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Written by: Dennis Fordham

Published: 01 August 2009

Closely held and family run businesses are vital to our economy, our society and integral to the American dream itself.

Planning for transitions in ownership and control is necessary to ensure retirement income to the owner; liquidity to the owner’s estate upon death; preservation of the business as a “going concerns”; and estate tax minimization, as relevant.

If you are a business owner, such planning entails asking yourself the following: (1) How will your business continue without you – will you keep the business in your family or sell it, and if so, to whom; (2) if some children will participate in the business and others not how will your estate plan accommodate that; (3) Are there key employees you need to retain; (4) Does your business need reorganization; (5) Do you have a “buy sell” agreement in place (presuming multiple owners); and (6) How will the “buy sell” agreement be funded. Now, let’s examine each area.

At the outset, examine your business and family goals, and identify limitations placed on such goals by business agreements with co-owners; determine who will be your successor(s). If you plan to sell to outsiders, ask yourself what do you need to get the business ready for sale, and how will you find potential buyers? Presuming family participation, who has the interest and necessary aptitude? Do you need the consent of the other partners? Will their plans and your plans coincide nicely? Will a sale to them provide you with an adequate retirement? Will you continue as a consultant or employee to assist them and to earn retirement income?

Next, how will your estate plan provide for your other children not in the business? Does being fair to them mean treating them equally or unequally? Are there other assets (like insurance) to give them? Do you wish to give them an economic ownership interest only? If so, should the active family be allowed to buy-out the inactive family?

What about your key employees, will they be retained after you leave? Will your family accept them, and vice versa? Should they have an ownership stake? If so, will they be allowed to buy-in, or will they receive their interests as conditional employee bonuses (sweat equity) subject to forfeiture? Furthermore, will they participate in management?

Does your business need reorganization in order to transfer or retain control and/or ownership interests as desired? Sole proprietorships are often converted into LLC’s, corporations or partnerships. For example, with an LLC you can retain control as the general partner but allow your children ownership as limited partners.

Alternatively, you may want to give control but retain an economic interest for your retirement. For example, with a corporation you can retain preferred stock and transfer common stock, and so require that dividends be paid to you first.

A “buy sell” agreement is needed when you have co-owners in order to allow your interest to be purchased upon certain triggering events: disability, retirement, and death. The agreement sets the a price, often by formula or appraisal. Also, it may allow the business itself, or your remaining co-owners, a right of first refusal to purchase your interest.

Above all, how will you fund the plan? Usually the business or its owners purchase life insurance, and sometimes disability insurance, on each owner. Alternatively, an installment sale to the business, its remaining owners, or outsiders may be used. Installment sales, however, may present a cash flow problem to your estate when it needs money in order to support your family, to pay immediate administration costs, and to pay taxes.

Lastly, succession planning is a multi-disciplinary endeavor involving business planning, estate planning, financial planning, income tax and estate tax planning, and perhaps business counseling. Typically, a team consisting of an attorney, accountant, and a financial planner is needed to advise and assist you.

Dennis A. Fordham is an attorney licensed to practice law in California and New York. He earned his bachelor's degree at Columbia University, his juris doctor at the State University of New York at Buffalo, and his LL.M in taxation at New York University. He concentrates his practice in the areas of estate planning and aspects of elder law. His office is at 55 First St., Lakeport. He can be reached by e-mail at dennis@dennisfordhamlaw , com or by phone at 707-263-3235.

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Written by: Elizabeth Larson

Published: 01 August 2009

HIDDEN VALLEY LAKE – Two people have died in a collision in front of Hidden Valley Lake.

The California Highway Patrol has confirmed two fatalities in the crash, which occurred on Highway 29 at Spruce Grove Road Extension shortly before 10:30 a.m

CHP reported one fatality when officials first arrived at the scene, with another person with major injuries.

Fire officials were attempting to extricate another victim as sheriff's officials responded.

The second death was confirmed at approximately 10:53 a.m.

The crash also blocked the roadway. Just after 11 a.m. officials opened the road with one-way traffic control, which was in effect for just over 40 minutes before the highway was once again opened. Tow services were summoned to remove vehicles from the scene.

CHP has so far not offered any other details on the specifics of the incident, including how many cars were involved and the identities of the victims.

E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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Written by: Elizabeth Larson

Published: 31 July 2009

LAKEPORT – Day four of Bismarck Dinius' trial saw five witnesses take the stand as the prosecution continues to present its case.

Hopkins alleges that Dinius, 41, was steering Willows resident Mark Weber's sailboat on April 29, 2006, when it was hit by a powerboat driven by Russell Perdock, an off-duty sheriff's deputy. Weber's girlfriend, Lynn Thornton, 51, was mortally injured and died days later from her injuries.

Perdock was not charged in the case, but Dinius is facing felony boating under the influence with great bodily injury, because District Attorney Jon Hopkins alleges he had a blood alcohol level of 0.12 and did not have navigation lights on according to state and federal boating laws.

At the end of the first week of testimony, Hopkins' witnesses were law enforcement investigators who described handling key pieces of evidence as well as the larger investigation.

Craig Woodworth, the District Attorney's Office's acting chief investigator, testified that last month, on June 3, he went to the sheriff's Boat Patrol facility at Braito's Marino on Buckingham Point to remove the speedometer and tachometer from the instrument cluster of Perdock's 24-foot Baja Outlaw powerboat.

Woodworth said he photographed and bagged the instruments, which he gave to another district attorney's investigator, John Flynn, who in turn transported the items to the California Department of Justice's Santa Rosa lab.

The instruments were sent to the DOJ, where a “needle slap” test was conducted. Criminalist John Yount explained that a needle slap is when an instrument with a needle experiences an extremely abrupt acceleration or deceleration, like a car crashing into a wall.

In some cases, the needle would strike the back of the speedometer face and leave a mark, which can give an indication of the vehicle's speed at the time of impact.

Yount received the instruments on June 3, and tested them between June 4 and June 8, using clear, low angle lighting.

His conclusion – there was no indication of needle slap on either instrument, and therefore testing the instruments didn't yield evidence of the vehicle's exact speed at impact. That matched the conclusion by Dr. William Chilcott, defense attorney Victor Haltom's expert, who examined the instruments about a year ago, Haltom said in court on Friday.

“Can you explain why there might not be any needle slap on the inside of these instruments?” Hopkins asked during direct questioning.

Yount said there are a variety of possible explanations, from the vehicle not coming to a very abrupt or immediate halt after impact. The needles may well have struck the instrument faces, Yount said, but not with enough force to leave noticeable marks.

He said he didn't go further and do experiments to try to determine how fast the boat would have had to travel to have needle slap occur, because he wasn't asked to do that.

“You just did exactly what they asked you to do?” Haltom asked.

“That's correct,” said Yount.

Even if they did find needle slap, Yount said, “It would be difficult to say how fast the vehicle was actually traveling.”

Sheriff's Det. Jerry Pfann returned to the stand Friday morning to briefly help clear up some conflicting testimony.

Both Pfann and retired sheriff's Sgt. Mark Hoffman had testified on Wednesday that they had transferred blood samples belonging to Weber and Dinius to the sheriff's evidence facility in Lakeport. Pfann, who testified before Hoffman, was in the courtroom as the custodian of the blood samples when he heard the testimony.

Pfann said he had taken those two samples, along with Perdock's, to the main evidence facility. On Friday he presented a report originated in the sheriff's office's RIMS software program with a date stamp to back up his statements.

Boat Patrol sergeant details scene, beginning investigation

Boat Patrol Supervisor Sgt. Dennis Ostini, who in two weeks will mark his 31^st year with the Lake County Sheriff's Office, gave the bulk of the day's testimony on Friday.

In his three and a half hours on the stand he described events including the initial call summoning him to the crash scene, as well as his decision to bring on an investigator from an outside agency to help handle the case. By the time of the crash, he had only been in the Boat Patrol about four months, and said on the stand Friday he hadn't done much boating before being assigned to the unit.

On the night of the crash, Ostini took a 20-foot aluminum sheriff's boat from its slip in Holiday Harbor in Nice and started off across the lake to Konocti Bay shortly after 9:30 p.m. He recalled there was little wind and it was a very dark, moonless night.

About two-thirds of the way there, he received a call saying the boats were being towed to 9130 Soda Bay Road, at Bayshore and Boren Began resorts, so he reduced his speed and went to the boat barn where he met Deputy Lloyd Wells and proceeded to the scene in a sheriff's pickup truck.

When he got to the “chaotic” scene just after 10 p.m., nearly an hour after the crash took place, Sgts. Mark Hoffman and Mike Morshed were there, trying to organize the scene. Witness interviews already were under way, and Kelseyville Fire paramedics were caring for the injured, including young Jordin Walker, who has been a passenger on the powerboat, and Thornton. The damaged boats were docked by that time.

Ostini said he directed Wells to tow Weber's sailboat, the Beats Workin' II, back to the Boat Patrol barn at Braito's. He had Hoffman transport Weber to the hospital, where he received medical care and a blood draw was conducted that later allegedly showed a blood alcohol level of 0.18.

Perdock came up to Ostini and they discussed the crash. Perdock told him he was involved, and Ostini said Perdock didn't appear to be intoxicated. He said Perdock also indicated he wanted a blood draw, which Ostini said is part of the agency's normal process when fatal crashes occur.

“You would have ordered it whether he volunteered or not?” Hopkins asked.

“Yes, and whether I thought he was intoxicated or not,” he said.

The task of taking Perdock to Redbud Community Hospital – now St. Helena Hospital-Clearlake – was given to then-Sgt. James Beland, Ostini said.

Beland raised the issue of giving Perdock a preliminary alcohol screening (PAS) test – or a breathalyzer – at the scene, but Ostini said he told him no, “that I wanted to get a blood test and he's volunteered to get a blood test, so we're going to get a blood test.”

Hopkins asked if Dinius and Weber received PAS tests at the scene. No, said Ostini.

Ostini said he spent “a considerable amount of time” at the scene that night. Perdock's boat was towed by a friend, with Ostini following behind, to the boat barn, where it was locked into the building after Ostini moved around some of the stored boats inside. The sailboat was towed and stored in a slip outside until the following day.

Later, at about 1:30 a.m. April 30, 2006, in the Sutter Lakeside Hospital emergency room, Ostini found Dinius being treated for a broken wrist. Dinius also is reported to also have suffered a head injury and broken ribs. Ostini said he didn't see Dinius with signs of intoxication.

Ostini said he introduced himself and asked Dinius if he was the boat's operator. “Initially he said he didn't think so because he doesn't like to dock other peoples' boats and they were on the way in when the collision occurred,” Ostini said.

Ostini said Dinius then corrected himself and said he was at the tiller. Dinius also reportedly said he had consumed two glasses of wine two hours before the collision and had a beer on the boat.

“I asked him if he knew if the navigation lights on the sailboat were illuminated,” said Ostini. He said Dinius replied, “I don't recall that specifically,” although he did remember the cabin lights being on.

Ostini asked if Dinius remembered seeing or hear the powerboat. “Is that what hit us?” he recalled Dinius saying.

Later that morning, after Ostini returned to his office after getting a little rest for the night, he said one of the first things he did was call Sheriff Rod Mitchell about bringing in a private investigator or consultant to assist with the case because of Perdock's involvement. He said Mitchell gave the go ahead.

Ostini then called Wes Dodd, the lead instructor for the California Department of Boating and Water Ways classes, one of which Ostini had completed about two weeks before the crah. He asked Dodd if he would be interested in conducting the investigation. Dodd urged Ostini to find another law enforcement agency before bringing in a private investigator.

Since then, Dodd has joined Dinius' case as one of the defense experts. His testimony is expected later in the trial.

Ostini said he knew of then-Sgt. Charles Slabaugh from the Sacramento County Sheriff's Office. They'd been introduced previously when Slabaugh came to Lake County on a mutual aid agreement to help patrol the lake during the BoardStock event at Konocti Harbor Resort & Spa.

Slabaugh, after receiving Ostini's request, arrived late in the evening of the day next, May 1, 2006, along with a deputy. Ostini briefed them and they began looking over the boats.

Hopkins had Ostini look over a list of evidence items taken from the sailboat. They included a 1.75-liter bottle of vodka with five ounces of liquor left inside, a bottle of Wildhurst reserve wine that was about one-third full, a half-full 1.75-liter bottle of tequila and a GPS device attached at the stern. During testimony later in the day he said there had been seven empty beer cans in various parts of the boat.

Ostini pressed on speed issues

During his time on the stand, Haltom questioned Ostini repeatedly on issues of safe speed.

Haltom asked Ostini if he remembered testifying in a deposition on the case about how fast he was traveling in his sheriff's boat to the scene.

He said he didn't recall a specific number, although he thought he said 30 miles per hour. Ostini said he believes now he went much faster. In his deposition he had used the phrase “breakneck speed.” In last year's preliminary hearing Ostini had said it was between 30 and 35 miles per hour, according to Haltom's reading of the transcript.

Ostini testified that he wasn't very comfortable traveling at the high speed across the lake. “It was just a kind of an eerie feeling.”

Once he heard the boats were being towed in and no people were in the water, Ostini – according to the preliminary hearing transcript to which Halton referred – slowed to between 15 and 20 miles per hour.

When Haltom attempted to ask Ostini's opinion on a safe speed to travel across the lake, Hopkins objected. Judge J. Michael Byrne sustained the objection and offered to let Haltom reword the question.

Haltom asked Ostini if he had been trained in federal navigation rules, particularly rule six, the safe speed rule. Ostini said he had been and explained that, in general terms, it says a person should not travel any faster than they can safely stop in half the distance to an obstruction.

The general thrust, Haltom suggested, is to travel at a safe speed based on conditions? “Yes, that would be a good characterization,” said Ostini.

Haltom asked what is the fastest speed Ostini would have felt safe traveling on the lake. Hopkins objected, Byrne sustained. Haltom tried again, asking what was the fastest speed at which Ostini would have felt comfortable.

Hopkins again objected and this time Byrne overruled. When Hopkins continued to argue against the question, saying there were too many conditions, Byrne held up his hand, saying he didn't want to argue in front of the jury, and that they could discuss that question later.

Ostini said the issue of the sailboat's lights didn't arise for him until a fisherman, Colin Johnson, told him about seeing the unlit sailboat during an interview on the lakeshore. Perdock also told Ostini that night that he didn't see the boat's lights. In addition, Johnson told Ostini he had shined a spotlight on the sailboat, and that he hadn't seen any lights on it.

Haltom asked why Ostini brought in Slabaugh. “Although I felt fairly comfortable conducting the investigation, I knew that anytime a law enforcement officer was involved in something of this nature, there was a possibility of questions of impropriety,” Ostini replied.

During his cross-examination, Haltom also asked about shore lights and how they can make navigating at night difficult. “Sometimes shore lights can be a distraction,” said Ostini, especially in the area of resorts like Konocti Harbor and Richmond Park.

Haltom asked if a boater headed toward Richmond Park at night – as Perdock was – could see background lights that might interfere with the ability to see another vessel ahead. “Not necessarily,” Ostini said.

But possibly? Haltom asked. Ostini said it's possible.

Haltom also questioned Ostini about a nighttime trip he and Slabaugh took on the lake at night to visit the area of the crash. He asked Ostini if he remembered mistaking a boat light for a shore light. Ostini said he had seen a light far away which they eventually realized was a boat.

During an afternoon break, the judge allowed the prosecution and defense to argue the objection over the safe speed questions.

Hopkins, who objected to the line of questioning, said, “Safe speed, first of all, is a legal conclusion.”

Byrne said they have officers giving opinions in traffic cases all the time.

Hopkins replied that the US Supreme Court has pointed out that the safe speed question “depends on the particular circumstances involved.” He said Haltom was asking his questions about safe speed in a vacuum.

Byrne suggested that the form of the question should relate to the time and place, adding that Ostini had the expertise to offer an opinion.

Haltom said he thought it was implied that he was asking Ostini about the very conditions he had experienced on the lake that night. He quoted Ostini's deposition for the civil lawsuit related to the crash, in which he said the safe speed that night was between five and 10 miles per hour.

He went on to quote Ostini in the deposition saying he mistook a boat light for a shore light. Ostini, who was present for the exchange, said to Hopkins that he didn't say that, and Hopkins replied that wasn't what was stated.

As the prosecutor and defense attorney continued to argue about how to quote transcripts and other points, Byrne admonished them not to get petty. “We had a good week.”

With Ostini back on the stand, Haltom asked him about the interview he had with Perdock following the crash, and how fast Perdock said he was going.

“He said he thought he was going about 40,” Ostini said.

“Did he tell you how he knew hew as going 40?” Haltom asked.

“He said that it takes his boat that speed or about that speed to get it up to plane or on plane,” said Ostini.

It was explained Friday that “on plane” is when a powerboat levels out after it picks up speed.

When Haltom asked him what would have been the top safe speed to travel on Clear Lake that night, Ostini said he didn't think he could accurately answer the question because he was responding to an emergency call.

During continued questioning about safe speed, Ostini said, “As a general rule, regardless of moonlight conditions, I rarely exceed a speed of 20 to 25 miles per hour at night, unless it's a real moonlit night.”

Haltom read a piece of Ostini's testimony from the preliminary hearing, in which he said five to 10 miles per hour would have been the top safe speed on the lake that night.

Ostini said he has yet, to this day, to experience a night that duplicated that night in April 2006 in terms of darkness.

Haltom once again questioned him about seeing a boat and thinking it was a shore light. Ostini said he saw the boat and didn't think there were shore lights in that area of Konocti Bay, and then they got closer and saw it moving.

He also questioned Ostini more on navigation laws, including safe speed and maintaining a proper lookout. As he sought to have Ostini answer his questions in relation to Perdock's boat that night, Hopkins lodged repeated, successful objections.

Hopkins then asked how far away a boat's navigation lights can be spotted at night. “The law says if a boat has a properly operating stern light, it's required to be seen for two miles,” said Ostini.

Could such a light have been seen on a night like April 29, 2006? Hopkins asked. Ostini said he believed so.

In cases involving powerboats and sailboats, Haltom wanted to know which is required to stay out of the way of the other. “The sailboat is less maneuverable so the powerboat should stay away from it,” Ostini said. “If the powerboat operator can see that boat.”

Haltom asked if federal navigation rules say anything about boats being lit or unlit as part of the requirement for powerboats to stay away. Ostini said he would have to read it, so Haltom handed him a copy.

During another break, Haltom objected to a comment that the judge had made about needing to see the boat in relation to the boating rules.

Byrne said a fundamental issue in the case is causation. “If speed trumps visibility, that's a question for the jury.”

When the jury returned, Byrne clarified for the jury that it's the prosecution's burden to establish that Dinius was operating a vessel while intoxicated, that he failed to exhibit side and stern lights between sunrise and sunset, and that neglect of those ordinary duties resulted in bodily injury to Thornton.

Sacramento sheriff's lieutenant begins testimony

Lt. Charles Slabaugh spent about 45 minutes on the stand before the day concluded. A 28-year veteran of the Sacramento County Sheriff's Office, he has experience investigating boating accidents.

He explained how he and a deputy arrived from Sacramento and began a walkaround of the boats in the sheriff's boat barn before they began photographing them.

Under Hopkins' questioning, he explained the boats' conditions. The sailboat's stern light housing appeared to have come in contact with the underside of the speedboat as it passed over, leaving a long black mark along the entire side of the speedboat.

He described a picture of the boat's light switches that showed the cabin lights were on, but the running lights, bow light and stern light were off. Slabaugh also described finding protruding wires from the stern light, which sat on a rail that was bent by the impact.

Court recessed for the week shortly before 4:15 p.m. “We are getting a lot done,” Byrne told the jury.

Testimony continues at 9 a.m. Tuesday.

Witnesses so far, in order

Day one (following opening statements): James Ziebell, sailor, helped skipper Beats Workin' II in Konocti Cup; Doug Jones, past commodore of local sailing club; Anthony Esposti*, fisherman; Colin Johnson*, fisherman.

Day two: Lake County Sheriff's Det. Jerry Pfann; Andrea Estep*, phlebotomist, St. Helena Hospital-Clearlake (formerly Redbud Community Hospital); former sheriff's Sgt. James Beland; LaDonna Hartman, phlebotomist, Sutter Lakeside Hospital; retired sheriff's Sgt. Mark Hoffman; California Department of Justice criminalist Gregory Priebe, Santa Rosa lab; California Department of Justice criminalist Gary Davis, Sacramento toxicology lab.

Day three: Jennifer Patterson, witnessed crash from Holdener property on lakeshore; Gina Seago, witnessed crash from Holdener property on lakeshore; Jordin Walker, passenger on Russell Perdock's powerboat; James Walker*, high school friend of Perdock's and passenger on his powerboat; sheriff's Deputy Mike Morshed*; sheriff's communications operator Kimberly Erickson; sheriff's Boat Patrol Deputy Lloyd Wells*.

Day four: Craig Woodworth, the District Attorney's Office's acting chief investigator; John Yount, criminalist with the California Department of Justice's Santa Rosa lab; sheriff's Det. Jerry Pfann; Boat Patrol Supervisor Sgt. Dennis Ostini; Lt. Charles Slabaugh of the Sacramento County Sheriff's Office.

* = Indicates a witness subject to recall at the request of the defense.

E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. .