Filed - Supreme Court of Texas

When he prepared the McCulloughs’ June 30, 2011, statement of financial
condition (Exhibit 8), he relied upon GAAP. 53
He relied upon the advice of the McCulloughs’ counsel in determining
whether or not $365,000.00 was an appropriate entry. 54
On cross examination, Stewart testified that:
The Statement of Financial Condition says he is not expressing an opinion
about whether the statement is in accordance with GAAP. 55 But, in court
he offered the opinion that the statement was in accordance with GAAP. 56
The jury found McCullough misappropriated $138,000.00. 57
A gentleman in Stewart’s office advised McCullough to report that income
to the IRS. 58
McCullough has not followed that advice and has not filed an amended
tax return with the IRS disclosing that he received that money. 59 If
McCullough filed a tax return reporting that he had this additional
income, he would owe the IRS around $35,000.00. 60
Kathryn Shilling told him that the amount for the contract dispute, the
attorneys’ fees, CPA fees, and interest were “probable that would be
owed,” and the other damages, including punitive damages, were
53 RR, Vol. 5 of 6, p. 69.
54 RR, Vol. 5 of 6, p. 69-70.
55 RR, Vol. 5 of 6, p. 71.
56 RR, Vol. 5 of 6, p. 71-72.
57 RR, Vol. 5 of 6, p. 78.
58 RR, Vol. 5 of 6, p. 78.
59 RR, Vol. 5 of 6, p. 78-79.
60 RR, Vol. 5 of 6, p. 79.
APPELLEES’ RESPONSE TO MOTION TO REVIEW ORDER ON SUPERSEDEAS BOND – Page 16