Wright & Mills, P

Wright & Mills, P.A.

Attorneys at Law

218 Water Street - P.O. Box 9

Skowhegan, Maine 04976-0009

May 28, 1998

Celia E. Strickler, Clerk

U.S. Bankruptcy Court

537 Congress Street, 2^nd Floor

Portland, ME 04101

Re: In Re: Catherine Duffy Petit

Case no: 93-20821

Dear Ms. Strickler

Enclosed for filing are the following documents:

Status Report Concerning Evaluation of Estate's Claim Against Key Bank.
Certificate of Service

Thank you.

Yours very truly,

WRIGHT & MILLS, P.A.

S. Peter Mills

SPM/bp

Enclosures

C: All parties in interest

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UNITED STATES BANKRUPTCY COURT

DISTRICT OF MAINE

In re: Catherine Duffy Petit Chapter 7

Case No. 93-20821

Debtor

STATUS REPORT CONCERNING EVALUATION OF ESTATE'S CLAIM AGAINST KEY BANK

As a product of the Court's order of April 13, 1998, appointing the undersigned as special litigation counsel to the trustee, two members of this firm (myself and Robert Conkling, esq.) have undertaken a review of Petit v. Key Bank, a case now pending in York County Superior Court under docket number CV 86-608.

The purpose of this filing is to report on what has been accomplished, to outline what remains to be done, and to inform the Court and the parties of our present plan.,

Because the work has been approached in phase, our progress is best described y reference to those phases:

Phase 1. Obtain a familiarity with the allegations and defenses through reviewing available synoptic information and the materials on file in the York County Superior Court.

Progress: We completed this work in the initial period of our assignment

Phase 2. Identify where source materials may be found for an in depth review of the claim and its underlying documentation.

Progress: This phase is on-going but is a much larger undertaking than had been anticipated at the outset of our assignment. Material of relevance to the claim exists in files associated with at least five other lawsuits. Not all of the necessary materials were in the custody of the debtor. Because court files are insufficient to serve our purposes, it has been necessary to request from attorneys in those lawsuits that we be granted access to certain depositions, documents and exhibits that have been stored away, sometimes in closed files. The debtor, her former attorneys, and counsel for parties to other lawsuits have been most cooperative in honoring our requests; but the process of located and extracting these file materials has significantly delayed our review.

Our initial projections for completing this project were based on the assumption that there was a coherent and complete file available that we could look at form start to finish without being concerned about gathering additional material. In part because the nature of the claim has shifted as the result of the latest Law Court decision, we have had to do more fundamental work than what was required for the case as earlier framed.

We are reasonably satisfied that we now have access to the materials we need in order to complete the work at hand; but our review of recently received files is obviously just commencing.

Phase 3. Evaluate and project the outcome of various legal issues which arise from our review.

Progress: We have identified the chief legal issues in the case and have, we believe, acquired the answers that we need for our analysis. For example, we are reasonably satisfied:

That the debtor is entitled to a trial by jury.
That a recovery in favor of the plaintiff will not be burdened by an offset for amounts earlier contributed by the co-defendants.
That an award in plaintiff's favor will be augmented by interest calculated presently at 94% of the verdict.
That the present defendant is vicariously liable for the acts of Wallace Haselton and other agents of the Defendant's predecessor.
That if the plaintiff successfully supports the allegations of the Fourth Amended Complaint, it will justify overcoming the qualified privilege defense.
That recent Maine cases have sustained awards of punitive damages on facts closely analogous to those in the present case

Phase 4. Interview Catherine Petit and her attorneys at various stages of our work.

Progress: The debtor and her attorneys have been accommodating and cooperative throughout the period of our engagement. On the other hand, the debtor and her counsel have been highly preoccupied with preparations for her criminal trial.

Just this week, the criminal case was rescheduled to September, 1998. As a result, the debtor will now be more readily available for interview.

Phase 5. Identify and interview potential witnesses whose participation is important for support and presentation of the claim.

Progress: In the course of our ongoing documentary review, we have identified a number of witnesses whom we would like to interview before completing our evaluation. Although we are still reviewing documents, it will be appropriate for us to locate and speak with these witnesses beginning next week.

Phase 6. Evaluate the claim based on our analysis of whether the allegations of the Fourth Amended Complaint can be supported.

Progress: Evaluation is an on-going process; we have completed our evaluation of many issues in the case and expect to have recommendations for the Trustee by June 30, 1998.

Special Counsel to the Trustee

S. Peter Mills

Wright & Mills, P.A.

218 Water Street

Skowhegan, Maine 04976

(207) 474-3324

Dated: May 28, 1998