In Uncategorized on 03/28/2023 at 17:11

Three years back, STJ Peter Panuthos gave William French Anderson and Kathryn D. Anderson, T. C. Memo. 2023-42, filed 3/28/23, a shot at establishing that the six-figure legal fees they ran up were Section 162 ordinaries-and-necessaries to save Wm’s biomedical business.

And they do, to the extent of $13K. Wm and Kathryn can’t prove the remaining $347K was spent for anything but trying to get Wm out of the fourteen-year stretch he got for child molestation. See my blogpost “Mother and Child Reunion – Part Deux,” 4/29/20, for the backstory.

The key is the usual…the criminal acts did not take place on business premises nor in connection with business activity. Wm’s claim that he was set up by a business associate to steal his business was auf’d by an order in limine in 2021 (which I didn’t blog).

Wm, however, persisted, and that didn’t make Judge Elizabeth Crewson Paris more sympathetic to Wm.

“In the Court’s Order dated September 28, 2021, the Court granted respondent’s Motion in Limine to preclude any evidence or arguments that Dr.  Anderson was framed on false charges. In contravention of that Order, petitioners continue to argue in their Opening Brief that Dr. Anderson was falsely accused of the criminal charges for which he was convicted and that these accusations were part of the corporate sabotage and intellectual property theft scheme. Dr. Anderson was convicted by a jury of the charges brought against him, and the California Court of Appeal upheld that conviction. Anderson, 144 Cal. Rptr. 3d at 640. The Court will not further address this argument.” T. C. Memo. 2023-42, at p. 10, footnote 11.

Btw, the 2021 order did allow Wm and Kathryn to show expenses were incurred to investigate, prevent, or combat corporate sabotage, intellectual property theft, or other corporate malfeasance or potential threat thereof.

“Only the $3,000 paid to Mr. H, as evidenced by the invoice dated September 18, 2014, relates to Dr. Anderson’s gene therapy business. That invoice shows that Mr. H performed IT services for Dr. Anderson’s website under the instruction of Mr. O, including legal advocacy and promotion of Dr. Anderson’s business image. While the invoice contains no reference to the alleged wrongdoing by Dr.  Anderson’s former colleague, the work detailed in the invoice is clearly a business expense, and the Court will allow a deduction in that amount. Similarly, the two additional 2014 invoices from Mr. H, for $5,000 each, do detail work performed in the course of his investigation. Those invoices were paid by Dr. Kathryn Anderson in December 2014. The Court finds that these invoices represent additional business expenses and will allow a further deduction of $10,000.” T. C. Memo. 2023-42, at p. 12. (Names omitted).

Fascinating footnote: Among the attorneys representing the State in the appeal in the criminal case (146 Cal. Rptr. 606 (2012) was Kamala D. Harris, Esq.

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