Plaintiffs’ Committee Statement

Here is a report from our attorney, Don Willner:

“During the year 2006 each shareholder received from FDIC or your own stockbroker $4.02 per share. You turned in your Benj. Franklin stock certificate and received a new certificate. The Benj. Franklin Corporation continues in existence in FDI receivership. Some money has also been held back by the FDIC to cover our pending claim for the return of interest on the shareholder contributions, three pending claims for attorneys’ fees, and an amount to cover corporate taxes for years since the tax settlement. It is probable that FDIC will have some money left over which needs to be distributed to the shareholders. In addition, we will have a Claims Court judgment for $52 million. The government will appeal seeking to reduce or eliminate this amount and we will seek to increase or retain this amount. The appeal process will take about two years and hopefully it will result in substantially more money for the shareholders, but nothing is certain in litigation.

In early 2007, you will receive from the FDIC or your stockbroker a form 1099 which should have a check mark in Box 8 “cash liquidation distribution.”

Each of you needs to consult your own tax preparer to determine the tax treatment of the shareholder distribution that you have received from FDIC or your stockbroker. (This isn’t the money that I have returned to the 4200 contributors.) I am not giving you tax advice in this report. Each of your situations may be different. All I am providing is some information which may be of help to your own tax preparer.

I have consulted with the FDIC. In addition, Senator Ron Wyden of Oregon has put me in touch with nation IRS officials. They are not providing tax advice either, but I did receive useful “information.”

Your tax preparer will need to know how much you paid for your Benj. Franklin stock and when you purchased it. He or she will also want to compare these dollar amounts with the dollar amounts that you received in the shareholder distribution. Your tax preparer will need to determine whether the money can be treated as capital gains (which are usually taxed at a lower rate than ordinary income) or ordinary income.

If later money distributions come to you as discussed earlier in this report, your tax preparer will have to consider how this later money should be treated.

Some of you may have previously written off your Benj. Franklin stock as worthless, and taken a tax deduction. If you fit into this category, your tax preparer will need this information.

Your tax preparer may also want to consider the impact of other events of your income or loss in determining how to treat this Benj. Franklin partial liquidation.

Your tax preparer may want to review 26 United State Code Section 331 and Revenue Rulings 85-48 and 90-13 as well as other sources of information.”

 

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

Plaintiffs’ Committee Statement

Here is a report from our attorney, Don Willner:

“On Tuesday, December 12^th, Judge Smith entered the following Order:

Upon Motion to Substitute Counsel filed by C. Robert Suess, and having considered all memoranda of law filed in connection with such Motion, and argument of counsel, such Motion is Granted. It is hereby ORDERED that Thomas M. Buchanan of the law firm of Winston & Strawn LLP will be lead counsel and attorney of record for the appeal of this case, and any remand proceeding

Pursuant to agreement of all the named plaintiffs, and in the absence of any objection by the government, Rosemary Stewart of Spriggs & Hollingsworth, Don S. Willner of Willner & Associates, and Eric W. Bloom and Charles B. Klein of Winston & Strawn LLP will be Of Counsel, respectively. All of the identified attorneys will work together in a collaborative manner, with the specific roles of the Of Counsel attorneys to be determined by lead counsel.

Then on Wednesday, December 13^th, Judge Smith entered a 10-page Opinion and Order in connection with the pending motions for reconsideration. The key points are:

1. Our Claims Court judgment has been increased from $34,672,500 to $52,008,750. Previously Judge Smith had awarded the market value of Benj. on the day before passages of FIRRGA (the statute which retroactively removed the capital asset of goodwill). Now in the portion of our reconsideration motion which I argued, he added a change of control premium of 50% of the original award.
    
2.  He rejected the government’s motion that the money distributed to the shareholders from the tax settlement should offset the Claims Court judgment, on a theory of “double dipping.” Here the winning arguments were made by my co-counsel Rosemary Stewart and FDIC counsel Ashby Doherty.
    
3. Then he ruled that we could add to our judgment the amount of taxes expected to be paid on the Damages Award but not the taxes incurred while Benj. is in receivership.

Now we have to finalize the form of the Claims Court judgment and then the appeals will start.”

I also have been talking to key SEC officials seeking help in reinstating the stock of shareholders whose stock was written off by stockbrokers and talking to key FDIC and IRS officials about procedures to be followed by your tax preparers in seeking the best possible tax treatment of the money you have received.

 

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

Plaintiffs’ Committee Statement

Here is a report from our attorney, Don Willner:

My co-counsel, Rosemary Stewart has just won her third straight appeal (three out of three!) from the Claims Court to the Federal Circuit Court of Appeals in “Winstar” (savings and loan) cases which have similarities with the Benj. Franklin case. It is good to have Rosemary on our team.

This is the progress made on my November 21^st trip to Washington, D.C. Plaintiff Richard Green, now living in Virginia, accompanied me on my rounds.

First we called upon the FDIC to discuss the 1099 tax form which they and the brokers will be sending out to shareholders early next year about the partial distribution made by FDIC a few months ago. We are, of course, trying to make any money you received which is less than the price at which you purchased your stock to be non-taxable. I will have a further report in a few weeks.

Then we went to the Federal District Court Status Conference with Judge Sullivan on pending cases. Rosemary Stewart reported that we will soon file a motion for Summary Judgment in our favor which would grant interest on the shareholders contributions which I have previously returned to you. Rosemary is doing most of the work on this matter with my help. We will say, among many arguments, that FDIC has paid itself interest as a creditor of the Benj. Franklin Receivership and has paid interest to other creditors and to depositors so it is only fair that interest be paid to the shareholders who contributed to the Litigation Fund.

Judge Sullivan also held a Status Conference on various claims for attorney fees including mine.

In the afternoon, we met with a key staff member of U.S. Senator Gordon Smith of Oregon discussing possible Securities and Exchange Commission action to help shareholders whose Benj. Franklin stock was written off by your stockbrokers. I have written to the chairman of the SEC discussing examples of what has been done to many of you who have written to our website.

IF YOUR STOCKBROKER WROTE OFF YOUR BENJ. FRANKLIN STOCK WITHOUT YOUR KNOWLEDGE OR PERMISSION, PLEASE WRITE THIS WEBSITE NOW WITH FULL DETAILS. The more cases we can present, the better the chance of SEC help.

 

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is a report from our attorney, Don Willner:

Tuesday, November 21st I will be back in Washington, D.C. with a full day working on Benj. Franklin matters. I am meeting with the FDIC to discuss the tax forms each of you will be receiving covering the partial shareholder distribution. Our goal, of course, is to help you reduce or remove taxation of the money you are receiving from FDIC.

Then, Senator Gordon Smith of Oregon is trying to arrange a meeting for me with a staff member of the Securities and Exchange Commission. I have previously written to the SEC asking for their help getting Benj. Franklin shares reinstated by stock brokers who may have written them as worthless many years ago.

There is a Status Conference with Federal Judge Sullivan at noon on November 21st, which will discuss my lawsuit seeking to have the FDIC pay interest on the shareholder contributions. Since I am the plaintiff as trustee of the Litigation Fund, the attorney of record is my co-counsel Rosemary Stewart. She will soon be filing, with my help, a Motion for Summary judgment in our favor.

Judge Sullivan will also be holding a Status Conference on the three attorney fee petitions.

I will provide a full report next week.

There is still no decision by Judge Smith on the pending Motions for Reconsideration of the Claims Court judgment and on the Motion to Remove me as attorney of record.

If you have not redeemed your partial distribution, please visit the FDIC website http://www.fdic.gov/bank/individual/failed/franklin.html or call Ben Burke in the Claims Department of FDIC at 972.761.2579 to find out how to redeem your shares.

 

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is a report from our attorney, Don Willner:

For heirs of deceased shareholders who have contributed to the Litigation Fund, I have developed a simple system of an Affidavit of Heirship and in some cases I may need supporting documents. We then send the check in the name of the proper heir or heirs. This is more work for us but it gets the money to the proper person.

The FDIC, instead, is making their checks out to the deceased shareholder, which requires you as the heir to prove your right to the money. You should discuss this issue about the checks being made out to the deceased shareholder with your bank, or with your private attorney to see what can be done. Or, call Ben Burke at FDIC (972.761.2579 or toll-free 877.872.1685). We are disappointed that the FDIC is taking this approach.

We have received questions about whether the FDIC distributions are taxable, and if so, are they a return of capital, a dividend, or something else. This may vary from person to person, and I suggest you discuss this with your own tax advisor. Please make sure that your tax advisor understands that there is a good chance of further distribution in the future, depending upon the success of the work that we are now doing.

I am also working on the problem of how to deal with the situation where stockbrokers wrote off your stock years ago, often without your knowledge or permission. I hope to have a report on this matter soon.

The status conference on my law suit in the Federal district court in Washington DC to obtain interest on the shareholder contributions will take place on November 21st in Washington, DC. Co-counsel Rosemary Stewart and I will be there. I will have more to report on this matter after November 21st.

For specific information on how to redeem your partial distribution, please visit the FDIC website http://www.fdic.gov/bank/individual/failed/franklin.html or call Ben Burke in the Claims Department of FDIC at the number listed above.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is the result of important good work by our attorney, Don Willner and his team:

Benj. Franklin stock is again trading through brokers and the brokers'
clearing house.

First, FDIC wanted the shareholders to turn in your stock certificates
before receiving the partial distribution of $4.02 per share. Without a
stock certificate you could not sell or buy Benj. Franklin stock and the value
of the stock was essentially fixed at $4.02 per share, even though it
had been trading at a higher price.

This could have caused tax consequences. A group of us convinced
the FDIC to change their mind and allow the stock to be traded.

FDIC then returned a new stock certificate (or your old one with
a new CUSIP number stamped on it) to you or your broker, and created
a new trading symbol, BFSL, instead of the old trading symbol of BENJ.
But this still did not solve the problem because BFSL was given a different
trading symbol than BENJ.

Finally, FDIC has now given BFSL and BENJ the same trading symbol
so the stock can be bought or sold, if that is your wish.

This process took about six weeks, but FDIC has finally done the right
thing and we appreciate it.

Plaintiffs Committee

Please note:

For specific information on how to redeem your partial distribution, please
visit the FDIC website http://www.fdic.gov/bank/individual/failed/franklin.html
or call Ben Burke in the Claims Department of FDIC. His phone number
is 972-761-2579 or toll-free at 877-872-1685.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

This is some important and welcome news from our attorney, Don Willner:

As many of you now know, FDIC is making a partial distribution of the value of your Benj. Franklin shares. I now recommend you send FDIC your stock certificates along with the other information that the FDIC has requested so you can receive the partial distribution.

Just to clarify, when you send in your stock certificates (and the appropriate FDIC forms), the FDIC is distributing $4.02 per share and they are returning your certificates stamped with a new CUSIP number and a new ticker symbol BFSL (BENJ. is no longer traded on NASDAQ). Your returned certificates (with the new CUSIP number) will still hold value, since Benj. is still under litigation.

For specific information on how to redeem your partial distribution, please visit the FDIC website http://www.fdic.gov/bank/individual/failed/franklin.html. We are now receiving hundreds of calls about the FDIC distribution, which should properly go to Ben Burke of FDIC. His phone number is 972.761.2579 or toll-free at 877.872.1685. Along with returning your certificates, you will need to fill out two simple forms (a Letter of Transmittal and a Substitute Form W-9). If your stock certificates are lost, missing or destroyed, you will need to fill out a third form to the best of your knowledge (an Affidavit of Lost, Missing or Destroyed Certificates) also provided by FDIC.

If your shares are held with a brokerage firm this transaction should have already taken place. Your statement should reflect a payment to you of $4.02 per share and new ownership in BFSL. If it does not, contact your brokerage firm directly.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

This is a report from our attorney, Don Willner:

The FDIC has now advised me that all stock certificates sent to them by shareholders will be identified in some appropriate way and returned to the shareholders.

This is very important good news. Some of you have been holding back sending FDIC your stock certificates until FDIC promised to return them to you. I now recommend that you send FDIC your stock certificates along with the other information they have requested so you can receive your partial money distribution and the return of your stock certificates.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

This is a report from our Attorney, Don Willner:

The new Symbol for Benj. Franklin is BFSL and it will appear on today's daily list for trading. This is good news.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is some important and welcome news from our attorney, Don Willner:

“For the past month, a major Benj. shareholder, a plaintiff, and I have been working very hard to persuade the FDIC to change its mind and allow Benj. Franklin stock again to be freely traded by the shareholders. The FDIC has now agreed and we greatly appreciate their willingness to be of help. The various stockbroker organizations have also agreed. The final details will be soon announced by FDIC and will be reported to you on this website.

The shareholders will be allowed to trade their shares on the “pink sheets on the unsolicited quote basis.” It may end up being a different trading symbol other the “Benj” for stock trading. Also it is possible that stock certificates previously requested by FDIC will be identified in some manner and returned to you.

This will mean that your certificates will again be of value which will be reflected in your broker’s statement. We should know more details soon. This is all that we know now.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is a report from our attorney, Don Willner:

1. Motions for Reconsideration
   
   On August 23rd, we argued against the government’s motion to offset the money you have received from FDIC against the Claims Court judgment. We then argued for our motions to increase the amount of the Claims Court judgment by (a) adding $50 million paid by FDIC on taxes; (b) adding approximately $17 million for the value of the control premium paid by Bank of America for Benj. Franklin’s deposit base; (c) adding approximately $7 million representing the decrease in the equity value of Benj. Franklin from the time in 1989 that then President Bush first proposed the FIRREA legislation which caused the failure of Benj. Franklin until the date upon which FIRREA passed. We are hopeful that we will increase the award. None of these motions have been decided.
    

2. Motion to Remove Don S. Willner as Attorney of Record
   
   This was also argued on August 23rd – the motion to remove Don S. Willner as attorney of record. At Judge Smith’s request, we are now in mediation. This motion has not been decided.
    

3. Benj. Franklin Stock
   
   The FDIC has delisted Benj. Franklin stock from further trading and we are trying to get them to change their mind. Shareholders who wish to be heard on this subject by the FDIC should send an e-mail to dgearin@FDIC.gov.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is a report from our attorney, Don Willner:

“On August 23, 2006 at 11am eastern daylight time, Senior Judge Loren Smith of the U.S. Court of Federal Claims will hear argument upon our motion to increase the $35 million judgment, the government’s motion to decrease the $35 million judgment, and Bob Suess’ motion to remove me as attorney of record.

The majority of the plaintiff’s oppose Mr. Suess’ motion. Our side will be represented by Rosemary Stewart, Kelby Fletcher, and myself. I believe I have done a good job as your attorney of record for the past 16 years and want to continue until we achieve ultimate victory.

1. I and my colleagues disagree with the decision of FDIC to close trading in Benj. Franklin stock, to require you to turn in your Benj. Franklin stock certificates and to substitute for the Benj. stock certificates FDIC certificates of ownership which FDIC believes will be accepted by stockbrokers for assignment of ownership.

I am now negotiating with FDIC about these matters on your behalf and am getting good advice from knowledgeable shareholders.

2. We have been receiving many questions about why FDIC is only distributing $31 million out of the $44 million in the receivership.

a) $3.2 million has been sent to me as Trustee of the Benj. Franklin Shareholders Litigation Fund, and has been returned by me to the contributors to the fund. (There are a few contributors who have not yet received their money due to problems of change of address or proof of ownership which we are working hard to resolve.)

b) As trustee of the fund, I have sued the FDIC to pay interest on contributions and FDIC is reserving money to pay the interest if I win the suit. This amount has not yet been computed but could be between $2 million and $3 million. The status conference on this suit will be heard by Judge Emmet Sullivan of the U.S. District Court for the District of Columbia on October 12, 2006.

c) Three claims for attorneys fees have been filed with the District of Columbia District Court which to my surprise total $4.3 million. FDIC is holding this amount in reserves. The fees sought by Don S. Willner and Associates, P.C. (my law firm) are the lowest of the three, even though I have been lead counsel on the tax settlement. Judge Sullivan will decide the total amount to be awarded to each applicant.

Subtract these amounts from the $44 million and it comes to $33.5 million. FDIC also has relatively small amounts of corporate tax to pay, and apparently wants to keep a reserve for contingencies.

Peter Baker
Richard Green
Donald McIntyre
Leo Sherry

From the Plaintiffs’ Committee

Here is a report from our attorney, Don Willner:

“Today the FDIC is starting the partial distribution of the shareholder money. You can get further information from the FDIC website:

http://www.fdic.gov/bank/individual/failed/franklin.html”

Peter Baker
Richard Green
Donald Mc Intyre
Leo Sherry

From the Plaintiffs' Committee

Here is a report from our attorney, Don Willner:

“After many discussions with FDIC, I am pleased to be able to report that the partial distribution to shareholders will start within a week. Most of the shares are now held in the name of stockbrokers. A huge check will be sent by FDIC to the brokers’ clearinghouse for distribution to the brokers who will then add those amounts to your account. This is the same procedure needed for the distributing of dividends.

The shareholders who have their own stock certificates will have to send those original certificates to the FDIC or other satisfactory evidence of ownership. FDIC will mail from their office in Texas detailed instructions to you, which may take a few days to arrive by mail.

In the meantime, once the Board of FDIC OK’s the start of the process, FDIC will phone me with instructions on how to set up on our website a link to the FDIC website which will contain those same instructions.

We have waited 16 years, and I have previously returned the shareholder contributions, but you will soon have the first partial distribution on your stock from the FDIC receivership. We hope to add more money when the Claims Court appeal process in completed!

Peter Baker
Richard Green
Donald Mc Intyre
Leo Sherry

From the Plaintiffs' Committee

In our previous website report, we briefly reported the fact that Bob Suess had filed a motion to remove Don Willner as our attorney. The active plaintiffs (identified below) reiterate their support for Don Willner, who has been our attorney of record since the case began in 1990 and who has thus far been successful in each stage of this lawsuit.

We have just learned that Bob Suess has sent a new letter to all shareholders, which is factually incorrect. In the spring of 2002, the other plaintiffs jointly removed Mr. Suess from managing the Claims Court case because of erratic behavior on the part of Mr. Suess, which the other plaintiffs believed to be prejudicial to the case and to jeopardize the best interests of the Benj. Franklin shareholders.

Neither Mr. Suess nor his counsel Mr. Buchanan has been involved in the Claims Court case for over four years. The Plaintiffs' Committee (on which Mr. Suess declined to serve) has managed the case, and Don Willner and his Washington, D.C. co-counsel Rosemary Stewart have prepared all of the briefs and made all of the arguments to the Claims Court in that same four-year period of time. It is unfortunate that Bob Suess has chosen this time to vent his frustration at no longer being manager of our case. It has delayed the hearing of the pending motions for reconsideration, but we hope it will not deter other progress in the case.

Peter Baker
Richard Green
Donald Mc Intyre
Leo Sherry

A report from our attorney, Don Willner:

The FDIC hopes to start the shareholder distribution in late July or early August.  I and the independent CPA who has been helping me with the return of the contributions, are working with FDIC to get the most accurate shareholder list.  Contrary to the FDIC's earlier thoughts FDIC will be distributing through the stock brokers clearing house to those of you who have your stock held by brokers.

I appreciate the large number of contributors to the Litigation Fund who are returning 10% of their contribution check to be used for needed work in the Claims Court and on appeal.  We will be seeking approval to reimburse the new contributions if we are successful in the Court of Appeals.  

Plaintiffs Committee Statement

Many of you who received the contributor refund have returned 10% for future expenses, but many have not.  Expenses continue.  We will have a hearing in the Claims Court next month seeking an increase in the damage award.  We also are preparing for the possibility of an appeal. 

Please send your check in now to: 

Benj. Franklin Shareholders Litigation Fund
c/o Don S. Willner, Trustee
1415 American Bank Building 
621 S. W. Morrison Street
Portland, Oregon 97205

Don Willner, and his Washington D. C. co-counsel Rosemary Stewart, were scheduled to argue the motions for reconsideration in Washington, D. C. on July 19, 2006.  One of the original plaintiffs, Bob Suess, has recently filed a motion in the Claims Court to remove Don Willner as the attorney of record on the grounds that Don has not been carrying out "his wishes".  All of the other participating plaintiffs oppose the motion and want Don to continue as our attorney.

The result of Mr. Suess' action is that the hearing on the motions for reconsideration in which we are seeking to increase the Claims Court damage award will be delayed until August 23, 2006.  At that same time Mr. Suess' motion to remove Don Willner as attorney will also be heard by the Judge.

Peter Baker
Richard Green
Donald Mc Intyre
Leo Sherry

A report from our attorney, Don Willner

These are busy times.

1.   With the help of independent CPA Jerry Young, I have sent refunds of shareholders' contributions to 4200 contributors.  In those cases where the shareholder has died, I am working out a simple system to make sure that the correct heir receives the money without the necessity of a probate.

2.  The Plaintiffs Committee has asked those who are receiving refund checks to return 10 percent for outstanding bills for the Claims Court work and the costs of the appeal.  Many hundred checks are coming in.

3.  Our final brief in the Claims Court is due on July 6th and I and my co-counsel, Rosemary Stewart are busy researching and writing. July 19th is the date of the final Claims Court hearing in Washington, D.C. We are trying to increase the amount of the Claims Court Judgment, then comes the appeal.

4.  We believe we have convinced the FDIC to use the stockbrokers to handle the forthcoming partial distribution to those shareholders who have placed their stock with their broker to hold for them.  This should change the letters that the FDIC sent to many of you asking you to contact your to get necessary documentation and then resending that information to the FDIC.

5.  There is another problem. Some brokers wrote off you stock years ago as worthless, which we now know is incorrect. Some of you requested your broker to reinstate the position and they have refused. If this has happened to you, please email a message to this website with full details including a photo of the last statement. My plan is to collect this information and then seek to have a proper agency write to the brokers. We need to hear from you soon.

6.  Many of you have recently sent me kind comments about my work for you over these 16 years, which I deeply appreciate. Please forgive me for not responding to you individually.

PLAINTIFFS COMMITTEE STATEMENT

This case to date has been funded by 4200 shareholders to the Benj. Franklin Shareholders Litigation Fund, and amounts have now been repaid.  Don Willner says in his report that hundreds of you now sent back 10 percent of you check to pay recent bills for the Claims Court litigation and finance the appeal.  Would those of you who have not yet sent back 10 percent of your check please do so now.

On the other hand, many shareholders, especially those who purchased their stock recently, have not contributed to the BFSLF.  It is not fair for you to receive the benefits from this case without sharing the burdens.  Most of the existing contributors put in 25 cents per share.  Would those of you who have not contributed please send your check in now to:

Benj. Franklin Shareholders Litigation Fund

c/o Don S. Willner, Trustee

1415 American Bank Building

621 S.W. Morrison Street

Portland, Oregon 97205

Thank you for your help in our common effort.

                                                                Plaintiffs Committee

A report from our attorney, Don Willner

We recently filed a motion to increase the amount of our $35 million Claims Court Judgment based upon newly decided favorable court cases. At a status conference with Senior Judge Smith on May 23^rd, he expressed great interest in our new motion. He set a schedule for filing final briefs and then oral argument on the damages award on July 19, 2006.

A report from our attorney, Don Willner:

I am cooperating with the FDIC-Receiver in our efforts to make sure that we have correct addresses for all shareholders.  The Benj. Franklin Shareholder Litigation Fund will soon be receiving a wire transfer from FDIC for the total amount contributed to that Fund, and as the Fund’s Trustee, I will promptly distribute the entire amount received back to the shareholders who contributed money to the Fund.  This will include contributors who have sold their Benj. Franklin stock.  (Please note that the FDIC has advised us that shareholders who have sold their stock will likely not be entitled to FDIC’s later distribution of the surplus in the Receivership, which FDIC will pay to current shareholders.)

After the Fairness Hearing on May 2, 2006, Federal Judge Sullivan entered an order making me the custodian of the original shareholder response forms sent to the Court by hundreds of Benj. Franklin shareholders.  I now have these records and am gratified that so many people responded to advise the Court of their views and to provide their current names and addresses.  Both the FDIC and I are incorporating this new information into our shareholder lists.

If any shareholder did not send the response form to the Court but does have a different address than you did in 1990 (or different from the last time you wrote to me), please call or write as soon as possible to:

Ben Burke, Claims Department

Federal Deposit Insurance Corporation

1910 Pacific Avenue

Dallas, Texas 75201 

Telephone:  (972) 761-2579

Mr. Burke will be sharing all new information that he receives with me, and I will do the same with him.

A report from our attorney, Don Willner:

Hopefully, everyone knows from our website reports of last week that the U.S. District Court in Washington, D.C. approved the tax settlement between the Benj. Franklin receivership and the IRS. This means that current Benj. Franklin shareholders will be getting a cash distribution from the FDIC Receiver within the next few months, representing the first distribution of surplus funds remaining in the receivership.

Getting the tax settlement approved also means that several other exciting things will be happening in our continuing legal efforts on behalf of Benj. Franklin shareholders:

1. For shareholders who contributed money to the Benj. Franklin Shareholders Litigation Fund, the FDIC Receiver has agreed to reimburse the approximately $3 million of total contributions to the Fund, which I (as the Fund’s Trustee) will immediately distribute back to the contributing shareholders. This distribution to contributing shareholders is separate from (and in addition to) the FDIC’s later distribution of surplus and it should come sooner as FDIC estimates that it will reimburse the Litigation Fund in the next few weeks. 

2. In my claim to the FDIC for the reimbursement of the Litigation Fund contributions, I sought interest on the contributed amounts and submitted legal memoranda explaining why interest should also be paid. If FDIC does not approve interest on the contributed funds, we will promptly appeal that ruling to the Federal Court. Fortunately, the FDIC has agreed that such an appeal will not delay reimbursement of the $3 million principal amount of the contributions.

3. The day after the tax settlement was approved by Federal Judge Sullivan, we filed a new motion in the U.S. Court of Federal Claims (the “Claims Court”) seeking to increase substantially the damage award made to us based on new Court decisions in other Winstar-related cases. You will recall that the Claims Court tentatively granted a $35 million damage award to us in 2002, but then placed the case on hold due to the pending tax claim. 

4. We will renew our efforts to get the hold lifted from the Claims Court case and to get a final judgment issued. Both by pressing our new motion and by seeking oral argument on old motions, we hope to persuade Senior Judge Smith to increase and finalize his rulings in the next few months. 

5. The FDIC has not yet decided the amount of legal fees and expenses it will pay for the several shareholders’ attorneys and consultants who were involved in successfully reducing the IRS tax claim from $1.2 billion to $50 million. Under federal statute, any attorney who is unhappy with the FDIC’s decision about an attorney’s fee claim may appeal to Federal Court. There has been a lot of misleading information circulated about my attorney fee claim. The rate of payment I am seeking for my fee claim as lead counsel in this Washington, D.C. case is identical to the highest rate of payment sought by a Washington, D.C. attorney working on the same tax settlement. 

6. Irrespective of the final amount of damages awarded by the Claims Court, we are aware that the U.S. Department of Justice will appeal any contract liability and any damages findings issued in favor of Benj. Franklin and its shareholders. We must defend against the government’s arguments that there were no enforceable contracts and that, even if there were contracts, Benj. Franklin was not damaged by the government’s breach of the contracts.

7. We likewise intend to cross-appeal that the amount of damages awarded to plaintiffs by the Claims Court was too low. While many Winstar-related cases have resulted in small or no damage awards at all, we continue to believe that the facts related to Benj. Franklin are unique in several respects, which will be stressed in our cross-appeal. This appellate work will all be before the U.S. Court of Appeals for the Federal Circuit in Washington, D.C.

8. Your Plaintiffs’ Committee has selected a team of experienced and extremely well qualified counsel to work with me on the appeal. Rosemary Stewart is a partner at Spriggs & Hollingsworth in Washington, D.C. and Jerry Stouck is a partner at Greenberg Trauig in Washington, D.C. Both have worked on and won other Winstar-related cases and appeals, as well as numerous other lawsuits against the government in federal courts around the country. Before entering private practice in 1990 Rosemary Stewart was Director of Enforcement for the Federal Home Loan Bank Board. Jerry Stouck is a frequent lecturer to Judges and lawyers at Federal Circuit Court annual conferences. I have argued and won appeals in the U.S. Supreme Court and the Federal Courts of Appeal for the 9th Circuit (San Francisco) and 10th Circuit (Kansas City). Of course, I also have the greatest knowledge of the facts of our case based on my 16 years of work as sole attorney of record in the Claims Court litigation. 

9. Ms. Stewart, Mr. Stouck, and I estimate that the cost of the appeal (both defending against the government and pressing our own appeal) will be approximately $300,000.This is low based in part on my knowledge of the facts of our case. Debts already owed to attorneys and consultants including costs for unpaid work on pending Claims Court motions and for the new work necessary to finalize the Claims Court judgment are estimated to be another $100,000. A budget for this remaining work is being prepared and will be placed on a later website report. 

10. As “follow-up work” related to the tax settlement, we are now working closely with the FDIC to expedite getting the surplus checks out to shareholders. Among the many issues we have been addressing with the FDIC are lost certificates, brokers who may have “written off” Benj. Franklin stock as worthless and should reinstate the stock, and the proof that will be required for individuals who inherited their shares of Benj. Franklin. We are also preparing an argument to the FDIC that its distributions to shareholders should be designated as dividends rather than ordinary income, which should decrease shareholder taxes. This decision is, of course, made by the IRS, not by FDIC but we are doing what we can to be helpful to shareholders on this issue. 

11. In order to assist both myself and your hard-working Plaintiffs’ Committee in carrying out the remaining tasks before us, we have created a Benj. Franklin Shareholders Advisory Committee comprised of the following individuals:

Dr. G. Dale Weight of Portland, Oregon, formerly CEO, President and Chairman of the Board of Benj. Franklin.

Dr. John Byrne of Corvallis, Oregon, President Emeritus of Oregon State University, former Administrator of the National Oceanic and Atmospheric Administration and Board member of Benj. Franklin.

April Smith of Mystic, Connecticut, President of April Smith and Associates, Inc., a mortgage due diligence company and former Benj. Franklin officer.

Dale C. Bottom of Oak Bridge, Illinois, formerly President of the Institute of Financial Education, an affiliate of the U.S. Savings and Loan League.

Barbara Gibbs of Portland, Oregon, Vice President of Seattle-Northwest Securities Corporation and former Assistant Treasurer of Benj. Franklin.

Mike Thorne of Pendleton, Oregon, rancher, former Chair of the Oregon State Legislative Ways and Means Committee, former director of the Port of Portland, and former Benj. Franklin Board member.

Kirk Ewart of Boise, Idaho, former Director of Industrial Relations of Boise-Cascade Corporation and Board Member of Benj. Franklin.

We are pleased to have these people on our Advisory Board and all immediately accepted.

In closing, your attorneys are continuing to work successfully on your behalf.

Plaintiffs’ Committee Statement:

The success of our attorneys in the tax matter reminds us of the work still to be done. You will be asked to participate in our appeal very soon. Now it is our responsibility to finish what we started. Please help when you are asked.

A report from our attorney, Don Willner:

A Message from the Plaintiffs:

The Tax Issue is Settled!

Shareholders get their day in court

Yesterday, May 2, 2006 was a momentous day – a day which Benj shareholders have waited for 16 years. The Honorable Emmet G. Sullivan presided at the United States District Court for the District of Columbia fairness hearing and ruled in favor of the settlement order negotiated between the United States of America and the Federal Deposit Insurance Corporation (FDIC).

The order, which settles the tax claim issue with the US Department of Justice, directs a payment of $50 million for alleged taxes from 1990 through 2002. This is a substantial victory for the shareholders allowing the FDIC to distribute funds held in the receivership - first to Benj Shareholders Litigation Fund contributors and later to shareholders of record.

Judge Sullivan considered written comments from shareholders and through the technology of video conferencing, the live comments from attendees in Portland, Oregon. The Court went to great lengths to include the Portland attendees. The voice and image of our shareholders were heard and seen – all the way to Washington DC. Several plaintiffs and shareholders also spoke in support of the settlement from inside the Washington DC courtroom. Shareholder support for the settlement was overwhelming - more than 99% percent of the submitted respondents supported the settlement.

The Judge spoke very favorably of the settlement process. He had high praise for the negotiations indicating that he could not recall a case like this one, where a disinterested third party was not necessary to help bring resolution.

The Judge also suggested on more than one occasion, that had this settlement not been successful, it would have likely labored in the court system for many years to come, with no clear end in site.

The Plaintiffs wish to extend our heartfelt congratulations to each shareholder and Fund contributor. The success we achieved would not be possible without your support. We especially wish to thank those that took the time and expense to be a part of the hearing, both in Washington DC and Portland, Oregon. It was very valuable for the Court to see the real people affected by this case.

On behalf of the all the shareholders, the Plaintiffs wish to acknowledge the exemplary work of our legal council. The efforts of Don Willner and his team have proved beyond a shadow of doubt that our confidence in their hard work, integrity and legal expertise is well placed.

A report from our attorney, Don Willner:

A report from our attorney, Don Willner:

 A report from our attorney, Don Willner:

1. COURT ORDER

2. NOTICE TO SHAREHOLDERS

A report from our attorney, Don Willner:

A report from our attorney, Don Willner:

A report from our attorney, Don Willner:

A report from our attorney, Don Willner:

TO ALL SHAREHOLDERS OF BENJ. FRANKLIN FEDERAL SAVINGS AND LOAN OF PORTLAND, OREGON:

Shareholders should do everything possible to get paperwork in order so that, assuming final approvals and a relatively early partial distribution to the shareholders, everything will proceed smoothly. There were originally about 6,500 shareholders. Some of the shareholders have died and we need to know who now owns the stock. Many of you have moved without forwarding addresses, please make sure that we have your correct address. Others have sold the stock and we urgently need the names of the current owners, addresses, from whom they bought their stock and the number of shares. FDIC is leaning heavily upon us to help make the database current and complete, but we can only do this with your help.  

Please make sure you have done the following:  

1) Provide us with your name, current address, and the number of shares you hold (if you have not already done so). At the request of FDIC, we have forwarded them a copy of the data base, but will be periodically updating it with corrections we receive from you.

Send your email message to: Information@benfranklinoregon.org

2) Find your stock certificate. If you cannot find it, try to find whatever other evidence is available that indicates you own stock.

3) If the owner of the stock has died, the stock has to be legally transferred to children or heirs.  If this has been done, send us copies (not the originals) of the court documents which make the transfer, along with your name, address, and number of shares.  If this has not already been done, please contact your own personal attorney immediately, and ask for his or her help. Or, if your stock is held in “street name” by a broker, contact your broker and make sure the broker responds to our request for the name in which the stock is held (usually the broker’s) plus your name as the beneficial owner of the stock, plus the address to which we should correspond, and the number of shares.

4) When the RTC closed Benj. Franklin, they also terminated the transfer agent. However, there have been many electronic transactions in our stock since that date. Because of that, we have no record of those who bought stock since then. We are asking each of you to call your stock broker and ask whom we may contact at his or her firm, in order that we may be able to make ALL Benj. Franklin shareholders aware of this website. We understand the privacy laws and ask only that the broker provide clients with the website address. We will cooperate with the broker firm in any way we can and will respect client privacy. This website is the only way we can communicate with each of you. Please help us reach more of our new shareholders.