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I receivable. They are in effect false billings by the Debtor used to gain leverage over 2 creditors and tenants. 3 6. The Debtor has an extensive history of operating without paying creditors, 4 including trust fund payroll taxes and sales taxes. Payroll withholding taxes were not 5 turned over to the IRS or EDD throughout 2006, 2007 and 2008. See IRS Proof of Claim 6 No. 37, filed March 2, 2009. Sales taxes collected from customers during 2007 and 2008 7 were not paid to the Board of Equalization. See Proof of Claim 61 dated April 13, 2009. 8 There is a long list of judgment creditors and other creditors on Schedules D and F 9 incurred during this same period, as also described in the Debtor's April 2, 2009 Disclosure Statement 10 7. The Debtor's SFA, paragraph 23, discloses that Don Litchfield took 11 (untaxed) "draws" of $72,801.95 during the one year prepetition. Postpetition, Karyn 12 Litchfield has been taking "draws" from Copperford at the rate of approximately $2,000 13 per month. There is no authority for Copperford making postpetition "draws" or 14 distributions to its owners. The apparent reason for categorizing the payments as draws 15 instead of wages is to improperly continue the prepetition pattern of failing to pay required 16 taxes. 17 8. On April 14, 2009, the Debtor filed Amended Schedules in order to, among is other things, amend Schedule E to claim "unpaid wages" in favor of Donald Litchfield of 19 $190,666.50 ($10,950 priority) and in favor of Karyn Litchfield of$160,666.50 ($10,950 20 priority). The fact that six months into the case the Debtor is now seeking to interpose 21 large creditor claims in favor of its owners shows, at best, gross mismanagement. 22 9. Under SFA paragraph 14 ("all property owned by another person that the 23 debtor holds or controls"), the Debtor discloses only four tanks held for Stama Winery, and 1 tank held for Wallace McCoy. By Amended Schedules dated April 14, 2009 (filed six 24 months into the case), the Debtor now discloses under SFA paragraph 14 barrels, racks, 2s bottles, corks, capsules, labels, unbottled bulk wine and bottled wine held for 19 different 26 third parties, valued at$1,396,008 retail, and$716,000 wholesale. 27 10. The Debtor's failure to disclose extensive assets held for third parties is at 28 best gross mismanagement. The real purpose of the strategy, as shown below, was to 12aro0001maPiA0025902.00C1 3