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Tuesday, March 23, 2010

A Heated Deposition Turns the South Butt Case Into One Giant "Clusterf@#k"

Posted By on Tue, Mar 23, 2010 at 11:48 AM

Remember how The South Butt LLC -- a Mizzou freshman's apparel company that's getting sued by The North Face for trademark infringement - has that motto, "Never Stop Relaxing!"? Well, on Friday, the student's father, Jim Winkelmann Sr., stopped relaxing.

Eighteen minutes into a deposition held by the apparel giant's lawyers, he grew so enraged  that a recess was called.

Now he's demanding that North Face's attorneys at Bryan Cave withdraw from the case, insisting that the firm once represented him and is now drawing on that familiarity to impugn his character. Throw in concerns about stalking, and we have on our hands what South Butt attorney Albert S. Watkins calls, "a monumental clusterfuck."

Meanwhile, South Butt's 19-year-old founder Jimmy Winkelmann, is headed to Panama City on Friday for spring break. He'll be handing out South Butt t-shirts on the beach.

North Face filed the federal lawsuit last August, generating much publicity and revenue for the tiny company; South Butt answered with a cheeky response, and the judge ordered both parties to mediate. Friday's deposition was supposed to be part of that hashing-out-of-differences. That is, before it went off the rails.  

Winkelmann Sr. says he arrived at the deposition prepared to discuss the case. "We have nothing to hide," he says. (Well, sort of: during Jimmy's recent deposition, opposing counsel brought up his minor offense of marijuana possession last Halloween, and he reportedly said, "You're not gonna tell my dad, are you?")

The subpoena for Winkelmann Sr. lists several topics to be covered, all of them involving South Butt, in which he states he's played the role of business manager and sounding board ever since Jimmy began classes at Mizzou.

"Jimmy is the ultimate entrepreneur," he says. "He's got all these ideas, and he's got everybody else doing his work." 

Winkelmann other businesses include Blue Ocean ATM and Blue Ocean Portfolios, but you may remember him best from Huntleigh Securities and HFI Securities. There, he was the partner of Don C. Weir, who's now in prison for stealing $12 million in precious-metal coin investments from dozens of clients (read our feature here).

Early on in Friday's questioning, North Face lawyers from Byran Cave tried to broach the subject of a lawsuit in which Winkelmann and Weir's companies got sued by a landlord for not paying rent at 8000 Maryland in Clayton, formerly their headquarters. They conceded this case, and later the landlord sued them again, successfully, for fraudulently transferring assets to avoid having to pay.

When all of this came up on Friday, Winkelmann told the lawyers that their firm must already have those details, because Bryan Cave represented him in the initial lease. Not only that, he said, they'd represented him, his family and at least six of his businesses in at least 15 matters over the course of eight years. Then things got craaaa-zy!

Here's an excerpt from the deposition transcript (Q = North Face lawyer, A = Winkelmann):

Q: Sir please get control of yourself.
A: No. I am out of control.
Mr. Watkins: Why don't we take a break for a second. I want to talk to -- I need to find something out.
A: This is really outrageous. It really is outrageous.
Q: No, it is not, sir.
A: We paid your firm over a half a million dollars, sir, and you're taking that information to prosecute my son.
Q:...I am not using any information that was obtained in prior representation.
A:...How am I supposed to know that?
Q: Cause I just told you
A: You're asking me questions about a dispute. This is really outrageous. What kind of -- all the whole --
Mr. Watkins: Mr. Winkelmann --
A: Look, you don't represent me either. [Watkins was representing South Butt, not Winkelmann personally]
Mr. Watkins: Hang on a second. It might be worthwhile for us to take a short break here so I can find out a little bit of information.
Q:...that's fine. Cause I do think you need to get control of yourself.
A: Oh, you get control of yourself, David [Roodman].
Q: I have control of myself.
A: No. Your law firm is out of control, because, obviously, we can't trust you after representing--
Q: Sir I am asking you questions...I'm using only publicly available information. I'm asking you questions about your businesses.
A: You already have the answers to these.
Q: No, I don't.
A: You represented Huntleigh Financial Services.
Q: I don't --
A: Did Bryan Cave represent --
Q: I have - I have no idea.
A: Oh, come on.
Q: Sir, we have 1200 lawyers. I don't know who represented you.
A: You know what --
Mr. Watkins: Mr. Winkelmann -- Mr. Winkelmann would you join me please for a break?
Several minutes later, David Roodman of Bryan Cave reiterated that his only knowledge of Winkelmann and legal issues involving him came from public info. "If you want to question that, Mr. Watkins, bring it on," he said. "But there's absolutely no impropriety whatsoever."

(Click for Part I and Part II of the deposition transcript.)

The next day, Winkelmann sent a letter to Bryan Cave demanding it surrender any information it has accumulated on him over the years through representation. He also claims that the other firm hired by North Face, Greenberg Traurig, has been "infected" by what he calls a conflict of interest.

More depositions are scheduled for today and tomorrow.

EPILOGUE: The Stalking Thing

As Winkelmann tells it, he was filling one of his ATMs in Clayton on Friday when he spotted one of North Face's out-of-state attorneys, Barbara Kaplan, at the Sheraton Plaza Hotel. On Saturday, he hand-delivered a letter, almost identical in tone and substance to his other letters, to the hotel's concierge to pass along to Kaplan.

Soon, Watkins got a call from a representative of Bryan Cave, who voiced concerns that Winkelmann was stalking the attorney. Winkelmann denies doing so.

Plenty of updates, on all of these matters, to come.

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