The Fate Of Krishna Books Inc.

Gupta das

BY HANSADUTTA DAS

USA, Jan 15 (VNN) — This announcement is to inform all interested parties that Gupta das, a.k.a. Joseph Fedorowsky of Oxford law firm, no longer represents K.B.Inc. (Krsna Books Inc.) of which Hans Jurgen Kary (Hansadutta das) is the chairman of the Board. He also has been dismissed and replaced as a trustee of the "Krsna Books Publishing Trust". Joseph Fedorowsky does not represent the above mentioned corporation, nor the trust in any manner, legal or otherwise. Inquiries regarding the activeties of K.B.Inc. e-mail hans@sonic.net [email no longer valid]

Addendum to Complaint, Draft 1,
7 June 1999

In November, 1998, at the time of negotiating and finalising the Settlement Agreement and Copyright License Agreement which concluded the action entitled BBT Int'l, Inc. v Kary, BC 170617, Mr. Fedorowsky led us, his clients, to believe-and obtained from us our approval of his proposal-that the copyright licensee designated as "KB, Inc." aka "Krishna Books" in the Copyright License which forms part of the Settlement Agreement would best be incorporated in the Bahamas with the license to be transferred to a trust he named "The Krsna Books Publishing Trust." Mr. Fedorowsky advised us that the trust would do business as KB, Inc. and that this arrangement would not only satisfy the terms of the copyright license agreement and settlement agreement, but would also offer significant tax advantages for our international publishing operations.

We, being lay people, trusted Mr. Fedorowsky's advice and authorised him to go to the Bahamas to set up the IBC/APT arrangement. This he did on or about 25 November 1998. See _exhibit A_, Articles of Incorporation of KB, Inc. and Trust Deed.

Even afterwards, when the members of the Licensee Board met in Sacramento on the 3rd December, 1998, Mr. Fedorowsky and Mr. Veda Guhya Das (Mr. Ehrlichman was not present at that meeting), Mr. Kary and ourselves, Mr. and Mrs. Chan, all agreed that the IBC/APT arrangement in the Bahamas was practical and acceptable, except that some modifications were necessary, and Mr. Fedorowsky was directed to add certain Board members as trustees and all of us to the Board of Directors of the IBC named KB, Inc. At the same time, Mr. Fedorowsky was to step down as trustee and Successor Protector from the trust. He himself agreed to do this, but subsequently changed his mind and unilaterally refused to abide by the resolutions made by consensus of the Board.

This is our primary grievance: Mr. Fedorowsky deceived Mr. Kary and the Chans, leading us to believe that we could set up KB, Inc., the Licensee named in the Copyright License Agreement, in the Bahamas, place the license into a trust for safekeeping and then carry out our publishing world-wide with the trust doing business as KB, Inc.

Mr. Fedorowsky failed first of all to set up the corporation/trust correctly so that it could be in compliance with the terms of the Settlement Agreement and Copyright License Agreement-either deliberately or by mistake. And even after the Board Members met last December in Sacramento and by consensus agreed to adjust the corporate structure so that it would be in compliance, Mr. Fedorowsky refused to do so.

It was on or about the 2nd and 3rd of December at that meeting in Sacramento that Mr. Fedorowsky confessed to having applied the principal of an investment fund to his legal fees and costs without authorisation from the investor Mr. Chan, in violation of an agreement between Mr. Chan and himself. At that same meeting, Mr. Fedorowsky showed his legal billing statements and for the first time we, his clients, learned that he had revised his rate from $50 per hour to $125.00 per hour without giving prior notice to his clients.

At this same meeting, Mr. Kary and the Chans demanded to receive from Mr. Fedorowsky a copy of his billing statements and accounts in connection with Mr. Chan's investment as well as accounts and documents in connection with the trust in the Bahamas, but Mr. Fedorowsky refused to hand these over.

On or about the 13th of December, a 2nd Board meeting took place in Los Angeles, and Mr. Kary, Mr. Chan, Mr. Fedorowsky and Mr. Veda Guhya Das were in attendance. At that meeting, Mr. Fedorowsky submitted a further billing for an additional $30,000.00 and asked everyone present to sign an acknowledgement of that billing amount, but Mr. Kary and Mr. Chan declined to do so. Mr. Fedorowsky again refused to hand over billing statements and accounting for Mr. Chan's investment as well as accounting for the trust in the Bahamas, but he did hand over copies of the articles of incorporation and by-laws for KB, Inc. and a copy of the trust deed for the Krsna Books Publishing Trust.

As of this meeting, again Mr. Fedorowsky was directed by everyone in attendance to abide by the resolutions of the previous meeting, and after heated exchange, he agreed to comply. Mr. Fedorowsky was to issue instructions to Mr. Dennis Sutton, his co-trustee in the Bahamas, to appoint additional trustees and to add all of us as directors of KB, Inc., as well as some of us as officers and signatories on the corporate account.

He was also to step down from all positions in the trust. He was also to arrange for partial disbursement of the trust money.

However, Mr. Fedorowsky did not follow through. Several days later, on or about the 20th of December, Mr. Kary contacted him and inquired why the promised disbursements had not yet been made and what was the progress in adjusting the corporate structure, Mr. Fedorowsky told Mr. Kary that he had not taken any action and that he had no intention of doing so, because he was in disagreement with the decisions of the Board.

Mr. Kary informed Mr. and Mrs. Chan about his conversation with Mr. Fedorowsky, and Mr. Chan telephoned Mr. Fedorowsky, who reiterated his disagreement with the decisions of the Board and declared that he had no intention of complying with them. At that time, Mr. Chan asked how it was that Mr. Fedorowsky felt he could act unilaterally to hold things up, and Mr. Fedorowsky said that he had spoken with Mr. Veda Guhya Das and that Mr. Veda Guhya Das was in agreement with what he was doing.

He then said that he and Mr. Veda Guhya Das were working on a proposal and would be sending it over the e-mail. Shortly afterwards, we received from Mr. Fedorowsky a proposal for modifying the corporate structure and trust.

See _exhibit B_, e-mail dated 20 December 1998. This proposal evidences that at first Mr. Fedorowsky and Mr. Veda Guhya Das intended to maintain the set-up in the Bahamas, but wanted to check Mr. Kary's authority as the trust Protector.

Mr. Kary protested Mr. Fedorowsky's unilateral actions, but Mr. Fedorowsky countered with the posture (which he has made repeatedly since) that he, Mr. Fedorowsky, was acting to safeguard the Settlement Agreement and Copyright License Agreement. See _exhibit C_, correspondence between Mr. Kary and Mr. Fedorowsky.

Mr. Fedorowsky in the meantime persuaded Mr. Veda Guhya Das and Ehrlichman that he was protecting their interests from what he called Mr. Kary's unilateral actions or control; whereas in fact Mr. Kary has not taken any unilateral action in this matter. Instead, it was Mr. Fedorowsky and Mr. Veda Guhya Das who abruptly switched tracks without discussing with Mr. Kary and the Chans. See _exhibit D_, correspondence between Mrs. Chan and Mr. Veda Guhya Das, dated 3 January 1999 and 4 January 1999.

Please consider that the action BBT International, Inc. v Kary, BC 170617 was originally brought against Mr. Kary, and it was Mr. Kary who engaged Mr. Fedorowsky's legal representation. Mr. Veda Guhya and Ms. Diane Marie Chan were named as cross complainants only much later, as "essential parties." Mr. Ehrlichman was not even a party, except that he signed the Settlement Agreement owing to his fiduciary duty to the trust named Bhaktivedanta Book Trust and also was named in the Copyright License Agreement as one of the 6 members of the Licensee Board. Finally, it was Mr. Kary who accepted the proposal that there be 5 other persons named in the Copyright License Agreement as members of the Licensee Board-including Mr. Fedorowsky-and without Mr. Kary's agreement and signature, there would never have been a Settlement Agreement. But Mr. Fedorowsky has taken advantage of Mr. Kary to obtain his position as member of the Licensee Board and also as trustee of the Bahamas trust and and then placed himself in direct confrontation with his client.

On December 22, 1998, Mr. Kary attempted to dismiss Mr. Fedorowsky as trustee of the Krsna Books Publishing Trust. See _exhibit E_, two letters from Mr. Kary to Mr. Fedorowsky.

On December 25, 1998, Mr. Kary and Mrs. Chan dismissed Mr. Fedorowsky as their attorney. See _exhibit F_, "cease and desist" letters from Mr. Kary and Mrs. Chan to Mr. Fedorowsky. Mr. Fedorowsky responded with a letter asserting that his legal fees amounted to more than $644,000.00 based on the rate of $200.00 per hour and said that it was the monetary recovery that triggered the increased rate. He wrote furthermore: "I reserve the right to add to these billings as necessary." See _exhibit G_, fax letter from Mr. Fedorowsky, dated 6 January 1999.

Next Mr. Fedorowsky asserted that the Licensee Board of KB Inc. must pay his attorney's fees and costs. See _exhibit H_, fax letter from Mr. Fedorowsky to Mr. and Mrs. Chan.

When Mr. and Mrs. Chan wrote to Plaintiff's attorney Mr. Liberman, seeking to recover part of the settlement money due to Defendants in the Singapore action mentioned in the Settlement Agreement, Mr. Fedorowsky threatened to sue Mr. and Mrs. Chan, claiming that they were endangering the Copyright License Agreement. Moreover, Mr. Fedorowsky asserted in that same letter that the balance settlement money as yet unpaid by Plaintiffs should be paid out to Licensee, and again he wrote, "I formally assert an attorney's fees and costs lien for the sum of $644,000.00 as against the attorney's fees recovered in settlement of the BBTI v Kary case." See _exhibit I_, correspondence from Mr. and Mrs. Chan to Mr. Liberman, dated 12 January 1999 and Mr. Fedorowsky's letter to Mr. and Mrs. Chan, dated 12 January 1999.

Mr. Fedorowsky then went ahead without former clients' approval, without fellow Board members' consensus, to incorporate a non-profit religious corporation named Krishna Books, Inc. in the State of California and then asserted it to be the legal licensee. This he did without at all consulting ourselves and in spite of objections from three members out of six. See _exhibit J_, correspondence between Mr. Fedorowsky and Mr. Kary and the Chans, dated 27 January 1999, 1 February and 2 February 1999. (Mr. Kary's letter is erroneously dated 1 January 1999.) Also Mr. Kary's letter to Krishna Books, Inc., dated 8 February 1999.

In Mr. Fedorowsky's letter dated January 27, 1999, he turned around and denied that either KB, Inc. or the trust named Krsna Books Publishing Trust was the legal licensee, and he denied that the license had ever been transferred to the Trust.

He and Mr. Veda Guhya Das, as well as Mr. Ehrlichman, have also denied that they ever approved or authorised Mr. Fedorowsky's actions in the Bahamas to incorporate KB, Inc. and form the trust named Krsna Books Publishing Trust.

See _exhibit K_, declarations of Mr. Veda Guhya Das and Mr. Ehrlichman.

On the other hand, three persons (Mr. Kary and Mr. and Mrs. Chan) can vouch that Mr. Veda Guhya did verbally approve Mr. Fedorowsky's proposed course of action to set up KB, Inc. in the Bahamas and put the license into a trust. Moreover, the fact that Mr. Fedorowsky did go there and did incorporate KB, Inc. and set up an irrevocable trust named Krsna Books Publishing Trust and place in it the copyright license as well as settlement money would indicate that Mr. Fedorowsky himself approved. So even if Mr. Veda Guhya and Ehrlichman insist that they never agreed, still that leaves 4 persons against 2 who did consent to and approve the arrangement.

Mr. Fedorowsky appointed the same 6 persons originally named in the Copyright License Agreement as members of the Licensee Board to be directors of the corporation Krishna Books, Inc. He also named officers of the corporation, himself assuming the post of secretary. Mr. Kary was not made chairman, however, even though he signed the Copyright License Agreement as such. In fact, Mr. Kary was not made an officer at all. See _exhibit L_, "Election of Initial Officers of Krishna Books Inc.", dated 26 January 1999. At the first meeting of the Board of Directors (formed without a quorum), a 7th Director was appointed, thus placing Mr. Kary and the Chans at a distinct disadvantage in voting. Furthermore, the by-laws of the corporation Krishna Books, Inc. provide that the Directors may remain in office for a term of one year, following which time they may be re-elected or removed by vote. Additionally, there is a condition stating that any Director who does not acknowledge the corporation to be the legal licensee may be removed. See _exhibit M_, "By-laws of Krishna Books, Inc."

Mr. Kary and the Chans fear that Mr. Fedorowsky et al intend to eventually remove them from the corporation altogether, but even at present, their participation has been rendered ineffectual at best, and all their objections have been disregarded.

Mr. Fedorowsky then filed a lawsuit to claim his fees from Mr. Kary and the Chans, which action has been stayed, pending outcome of arbitration proceedings. See _exhibit N_, "Complaint for Damages," and letter from DRS.

Fedorowsky then obtained the co-operation of Mr. Veda Guhya Das and Mr. Ehrlichman in moving to seek a court order amending the Stipulated Judgment in BBT Int'l Inc. v Kary, BC 170617, to declare that Krishna Books, Inc. was the legal licensee under the Copyright License Agreement. See _exhibit O_, pleadings and declarations and court order.

Mr. Kary depended on Mr. Fedorowsky to defend and further his interests in the matter of the action BBT Int'l Inc. v Kary and matters connected with the settlement of that action, but Mr. Fedorowsky has laid claim to the results of that action for himself and ostensibly for two other clients, Mr. Veda Guhya Das and Mr. Ehrlichman to the detriment of Mr. Kary and the Chans.

His misleading counsel and failure to conform to his clients' instructions with regard to the organisation of KB, Inc. aka Krishna Books, the licensee in the Copyright License Agreement, and his taking position in conflict of interest with his clients have cost Mr. Kary and the Chans not only in terms of money spent on attorney's fees and costs to address the issues under dispute but also in terms of their plans to publish-which the Copyright License Agreement should have allowed them to do, but which plans have been disrupted on account of the maneouvres of Mr. Fedorowsky to shut out or otherwise restrict Mr. Kary and the Chans from participation on the Licensee Board.

Prior to 1992, Mr. Kary and the Chans were actively publishing the works of their spiritual master, distributing in S.E. Asia and USA since 1981. Since 1992, Mr. Kary and Mr. and Mrs. Chan were involved in litigation with BBT International, Inc. in Singapore and in USA over copyright ownership of the works. In the Singapore action referred to in the Settlement Agreement, Mr. Chan spent more than $100,000.00 for legal fees and costs alone, not including out-of-pocket expenses amounting to approximately $300,000.00.

For the California action, BBT Int'l, Inc. v Kary, BC 170617, we put up more than $100,000.00. In both cases, Mr. Kary and the Chans did not initiate the legal proceedings, but thought it worthwhile to expend all this money and energy to defend their rights to publish the works on the strength of their religious convictions. And when settlement negotiations were underway last November, 1998, Mr. Kary and the Chans were resolute not to compromise the integrity of the trust established by their spiritual master and at the same time were content to obtain a copyright license which would permit them to publish the original, unrevised works world-wide. Publishing the works of the spiritual master is integral to their preaching mission. Mr. Fedorowsky's misleading advice, deception and betrayal of trust is a bitter disappointment to Mr. Kary and the Chans and has robbed them of what they endeavoured so hard for over the last several years.

A complaint to the Bar association has been filed, to get Fedorowsky disbarred as a Lawyer.

Summary: Mr. Fedorowsky breached his duty by:

1) Disclosing confidential client information
2) Converting $100,000.00 in investment funds
3) Unilaterally taking $60,000.00 out of the settlement money
4) Adding a person to the action without full disclosure
5) Failing to advise his five clients of potential conflicts
6) Taking a position contrary to the interest of his client
7) Double billing(five clients) and charging an unconscionable fee ($644,051.28)
8) Breaching the terms of the fee agreement
9) Breaching his fiduciary duty as a trustee
10) Failing to give notices before entering into business relationship with clients.

please also read:

Gupta and KBI fiasco
The 644,000 Dollar Question
Just What Is Jayadvaita's Point?
Akruranath's Challenge to Hansadutta
Hansadutta to rescind the BBT settlement agreement

reply to: angel108b@yahoo.com

Chant Hare Krishna and be happy!
All glories to His Divine Grace A.C.Bhaktivedanta Swami Prabhupada!