Free Witness List - District Court of Federal Claims - federal

Case 1:96-cv-00408-LAS

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS INNOVAIR AVIATION, LTD., ) ) ) ) ) ) ) ) ) )

Plaintiff, v. THE UNITED STATES, Defendant.

No. 96-408C (Senior Judge Smith)

DEFENDANT'S WITNESS LIST Pursuant to the Court's March 12, 2007 Scheduling Order and September 27, 2007, defendant hereby identifies its list of witnesses to be called at trial which commences on October 17, 2007: 1. Ernest Arvai - The Arvai Group, 115 Indian Rock Road, Suite 20, P.O. Box 468,

Windham, NH 03087-0468, ph. (603) 894-0000 ­ Mr. Arvai will testify concerning his specific conclusions contained in his expert report dated July 9, 2007. Mr. Arvai will testify that the Basler Turbo-67 (BT-67) had virtually no market potential as a passenger carrier, given its technical obsolescence, especially compared to less costly, competing aircraft, and economic constraints facing Third World carriers. Thus, had Innovair retained the Technology License Agreement (TLA), Innovair Aviation Ltd. (Innovair) would have received no kit or converted aircraft sales from this market segment. Mr. Arvai will further testify that the BT-67 would not sell in the commercial general cargo market because it was more difficult to load than other aircraft and because more cost-effective and efficient competing aircraft existed for every cargo mission in which the BT-67 would conceivably be used. He will also testify that the BT-67 is a niche market aircraft that may be appropriate for special mission markets, but that the limited demand for aircraft in this market was fully met by Basler Turbo Conversions, Inc. (BTC) which

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was familiar with the special missions and military applications for the BT-67. Finally, Mr. Arvai will testify that Innovair's kit strategy was ill-suited even for the limited special missions market into which the BT-67 might be sold. It is anticipated that Mr. Arvai's direct testimony will require three to four hours. 2. Maurice J. Whalen, CPA - Invotex Group, 1100 Connecticut Ave., N.W., Suite

710, Washington, D.C. 20036, ph. 202-370-2407 - Mr. Whalen will testify concerning his specific conclusions contained in his expert report dated July 6, 2007. Mr. Whalen will testify about the financial and operating condition of Innovair and BTC, as it relates to exploiting the value of the TLA. He will also testify regarding the underlying assumptions upon which Mr. Cobb relies in his expert report, and will opine that they are insufficient to prove damages. In addition, Mr. Whalen will testify that the Cobb & Associates, Ltd. conclusions found in the report prepared by Arthur Cobb (the Cobb report) that the estimated lost expectancy interest values based upon lost sales and profits are nothing more than unfounded speculation because, prior to writing his report, Mr. Cobb had not conducted any independent research, analyses, or investigation into the substance of the information provided by management or the appropriateness for use in estimating, with reasonable certainty, damages in this matter. He will further testify that Mr. Cobb is functioning as an advocate of the plaintiff repeating management expectations, not adding any significant information, rather than as an independent expert. He will testify that, for these reasons, Mr. Cobb's opinions should not be considered by the court in determining damages in this matter with reasonable certainty. Finally, Mr. Whalen will testify that the $1.375 million in damages, plus $440,879 in interest previously paid the United States, based upon the judgment issued by the Arizona district court, should be subtracted from any

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judgment that the Court may enter in this case. It is anticipated that Mr. Whalen's testimony will require two to three hours on direct. 3. Daniel P. Kaplan, Ph.D. - LECG, 1725 I Street, N.W., Suite 800, Washington,

D.C. 20006, ph. 202-973-9877 ­ Dr. Kaplan will testify concerning his specific conclusions contained in his expert report dated July 9, 2007. Specifically, Dr. Kaplan will testify that the value of the TLA, as of the time of the "taking" which occurred in May 1992, did not exceed $1,375,000, the amount of the substitute res bond. The value of the TLA was limited by several factors. Most notably, demand for the TLA was tepid, at best. In addition, the provisions of the TLA required the cooperation of BTC and BFS to provide know-how in the marketing and sale of the aircraft as well as to furnish licenses for the operational equipment. The need for the owner of the TLA to rely so extensively on a single supplier further limited the value of the license. This valuation is supported by the events that took place prior to and shortly after the seizure of the TLA. Further support comes from the lack of entry of any DC-3 conversion companies since the seizure of the TLA. It is anticipated that Dr. Kaplan's testimony will require two to three hours on direct. 4. Thomas Weigt, President, Basler Turbo Conversions, 255 West 35th Ave.,

Oshkosh, WI, 54903-2305 - 920-236-7820 ­ Mr. Weigt will testify about his responsibilities as president of BTC and as head of the conversion program for Basler Flight Service, now part of BTC. He will testify the availability of airframes and the manufacture of the BT-67. He will testify about BTC's marketing efforts to sell the converted DC-3 aircraft, the Basler Turbo-67 (BT-67), both before and after the seizure of the TLA through 1998 and the difficulties BTC has encountered in marketing and selling the BT-67 both inside and outside of Innovair's territory.

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Mr. Weigt will testify about the conversion process itself, the difficulties BTC has had obtaining financing for the BT-67 conversion effort, and the sales that BTC has made from 1990 through 1998. Mr. Weigt will testify about the difficulties with the kit-approach to marketing and sale of the BT-67. He will also testify about the difficult relationship between Bryan Carmichael and Warren Basler and how those difficulties contributed to the business problems BTC and Innovair experienced in 1990 and 1991. In addition, Mr. Weigt will testify about the documents he prepared, reviewed, signed, or received in the course of his responsibilities as president of BTC. It is anticipated that Mr. Weigt's direct testimony will require three to four hours. 5. Fred Johnson, 231 Green Harbor Road, Old Hickory, TN 37178, ph. 615-541-

2523 ­ Mr. Johnson will testify about his responsibilities as head of United Technologies Corp.'s (UTC) effort to market the BT-67 kit and aircraft in the Far East, including the Taiwan joint venture effort with Innovair and BTC. He will testify that he prepared the chart upon which Mr. Arthur Cobb relied in his expert report but that the projections contained in the chart were not his projections, but were unscientific guesses prepared by someone else, which he used to persuade his management to pursue the possibility of obtaining offsets through conversion of DC-3s. Mr. Johnson will testify concerning UTC's goals with respect to entering into the Purchase Agreement with Innovair and BTC. Mr. Johnson will further testify that the Government's transfer of the TLA to BTC did not cause UTC to fail in its efforts to set up a conversion facility in Taiwan or to obtain customers for BT-67 aircraft or kits in the Far East. In addition, Mr. Johnson will testify about the documents he prepared, reviewed, signed, or received in the course of his responsibilities as head of UTC's offset program in the Far East. It is anticipated that Mr. Johnson's testimony will take two to three hours on direct.

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6.

Thomas Fraker, 8425 E. Kalil Dr., Scottsdale, AZ, ph. 480-991-0406 ­ Mr. Fraker

will testify about his responsibilities while employed at Warwick Consulting Group, Inc. (Warwick) and his efforts to obtain investors on behalf of Innovair and to assist Mr. Bryan Carmichael in restructuring Innovair's and/or his relationship with BTC. More specifically, Mr. Fraker will testify that he prepared the May 18, 1991 Warwick report and that the sales projections were not based upon any independent determination on his part. In addition, Mr. Fraker will testify concerning his valuation of BTC and Innovair in the spring of 1991, his unsuccessful efforts to locate suitable investors, and his assessment of the riskiness of Innovair's business venture as the spring of 1991. Mr. Fraker will also testify about the documents he prepared, reviewed, signed, or received in connection with the issues in this case. It is anticipated that Mr. Fraker's testimony will take between one hour and one and one-half hours on direct. 7. David T. Thompson, Deloitte & Touche, LLP, 350 South Grand Avenue, Los

Angeles, CA, ph. (213) 688-6588 ­ Mr. Thompson will testify about Deloitte & Touche LLP's (D&T) engagement by Mssrs. Bryan Carmichael and Barry Wilson in 1990 and his responsibilities and the responsibilities of associates in connection with that engagement. He will testify about D&T's compilation of financial projections on behalf of Innovair and BTC in 1990. He will also testify about the documents he prepared, reviewed, signed, or received in connection with D&T's compilation of Innovair's and BTC's financial projections. It is anticipated that Mr. Thompson's testimony will take one to two hours on direct. Should plaintiff consent, the Government would agree to use selections of Mr. Thompson's deposition testimony in lieu of calling Mr. Thompson to testify at trial.

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8.

Randy Myers, Basler Turbo Conversions, 255 West 35th Ave., Oshkosh, WI,

54903-2305, ph. 920-236-7820 ­ Mr. Myers will testify about his responsibilities as production manager at BTC. We anticipate that, if we call Mr. Myers, he will testify primarily as a rebuttal witness. He will testify about the process of converting the DC-3 aircraft to the BT-67. He will also address as a rebuttal witness any technical issues relating to the BT-67 conversion effort that might arise during the course of plaintiff's case. It is anticipated that Mr. Myers' testimony will require 30 minutes to one hour hours on direct. 9. Raymond E. Stone, 94 Shepherd Road, West Hartford, CT 06110, ph. 860-521-

7005 ­ Mr. Stone prepared the UTC Purchase Agreement between Innovair, BTC, and UTC and the UTC Distributor Agreement between Innovair and UTC. Should plaintiff's counsel ask any of the witnesses at trial to testify about the meaning of these agreements, we may call Mr. Stone to testify also about these agreements. In addition, Mr. Stone may also testify about the documents he prepared, reviewed, signed, or received in the course of his responsibilities as counsel with the Pratt & Whitney group of UTC. It is anticipated that Mr. Stone's testimony will take between 30 minutes and one hour on direct. 10. Herbert Hayes, address and telephone number unknown. Mr. Hayes will testify

about UTC's efforts to market the BT-67 kits on behalf of Innovair and UTC's efforts to obtain financing on behalf of the BT-67 conversion project. Mr. Hayes will also testify about the documents he prepared, signed, or received during the course of his responsibilities as consultant with UTC. It is anticipated that Mr. Hayes' testimony will take one to one and one-half hours on direct. Should plaintiff consent, we would be prepared to designate portions of Mr. Hayes' deposition transcript in lieu of calling Mr. Hayes to testify at trial.

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11.

Michael Hintze, 18 Welle Drive, Oshkosh, WI 54902, ph. 414-902-5222 ­ Mr.

Hintze will testify about his responsibilities as controller of BTC. It is anticipated, at this time, that defendant will call Mr. Hintze to testify as a rebuttal witness, if necessary. If we call him, Mr. Hintze will testify about BTC's financial condition and BTC's efforts to obtaining financing in connection with the BT-67 project. Mr. Hintze will testify about the documents he prepared, reviewed, signed, or received while at BTC. It is anticipated that Mr. Hintze's testimony will take 30 minutes to one hour on direct. 12. Bryan Carmichael, unknown ­ Mr. Carmichael, as president of Innovair, will

testify about his responsibilities as majority shareholder of Innovair and minority shareholder of BTC. He will testify about Innovair's and BTC's early efforts to market the BT-67 in the Innovair territory. Mr. Carmichael will also testify about Innovair's efforts to obtain financing for the BT-67 project, his efforts to sell his interests in Innovair and/or BTC in 1990 through 1991, and his disagreements with Warren Basler about the BT-67 conversion project and the lawsuit(s) filed in the Wisconsin courts relating to those disagreements. Mr. Carmichael will also testify about the documents he prepared, reviewed, signed, or received in connection with the issues in this case. It is anticipated that Mr. Carmichael's testimony will take one to two hours on direct. 13. Reid C. Pixler1 - United States Attorney's Office, 2 Renaissance Square, 40 North

On September 28, 2007, the Court granted Plaintiff Innovair Aviation Limited's Motion in Limine to Exclude Testimony of Charles McKee and Reid Pixler, prior to the time that the Government had an opportunity to file a brief opposing plaintiff's motion. The Government requested an opportunity to brief the matter. In its September 28, 2007 order, the Court ruled: "The motion to exclude the testimony of Mr. Pixler is GRANTED. The Government may file an opposition to the Plaintiff's motion to exclude Mr. Pixler's testimony, and the Court will issue a separate written opinion." We have included Mr. Pixler's name on our witness list because, -7-

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Central, Ste. 1200, Phoenix, AZ 85004-4408, on temporary assignment, Provincial Reconstruction Team, Rule of Law Section, FOB Marez, APO AE, 09334, ph. 240-553-9242 ­ Mr. Pixler will testify about his responsibilities as an Assistant United States Attorney, the negotiations with representatives from BTC and Innovair regarding the posting of the substitute res bond, following the seizure of the TLA, and he will testify concerning the documents he prepared and received in the course of his responsibilities relating to the release of the TLA to BTC and events stemming from these activities. Mr. Pixler will testify about the documents he prepared, reviewed, signed, or received in the course of his responsibilities as Assistant United States Attorney. It is anticipated that Mr. Pixler's testimony will require one to two hours on direct. Defendant reserves the right to call as a witness any witnesses listed on plaintiff's proposed witness list in the event that plaintiff does not call them to testify at trial or does not ask them to testify about matters which these witnesses have testified during their depositions, defendant reserves the right to amend this list to include any witnesses whose existence or relevance later becomes apparent. Moreover, in lieu of calling them to testify at trial, defendant

despite the Court's ruling, we would like to call him to testify at trial about his negotiations with Innovair and, later, BTC relating to the release of the TLA in exchange for the posting of the substitute res bond. We expect to file our opposition to plaintiff's motion and our motion for reconsideration on October 9, 2007. -8-

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reserves the right to introduce at trial the deposition testimony of any of these witnesses or any other relevant witnesses not designated here. Respectfully submitted, PETER D. KEISLER Assistant Attorney General

/s/ Jeanne E. Davidson JEANNE E. DAVIDSON Director

/s/ Sheryl L. Floyd SHERYL L. FLOYD Senior Trial Counsel BRIAN T. EDMUNDS Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 616-8278 Attorneys for Defendant OCTOBER 5, 2007

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CERTIFICATE OF FILING I hereby certify that on this 5th day of OCTOBER, 2007, a copy of this "DEFENDANT'S WITNESS LIST" was filed e1ectronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing, through the Court's system.

/s/ Sheryl L. Floyd