us
 25
........................
                              A. Sabeses any new mnnou                             25        back and then a little later he told me that Jon said
                                                                       Page 79                                                                Page 81
      i ROBERT D. WHITE, VOLUME I - 7/26/10 i                                                     ROBERT D. WHITE, VOLUME I - 7/26/10
      2 The arrangement was reached between Tom and the 2                                   that they had to be paid back or else he would be
      3 Sabeses that he would pay them back at the rate of $20 3                            kiled. And I don't know how that was phrased. Okay.
      4 milion a month unti their loans were paid off in 4                                  I just know that Tom told me.
     5 full. I cannot remember exactly whether it was like 5                                          What I knew, what I know directly about
     6 180 milion or $200 milion that was owed at that 6                                    all of that is simply that Jon Sabes asked me about
     7 time, but they were paid down to I believe in the 7                                  the format. Told me this is not the format of the
     8 neighborhood of $18 milion when the raid took place. 8                               Sam's purchase orders. And I told him that I thought
     9 Q.. SO like the Sabeses, if any of the 9                                             possibly they were different for diverted goods, that
 10 investors had simply contacted one of the retailers 10                                  I didn't know, and that he should talk to Tom.
11 and checked on the purchase orders, they would have 11                                         Q. Do you know whether anyone at Ritchie
12 found out that the purchase orders werè fake, correct? 12                                ever contacted the retailers?
13 MR. BOYD: Object. i 3                                                                          A. I have no idea.
14 MR. JORISSEN: Object to the form. 14                                                           Q. Do you know whether anyone at Acorn
15 MR. BOYD: Excuse me. i 5                                                                 ever contacted the retailers?
16 THE WITNESS: I don't think that is 16                                                           MR. BOYD: I object to the form.
i 7 correct. i think that you are implying that the 17                                             THE WITNESS: I have no idea.
18 Sabeses contacted. I don't think they actually did. 18                                   BY MS. SMALLEY-FLEMING:
19 MR. BOYD: May I interpose an objection 19                                                     Q. SO other than like the conversation we
20 to form and lack offoundation. 20                                                        just reviewed between you, Deanna and Wapplerwhere he
           join in the
22 offoundation.lack 21                                                                     is asking about the status of payments, you don't know
21 MR. JORISSEN: I will

                       22                                                                   whether Ritchie, for example, or anyone there took any
23 BY MS. SMALLEY-FLEMING: 23                                                               further steps to figure out what was the problem with
24 Q. SO you don't know for certain whether 24                                              nonpayment, is that correct?
25 they did, you were just told by -- 25                                                              MR. JORISSEN: Object to the form.

                                                                                                                  21 (Pages 78 to 81)
                                                                  Depo International, Inc.
                                        (763) 591-0535 or (800) 591-9722 admin@depointernational.com
         ..                                 ..                                ..                                      ..
          Case 09-04032            Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                              Desc
                                          Exhibit(s) 5-7 Page 36 of 38

                                             Robert D. White, Vol. I - 7/26/2010
                                                 In re: Polaroid Corporation, et al.
                                                       Page 138                                                            Page 140 ;

   2
   3
     1
              let us know. 2
                   ROBERT D. WHTE, VOLUM I - 7/26/10 1

                      TH WITNSS: I'm okay for now. I 3
                                                                               ROBERT D. WHITE, VOLUME I - 7/26/10
                                                                               Q. Why don't we take just a short break.
                                                                          I am probably pretty close to being done.
   4          would like to get as much of this done as we can. 4              A. Okay.
   5          Unless somebody else wants to. 5                                      THE VIDEOGRAPHER: Going off              the video
   6                  MS. SMALEY-FLEMING: No. I'm fine. 6                 record. The time is approximately 2:40 P.M.
   7          Mark that Exhibit 14 for me. 7                                        (Recess taken.)
   8                  (Whereupon, Ritchie/Acorn 8                                   THE VIDEOGRAPHER: We are               back on the
   9                  Deposition Exhibit No. 14 was 9                     video record. The time is now approximately 2:53 P.M.
 10                   marked for identification.) 10                                MS. SMALLEY-FLEMING: 1 don't have any
 11           BY   MS. SMALEY-FLEMING: 11                                 further questions for the witness.
 12                Q. I handed to you what has been marked 12                            EXAMINA nON
 13           Ritchie/Acorn Exhibit 14. This is an e-mail string on 13    BY MR. JORISSEN:
 14           the first page. I refer you to the e-mail below from 14          Q. Very good. Mr. White, my name is Jim
 15           Paul Durosko to Jim Wehmoff, you, Marlon Quan and 15       Jorissen. I represent the Ritchie entities in one of
16
17
18
19
20
                   A. Yes. 18
              Paul Seidenwar dated April 25, 2008, or I should say 16
              this is an e-mail from Paul to you, correct? 17

                   Q. And Paul writes, "JimIob, As the 19
              document is still under review, I made one tweak to 2 0
                                                                         these adversary proceedings.
                                                                                   During your earlier testimony you were
                                                                         talking about ZINK and I wanted to backfill a little
                                                                         bit on ZINK. First, when did you acquire your stake
                                                                         in ZINK?
21            the security section... obviously our security 21                A. She mentioned the date 2005, sometime
22            includes the Polaroid assets." 22                          or another, and that is probably correct.
23                    Then Jim Wehmoff writes back to Paul, 23                 Q. At that time when you acquired ZINK,
24
25            correct? 25
              and that is an e-mail above dated April 28, 2008, 24

                                                       Page 139
                                                                         what was the nature of the transaction, what did you
                                                                         pay for it?
                                                                                                                           Page 141


  2 A. Urn-hum. 2
  1 ROBERT D. WHITE, VOLUME I - 7/26/10 1

  3 Q. And he says, "Paul, we will review the 3
                                                                              ROBERT D. WHITE, VOLUME I - 7/26/10
                                                                              A. A note, I took a note owing $8 milion,
                                                                         the company would pay $8 milion for it.
  4 term sheet with Tom Petters tomorrow and call or 4                        Q. Did you personally guarantee that note?
  5 e-mail a time to discuss and hopefully finalize. Bob, 5                   A. I don't remember.
  6 Deanna and myself are not in a position to commit 6                       Q. Who was the note to?

  8 A. Urn-hum. 8
  7 Polaroid assets according to your tenn sheet." 7

  9 Q. Do you know why Jim would have said 9
                                                                              A. Polaroid.
                                                                              Q. Polaroid Corporation?
                                                                              A. I don't know whether it was Polaroid --
10 that you, Deanna and he were not in a position to i 0                 it wouldn't have been the original Polaroid
11 commit Polaroid assets? 11                                            Corporation I don't think. I think it would h.ave been
12 MR. BOYD: Object to the fonn. Lack of 12                              Polaroid Electronics, but I don't know for sure.
13 foundation. 13                                                             Q. All right. When did Mr. Petters
14 MR. JORISSEN: I will join in those
15 WITNESS: I'm guessing that his 14
16 THE
       objections. 15                 16
                                                                         acquire Polaroid, do you remember when that happened?
                                                                              A. I am going to guess 2004.
                                                                              Q. 2004. And--
                          Polaroid assets or some 17
17 term sheet included all of                                                 A. That is a guess. I'm sorry.
18 sort of thing and that Polaroid was a separate i 8                        Q. Sure. Who did you negotiate with in
19 company. I had nothing to do with. I couldn't speak i 9               connection with the acquisition ofZINK?
20 for Polaroid at alL. And nor would Deanna. And I 20                        A. There were a number of people at


22 Polaroid was. 22
21 don't know for sure what Jim's relationship with 2 i


23 BY MS. SMALLEY-FLEMING: 23
                                                                         Polaroid that I had dealings with and Tom Petters and
                                                                         some of his attorneys and so on, David Baer I guess.
                                                                              Q. Do you remember who at Polaroid you
24 Q. But Tom could commit for Polaroid? 24                              dealt with on that acquisition?
25 A. Tom owned.. is my understanding. 25                                     A. They had some attorneys, they had

                                                                                           36 (Pages 138 to 141)
                                                    Depo International, Inc.
                           (763) 591-0535 or (800) 591-9722 admin@depointernational.com
            ..                                               ..                                   ..                                                                        ..
        Case 09-04032                               Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                           Desc
                                                           Exhibit(s) 5-7 Page 37 of 38

                                                           Robert D. White, Vol. I - 7/26/2010
                                                            In re: Polaroid Corporation, et al.
                                                                    Page 142                                                                                                 Page 144 ~
      1 ROBERT D. WHITE, VOLUME I - 7/26/10 1                                                ROBERT D. WHITE, VOLUME I - 7/26/10
      2 some - I think it was Bob McKenna, I want to say. 2                             A. They were to do with the concept of
      3 There were probably six or seven people. I don't know 3                     being able to print on paper with the chemistry on the
      4 who they all were. I just don't recall their names. 4                       paper, all related to that. If you would look at and'
     5 Q. What was the business of ZINK in 2005 5
      6 at the time of           the acquisition? 6
     7 A. It was defunct. They had no business. 7
                                                                                    read a patent, it would be something that you wouldn't
                                                                                    really know what the hell it was for. I
                                                                                        Q. How about the patents to be licensed to
     8 They had shut it down. They had to lay everybody off 8                       Polaroid?
     9 because of labor laws in Massachusetts. They had 9                                    A. They would be some patents that - I
 10 to - they had gotten rid of like - started off with 10                          think there were some patents that Polaroid would
 11 maybe 500 employees and they had paired it down to 11                           exclusively use, there would be some patents we would
                            70 employees over a couple 12
 12 something on the order of                                                       jointly use and there would be some patents that ZINK
 13 of cuts, and they were getting rid of people as fast 13                         would have exclusive, and I don't recall the way the
 14 as they could with what I understood was the laws with 14                       licensing agreement went. It may be that ZINK would
 15 the state of Massachusetts. 15                                                  have nonexclusive license to use certain patents.
 16 Q. Did ZINK own any proprietary 16                                              Okay. But it wasn't a matter of ZINK licensing them
 17 technology? 17
 18 A. ZINK did not, was not a separate 18
                                                                                    to Polaroid.
                                                                                             Q. SO both parties would be able to
19 entity. It was a product concept, and there were a 19                            exploit those patents?

      project. 21
21 What was that product concept? 22
20 bunch of



22 Q.
               Polaroid employees who worked on the ZINK 20                              A. In some cases, yes, and in some cases
                                                                                    it would just be Polaroid and in some cases it would
                                                                                    be just ZINK.
23 A. This was a new way to print, where the 23                                          Q. Right What I'm tring to figure out,
24 chemistry was on the paper rather than using ink. . 24                           on the joint use, what was the nature of that
25 Q. As part of                              the did ZINK 25                                 .



                                                                    Page 14 3                                                                                              Page 145
  1              ROBERT D. WHITE, VOLUME I - 7/26/10 1                                   ROBERT D. WHITE, VOLUME I - 7/26/I0
 2        retain any patents or any IP to speak of? 2                                    A. Again, it would be something that could
 3
 4
 5
 6
 7
          Okay. 6
           n m~. 5
              A. ZINK didn't exist as part of the 3
          acquisition. I formed a new company called ZINK. 4


                 A. There was a contract drawn up between 7
                                                                                   be used not only for the printing but for other uses,
                                                                                   and Polaroid felt they could license it to someone
                                                                                   else to use those patents for some other purpose
                                                                                   because they were more general patents that maybe
                                                                                   someone unrelated to printing could use them.
                                                                                                                                                                                                       ¡
                                                                                                                                                                                                       !

 8        this new corporation and Polaroid whereby after -- if 8                       Q. What did Polaroid retain out of   that
 9        I was successful in commercially doing certain things 9                  asset class, out of these patents that you just
10        and paid the $8 milion, then I would get ownership, 10                   described?
11
12
13
          patents. 12
          ZINK would get ownership of a certain group of 11

                      There were three groups of patents that 13
                                                                                         A. I don't know what you mean.
                                                                                         Q. i think you said some patents ZINK had
                                                                                   the exclusive rights to?
14        we did, and this is part of the long, detailed 14                              A. Yes.
15        argument. Some of the patents would be owned i 5                               Q. Some were shared and then you said
16        exclusively by ZINK, some patents would be licensed i 6                  Polaroid had exclusive rights to some patents?
17        between Polaroid and ZINK, and there were some that i 7                        A. They were things that I saw no use for
18        were just owned by Polaroid. All total - i 8                             ZINK to        own.
19

                 A. Okay. 21
                 Q. Hang on. I'm tring to write this i 9                                 Q. What were they, do you remember?
20        down. Just give me a second. 20                                                A. No.
21                                                                                       Q. I'm sorr, did you repay the note, did
22                          the patents 22
                 Q. SO what was the nature of                                      ZINK repay the note?
23        that ZINK -- if it succeeded as you just described, 23                        A. When Tom was pressuring to be able to
24        what were those patents that ZINK would retain 24                        put the Polaroid name on that little printer and get
25        exclusively? 25?S.;"1.w."'i%i".M.,.'~.J
                                                                                   the benefit of some of the work that we had done with
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                                                                                                              37 (Pages 142 to 145)
                                                                  Depo International, Inc.
                                   (763) 591-0535 or (800) 591-9722 admin@depointernational.com
              ..                                                 ..                                                                 ..                                     ..
         Case 09-04032            Doc 65-2 Filed 10/01/10 Entered 10/01/10 15:58:23                                                                              Desc
                                         Exhibit(s) 5-7 Page 38 of 38

                                                   Robert D. White, VoL. I - 7/26/2010
                                                        In re: Polaroid Corporation, et al.
                                                                            Page. 146                                                                                    Page 148
     1          ROBERT D. WHITE, VOLUME I - 7/26/10                                                               1         ROBERT D. WHITE, VOLUME I - 7/26/10
     2     ZINK, we struck a deal where that $8 milion was                                                        2    the name.
     3     forgiven or that was the exchange for those rights.                                                    3         Q.     Between 2005 and 2008, I'm tring to
     4            Q.   SO the $8 million was relieved and in                                                      4    get an understanding of your role within ZINK, at all
                                                                                                                                                                                         ¡
     5     exchange Polaroid obtained the nght to put its name                                                    5    times you were chairan of the board?                              ¡

     6     on the pnnter, is that correct?                                                                        6         A. Yes.
     7            A.And they marketed it and they had their                                                       7        Q.      Were you an officer of   the company?
     8     name on it, and they could - they even got exclusive                                                   8        A.      OfZINK?
     9     right for use of it for things that would look like a                                                  9        Q.      Yes.
10         Polaroid, the original Polaroid camera. We gave them                                            10              A.      Yes.
11         a bunch of exclusivity, which Tom wanted in order to                                            11                      What was your title?                              t
                                                                                                                           Q.
12         sell Polaroid.                                                                                  12              A. Chairman of the board. I don't
13               Q.   What is this pnnter, is that the PoGo                                                13         remember.
14         pnnter?                                                                                         14              Q.      Were you president, CEO?
15              A. The PoGo printer was the one that                                                       15              A. No. I hired a different president,
16         Polaroid came out with. It was designed and developed                                           16         Wendy Caswell.                                                 ,
17         by ZINK and a company called Alps.                                                              17              Q.      And that was throughout that time
18                Q.   Alps?                                                                               18         penod, you were the chairman, correct?
19                A.  A-L-P-S. The way I developed ZINK was                                                19               A. Yes.
20         I went and made a deal with a Japanese company called                                           20               Q. And you owned -- did you eventually
21         Alps who was the leading company for manufacturing                                              21         come into ownership of    the 91 percent stake in ZINK?
22         thermal printers in the world, and rather than ZINK                                             22              A. No. It was when the acquisition was
23         take on the task of trying to develop the technology                                            23         done, Tom owned 9 percent and I owned 91 percent of
24         of a printer, I made a deal with Alps where they could                                          24         the new corporation.
25        make all of the pu.., ,,,,¡;ui,,~ and make the profit on                                         25              Q.     In 2005?
                           ..............

                                                                           Page 147                                                                                      Page 149
 1              ROBERT D. WHITE, VOLUME I - 7/26/10                                                           1            ROBERT D. WHITE, VOLUME i - 7/26/10
                                                                                                                                                                                    'J;
 2        those print engines, and they would have the right for                                              2            A.   When the transaction was done, that was             ,
 3        that, and that ZINK would sell the paper which I felt                                               3       the percentages.                                              ~
                                                                                                                                                                                    '~

 4        where the real money was.                                                                           4            Q.   Then you were to acquire the other 9                ~

 5                Q.   And Polaroid would sell what?                                                          5       percent when the note was paid off?
 6                A.   Polaroid had nothing to do with that                                                   6            A. No. When it was paid off, the hook on
 7        deal.                                                                                               7       the patents would be gone and ZINK would own those
                                                                                                                                                                                    ,¡
 8             Q.     Okay. What was exclusive to Polaroid?                                                   8       patents outright. This was a very arm's length
 9        Let me clarify that You had testified earlier that                                                  9       transaction with a lot of anger and I hired outside
10        the note was forgiven because Polaroid -- or in                                                 10          attorneys and it took about three months to negotiate
11        exchange Polaroid received the nght to use certain                                              11          the deaL.
12        ZINK technology, right, they had the exclusive right                                            12              Q.   In 2008, in September of2008, how many
13        to put their name on it, to market and sell it?                                                 13          employees did ZINK have?
14             A. Yeah. And that printer, in certain                                                      14               A.     September of 2008?
15        dimensions, it was a certain size thing that they                                              15                Q.     Yes.
16        would have the exclusive right to, the little white                                            16                A.   Let me say approximately 100, I may be
17        border like the Polaroid border, we would only do                                              17           wrong, but approximately 100 in Boston and maybe 125
18        paper. We would only do things like that for them.                                             18           in North Carolina.
19        We made a number of - there exists a contract                                                  19               Q.      What operations were taking place in
20        somewhere that spells out exactly what that was.                                               20           Boston?
21           Q.    What was the paper that ZINK was                                                      21               A.    Mostly R&D, all development work and
22        manufacturing, what was that called or what is it                                              22           also the making of the chemistry.
23        called?                                                                                        23               Q.      How about in North Carolina?
24             A.   It's ZINK paper, Z-I-N-K, standing for                                               24               A.      That was spreading the chemicals on the
25        Z, for zero, and ink, I-N-K. That is the genesis of                                            25           paper.
                                                                                      'è\"""~".
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                                                                                                                                          38 (Pages 146 to 149)
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