REWALD TRUSTEE ACCUSED OF COERCION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100690080-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: August 10, 2010
• Sequence Number: 80
• Publication Date: October 18, 1983
• Content Type: OPEN SOURCE

Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
Rewald Trustee Accused of Coercion
By Lee Catterall
Star-Bulletin Writer
Ronald Rewald's civil attorney
today accused the trustee of Re-
wald's bankrupt investment firm
of "coercion" in seeking an agree-
ment from Rewald to drop any
claims to his personal property in
exchange for a $50,000 payment
to Rewald's wife Nancy.
Rewald attorney Robert Smith
said Rewald would agree to drop
those claims for $300,000, but that
offer has been rejected by bank-
ruptcy trustee Reynaldo Graulty.
Graulty was not immediately
available for comment today.
Rewald is being held in state
prison in lieu of $10 million bail
while awaiting trial on two felony
theft charges stemming from his
activities with the firm of Bishop,
Baldwin, Rewald, Dillingham and
Wong.
Earlier this month, Smith and
Graulty reportedly were near
agreement to sell Rewald's per-
sonal property and the corpora-
tion's property with Graulty to
keep up payments on Rewald's $6
million life insurance policy.
The rights of Rewald and the
firm's debtors to proceeds from
the sale of the properties would
be resolved sometime later, Smith_
said.
REWALD, HOWEVER, asked
for a payment of $50,000 to his
wife and five children, who are
living on the Mainland. The pay-
ment would be deducted from
the amount to which Rewald
eventually is found entitled to
after the sale. Smith said.
Smith said Graulty "flatly re-
jected" Rewald's request unless
Rewald agreed to relinguish
claims to the family's personal
assets, release Graulty from all
claims for "personal liability for
his conduct to date" and "admit
that substantially all of his (Re-
wald's) personal assets came frhe
trustee has taken all his (Re-
wald's) money." Smith said. "Hav-
ing done so, the trustee now at-
tempts to force Mr. Rewald into
signing over everything without a
trial, using Mr. Rewald's concern
for his family and his inability to
pay the life insurance premiums
as a lever. This is coercion and
must be resisted."
Smith sharply criticized Graul-
ty's reluctance to reach an agree-
ment that could allow Rewald to
help in locating Bishop Baldwin
assets.
"WHAT IS THE bankruptcy
accomplishing?" Smith asked.
"The trustee said once that he
had all the assets accounted for,
down to the last penny.
"Most recently, he (Graulty)
contradicted himself and said
that there are assets still unac.
counted for," Smith said. "Where
are they? How do investors get at
them?
"The trustee is being paid $900,-
000 a month of Bishop Baldwin
monies." Smith said. "His attor-
neys now seek almost $100,000 in
fees and costs for two months of
work, likewise to be paid out of
Bishop Baldwin monies.
"What do they have to show
for all this expense?" Smith
asked. "They have an estate
which, according to the trustee. is
worth only $2 million, including
both the Bishop Baldwin assets
and the Rewald assets. Yet $12
million of investor monies flowed
through Bishop Baldwin. accord-
ing to the trustee's original esti-
mate.
"What happened to it?" Smith
asked, adding that there may be
a "better way to get it back than
having a pack of 10 or more
attorneys picking over the bones
in this fruitless bankruptcy...
Tuesday, October 18, 1983
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/o -zs -003
Reveal
cal = ~pwyer:
$200,ObQ BaiF
Is Still Too High
f ? ? By Lee Catterall
Stnr.Iiulletin Writer
:'Ronald R. Rewald's bail was re-
dared by a state judge yesterday
r.om $10 million to $200,000 'in
-wnsh while he awaits trial on two
yirtit-decree theft charges.
I iou e\ rr. Rewald attorney Sam-
awl P. King Jr. said the bail re-
;;nuins too high and he will ask
.Hip state Supreme Court today to
.L A r it
'I think its still unreasonably
high bail." King said after Circuit
Judge Robert W.B. Chang lower-
ed it.
,?.r,Ning asked the Supreme Court
.tm Oct 14 to order the bail reset
as $l0,(O0 to $20.000, and he asked
('hang yesterday to set It at $20,.
4--Under the kind of bail pro-
.Nsecl by King, Rewald could
i,:j, luqmn able to post 10 percent
oft e amount. `
Wald) has a chance to talk to the
people he needs to talk to to. lo-
cate documents."
Because of a bankruptcy order
by federal Judge Martin Pence.
all of Rewald's personal money
and Bishop. Baldwin money have
been frozen. leaving Rewald
penniless, King pointed out. How-
ever, he said. Rewald possibly
could post a lower bail.
"At least he has a chance.-'
King told Judge Chang. "He does
have friends. He does have fami-
ly."
ASKED AFTERWARD if Re-
wald's friends and relatives
would Pe able and willing to post
$200.000, King said. "I doubt it."
Asked the same question, bank-
ruptcy administrator Thomas
Hayes said. "Two hundred thou-
sand dollars is not a great deal of
money in terms of the money
that went ?hrough Bishop. Bald-
r[~,yWwj ,F f ,;.TK'Y~~Rl ~yr~t'}J .r~~i.'tiyy~l{iQyarl~,yM
Chang was sharply crlticttt of a
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Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
 Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
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Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
 Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
Rewald
Can't
Get
Jobless Benef its
Ronald R. Rewald, unable to Robert Gilkey. deputy director
persuade a judge to free any of of the Iabor department, said the
his frozen assets, applied for application was denied because
unemployment compensation Rv%%alci had not applied in per-
benefits from the state Depart- son, hut added there were a num-
ment of Labor and Industrial her of other reasons why a per-
Relations. son in prison Although Rewald is unemploy- ble to receive uchlebennot efita eligi
ed. his request was denied be. One of the most important rea-
cause he had not applied in per- sons is that inmates are not eligi-
son, a labor department official hie to work, one of the main
said. qualifications for
Rewald is.; beingg held. in prison benefits. getting jobless
in lieu of $200,000 bail pending
trial on two theft charges. All of Meanwhile. Rewald's criminal
his personal assets were frozen attorney, Samuel King Jr., asked
after the collapse of his invest- the state Supreme Court yester-
ment company, Bishop, Baldwin, clay to lower Rewald's hail from
Rewald, Dillingham and Wong in $200,000 to $200X-. The hail had
August. been set at $10 million but Cir-
Robert Smith, Rewald's civil cujt Judge Robert Won Bae
attorney, said he applied for the Chang lowered it last week to its
unemployment benefits on behalf present amount.
of Rewald but the application King said Rewald is not in a
..as denied. Ile said he would ap- position to post the $200,000 ei-
peal the denial. the r.
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 Approved For Release 2010/08/10: CIA-RDP90-00494RO01100690080-3
.u tue~ua), ,\weuiIJer 1, 1 ,.sJ tie ii auai1U ~.ei;::t
P ence OKs fees
to lawyers from
Rewald assets .
By Jim Borg
tdcerU.eer Staff Writer
Lawyers wanting paychecks argued with
worried investors dt a federal court hearing
yesterday, but the lawyers won their' fight
for fees from Ronald Rewald's bankrupt
firm.
U.S, District Judge Martin Pence ap-
proved payments
o, from Rewald's in-
vestment company
' to 1) lawyers repre-
senting the estate
Court trustee and 2) law-
yers for the inves-
tors who pushed for
the initial bankruptcy action.
It was the first money to be released
from the Rewald estate since assets were
-Trozen by court order. Pence refused a re-
'quest from Rewald attorney Robert A.
Smith to use what's left of investors'
money to continue payments on Rewald's
~2-million life insurance policy.
"I'm not here to take away anythin Oo
w
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U. u a o c r- O-C 69
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