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1 2. Attached hereto as Exhibit 1 is the page from the appraisal relied upon by the <br /> 2 Debtor, which shows monthly income of$6,600 from tenant "Greenstone" and $2,400 per <br /> 3 month from tenant "Tabangcura" through July 2011. Ms. Litchfield has explained that <br /> 4 they were discussing leases with these possible tenants around July 2008, but no agreement <br /> 5 was ever reached. <br /> 6 3. The Debtor represented to the Colafrancescos that the value of its <br /> 7 fossil/mineral collection was $800,000. On its Schedules, the Debtor states that the value <br /> 8 of the collection is $300,000. At the 341 meeting on December 11, 2008, Ms. Litchfield <br /> 9 testified that the $800,000 value for fossils previously on its books was "overstated" and <br /> that the $300,000 figure was "a more fair and accurate accounting." The Debtor agreed to <br /> 10 <br /> provide a detailed report of its fossils and minerals collection, but has not done so. <br /> 11 <br /> Attached hereto as Exhibit 2 is a true and correct copy of the relevant portion of the 341 <br /> 12 <br /> transcript. <br /> 13 4. The Debtor was served with a 2004 subpoena issued by my office, which <br /> 14 asked for essentially all books and records of the Debtor. Mr. McKinley objected to the <br /> 15 production of any records "relating to the adversary proceeding." A true and correct copy <br /> 16 of his letter is attached hereto as Exhibit 3. In looking into the matter, I learned that Mr. <br /> 17 McKinley represents not only the Debtor, but Karyn Litchfield, in the pending adversary <br /> 18 proceeding, and that Mr. McKinley represented both the Debtor and insiders Karyn and <br /> 19 Don Litchfield in state court. I have notified the Debtor in writing that the Colafrancescos <br /> 20 object to Mr. McKinley's employment, but the Debtor has not responded. <br /> 21 I declare under penalty of perjury that the foregoing is true and correct and that this <br /> 22 declaration was executed in Sacramento, California. <br /> Dated: April 22, 2009 /s/Thomas R. Phinnev <br /> 23 Thomas R. Phinney <br /> 24 <br /> 25 <br /> 26 <br /> 27 <br /> 28 <br /> (128/00001n-"/A0075992.DOC)128/000GIrrRP/A0075902.DOC) <br /> 2 <br />