Universal's Declaration of General Counsel in Response to SEC's Request for a Receiver

Below is Universal's 18 Page Declaration of General Counsel in Response to SEC's Request for a Receiver.
___________________________________________________


BARRY SCHAEVITZ, ESQ (BS-3405)
JACOB MEDINGER & FINNEGAN, LLP
Local Counsel for Defendants Universal
Express, Inc., Richard A. Altomare and
Chris G. Gunderson
1270 Avenue of the Americas, 31st Floor
New York, NY 10020
(212) 332-7773 (telephone)
(212) 332-7239 (facsimile)
and
ARTHUR W. TIFFORD, ESQ.
TIFFORD AND TIFFORD, P.A.
Lead Counsel for Defendants Universal
Express, Inc., Richard A. Altomare and
Chris G. Gunderson
1385 N.W. 15th Street
Miami, FL 33125
(305) 545-7822 (telephone)
(305) 325-1825 (facsimile)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

CASE NO. 04-CV-02322-GEL

U.S. SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

UNIVERSAL EXPRESS, INC., etc., et al.,

Defendants.
_______________________________________________/

DECLARATION OF CHRIS G. GUNDERSON IN SUPPORT OF
UNIVERSAL EXPRESS, INC., RICHARD A. ALTOMARE AND
CHRIS G. GUNDERSON’S RESPONSE TO BOTH
SECURITY AND EXCHANGE COMMISSION’S MOTION TO APPOINT
RECEIVER AND MOTION FOR CIVIL CONTEMPT
(ELECTRONICALLY FILED)




STATE OF NEW YORK )
)ss:
NEW YORK COUNTY )

I, Chris G. Gunderson, make the following declaration under penalty of perjury, and say:
1. USXP (“the Company) appreciates the SEC staff’s critique of the Company’s businesses in the two pending motions for appointment of a receiver and civil contempt. It is clear, however, that few people at the SEC, including its many lawyers, ever ran an operating business, made payroll for employees or provided benefits for employees and their families. Our developing company, presently with 85 employees, under the direction of Mr. Richard A. Altomare (“Mr. Altomare”), has made hundreds of payrolls and provided benefits for its employees and their families for over 14 years.
2. The Company has developed, grown and been successful and recognized despite the unrelenting attack on the Company for over ten years by the naked shorters and Wall Street financial interests who sold into the market in the name of the Company billions of unregistered and counterfeit shares, collapsing the Company’s stock price from $2 to 2 cents and currently as low as .0003 per share. This national scandal of naked short selling, covered-up by the SEC for many years, has sucked the market capitalization from smaller public companies, putting over thousands of such companies out of business and destroying the investments and jobs of thousands of Americans, at the least. The “naked shorters” (marketmakers, broker-dealers and hedge funds) illegally sold trillions of unregistered and counterfeit shares in companies’ names in violation of federal securities and counterfeiting statutes of the United States and SEC rules, all ignored by the SEC. Instead, the SEC civilly prosecuted our Company, which has been properly issued and clearly recorded in our public filings for over 14 years.
3. The Company proved that naked short selling existed upon the attack on the Company’s shares. It showed that the volume of shares traded was 11 times the Company’s outstanding shares and more than 68 times its average daily volume. State court juries in Florida in 2001 and 2003 awarded the Company verdicts exceeding a total of $700,000,000 against naked shorters. Ordinary people on those two juries understood that “you can’t sell what you don’t own and never deliver,” which is the essence of naked shorting.
4. Despite the adverse effects of naked shorting, USXP’s businesses are developing and well. We have been developing a number of growing and successful businesses for a number of years after emerging from a bankruptcy court supervised “fresh start” reorganization in 1994. Mr. Altomare worked as the manager of the reorganization for three years with the Bankruptcy Court, Eastern District of New York, without compensation or payment of expenses, to develop ongoing new businesses for the Company, since the prior business of a franchisor of private postal and packaging stores had not been successful. The Bankruptcy Court provided long term arrangements in the Reorganization Plan (“The Plan”) and related documents to provide future protections and assistance to the Company in its expected and court-recognized long term development. One of the foremost aspects of The Plan was Mr. Altomare’s long-term employment agreement specifically approved by the court for his three years of uncompensated services as manager of the reorganization and in recognition of his important role in the future development of the Company. See generally Exhibit 10.
5. The “Altomare Employment Agreement” (Exhibit 10) was defined in and included as an exhibit to and an integral part of the Plan, as follows: “All Exhibits to the Plan are incorporated into the Plan, and shall be deemed included in the Plan, regardless of when Filed.” The Reorganization Plan specifically provides that the “(e)ntry of the Confirmation Order shall also constitute an order of the Bankruptcy Court … approving the Altomare Employment Agreement.”
6. In the Altomare Employment Agreement, the Bankruptcy Court defined his powers, duties and scope of responsibilities, as follows:
“WHEREAS, the Employee has been employed
as the President and Chief Executive Officer
of the Employer during a substantial portion
of its pending proceeding under Chapter 11
of the Bankruptcy Code (the ‘Bankruptcy
Proceeding’);” 1st “Whereas” Clause).

- “WHEREAS, the Employee has been instrumental
in the Employer’s efforts to successfully
terminate its Bankruptcy Proceeding and has
expended substantial time and money without
receiving compensation or reimbursement of
expenses;” (2nd “Whereas” Clause).

“WHEREAS, the Employer desires to assure the
continued employment and services of the
Employee;” (3rd “Whereas Clause”).

“WHEREAS, the Employee desires to continue
to devote his full time and attention to the business of the Employer.” (4th “Whereas” Clause).

“Employment”, Sec. 1.

“The Employer hereby employs the Employee as
President, Chairman of the Board and Chief
Executive Officer”…( Sec. 1-A)

“During the Employment Period … the Employee
shall direct and have responsibility for all
aspects of the Company’s operations, and shall
have such authority, discretion, power and responsibility…as are customary and appropriate to
his position and those currently exercised
by and afforded to him” (Sec. 1-B(i) )

“All officers of the Employer shall report,
directly or indirectly, to the Employee…”
(Sec. 1-B(iii) )

These powers and duties of Mr. Altomare under the Plan specifically include those powers and duties to be exercised by him in the future as those exercised and afforded to him as “manager” of the reorganization of the Company.
7. Since the reorganization, Mr. Altomare has developed a vibrant and creative Company. Among other things, he decided to create a unique “out-sourced” transportation company.
8. Mr. Altomare also determined not to continue the franchising of postal stores since franchisees were reluctant to pay any fees or make other payments to franchisors, which was the problem with the prior business. Instead he formed an association of such stores where no payments to the Company would be required. Instead, the Company arranged with various vendors, through group buying power, to provide goods and services to the postal stores. These programs vary and they were offered in numerous communications with the postal stores. There are presently 18 vendor offerings. Postal stores availing themselves of these goods and services would make arrangements with the vendors through the association. The association would receive commissions from the vendors on such arrangements. This “outsourcing” model emulated FTD, which has exactly the same concept for flower stores as the Company’s postal store association, now called Postal Nation. There are over 20,000 independent postal locations, franchised or not, in the United States, Canada and Europe.
9. The Company has built all of our other subsidiaries from luggage shipping to college shipping for students to lost luggage delivery from our initial concept of these postal locations being future electronic warehouses and possible future retail locations. At the present time, there are three unsolicited proposals being prepared at the request of the United States Postal Service for MadPackers (our college delivery system) Luggage Express (our innovative solution for movement of luggage for travelers) and our postal store direct proposals to ease the burden on the USPS, and further grow Postal Nation.
10. All of the Company’s subsidiaries offer services, products or ideas to these postal stores.
11. The Company’s present businesses include Luggage Express, Virtual Bellhop, USXP Logistics, Luggage Express Associates Program (LEAP), Inc., Luggage Express Found, MadPackers, Inc., Universal Express Courier Association, Postal Nation and Universal Jet Aviation.
(a) UniversalPost International Courier Service earns revenues from selling discounted rates and services to the postal stores.
(b) Luggage Express enables travelers to have their luggage picked up at their home by one of its carriers or a local UniversalPost member store and delivered to the traveler’s destination. This business was rated as the premier luggage delivery business by the Wall Street Journal.
(c) Virtual Bellhop® is a premier door-to-door luggage transportation service.
(d) MadPackers is a logistics subsidiary for shipping personal items for college and university students.
These divisions of Universal Express Logistics, Inc. have seen revenues more than triple in each of the corresponding fiscal quarters in the last five years.
(e) Universal Jet will appear in the Company’s next annual report. It is anticipated it will add in excess of $20,000,000 to the asset base of the Company.
12. The Company’s losses are not operating losses, but mainly relate to overhead and general administrative expenses in promoting the businesses of the Company, and accounting requirements. The Company recently has engaged in large promotions with sports teams in various national sports, NASCAR and in many other media venues and with public relations firms to promote our services, all essential long-term for developing businesses.
13. The Company’s business breakdowns for all of the fiscal years of its growth and development are set forth in Exhibit 6.
14. The Company’s background and businesses are further described in detail at its website and in related published articles (Exhibit 7). Its operations are mainly located in a four story building in Boca Raton, Florida. It also has offices in Miami with its Luggage Express Found business, New York City and Boston. Its revenues have grown in each fiscal year.
15. From July, 1998, the Company owned Skyworld International Couriers, Inc., one of the largest international delivery companies, which the Company developed in scope and growth. This business was sold by the Company in January, 2001.
16. From January, 1997 until May, 2001, the Company owned and developed the business of the largest licensed entertainment ticket agency in New York City, Downtown Theatre Ticket Agency, Inc. d/b/a “Manhattan Concierge”.
17. The Company has filed all of its 10-KSB and 10-QSB reports with the SEC for over 14 years. All the reports have been reviewed and audited by four different accounting firms over that period of time. All matters regarding the Company’s businesses and operations have been properly audited and accepted.
18. In 2006 and 2007, the Company’s June 30, 2005 and June 30, 2006 10-KSBs’ and 10QSB for the December 31, 2006 period were thoroughly reviewed by the Securities and Exchange Commission’s Division of Corporation Finance and all comments were completed and satisfied. This review by the SEC’s Division of Corporation Finance entailed more than three comment letters. The Company, its SEC counsel and its accountants’ detailed and satisfactory responses to the comments were accepted in full by the Division of Corporation Finance.
19. In the aforementioned SEC review, comment letter and responses process the Company filed three full amendments and restatements to its June 30, 2005 and June 30, 2006 10-KSB’s and to its December 31, 2006 10-QSB, with copies to the Division of Corporation Finance. These reviews included loans, receivables, stock rights, cash flows, stockholders equity,
The Company’s receiving funds from investors is substantially investments in “Stock Rights,” not securities. “Stock Rights” are defined in the Notes to the Company’s Consolidated Financial Statements, which, again, were specifically reviewed and approved by the Division of Corporation Finance. The definition of stock rights as approved by the SEC Division of Corporate Finance is:
“Stock rights represent amounts received
from investors for their future rights to
purchase restricted shares of stock of the
Company at prices to be negotiated with the
Company at a future date. At such future date,
as determined by the investor, the investor
will determine with the Company the price for
the shares and the investor and the Company
will enter into a Subscription Agreement for
the price per share and the amount of the
restricted shares will be set forth in
the Subscription Agreement. Sometime
thereafter, the amount of the restricted
shares set forth in the Subscription Agreement
will be issued from Treasury and transmitted to
the investor. The future price for the shares
are determined by the investor and the Company
dependent on the prospects for the Company, its development and other factors. The purchase price for shares under the Subscription Agreements have varied from $.0003 to $0.32 per share. The terms of the stock rights are only determined at the time the Subscription Agreement is entered into between the investor and the Company.”

21. An important factor for many of the Company’s current investors in stock rights is the naked shorting of the Company’s shares over a period of approximately 10 years and the prospect that if naked shorters are forced to cover their positions and buy in the market stock to deliver to the buyers, the price of the Company’s shares will rise substantially in the naked short squeeze.
22. In addition to stock rights, investors will invest directly in the Company’s restricted stock. During the last 18 months, the Company issued over four billion restricted shares to three individual investors under circumstances exempt from registration requirements of Section 5 of the Securities Act.
23. All of the Company’s stock issuances have been and are faithfully set forth in detail in its annual and quarterly reports to the SEC. The Company will produce and offer into evidence all of its Form 10QSB and Form 10KSB filings for the past 13 years, if necessary.
24. Shares issued for services are set forth in detail in the Company’s annual and quarterly reports. The Division of Corporation Finance of the SEC reviewed these details with respect to its recent audits and reviews. See ¶¶19, 20, 21, supra. The Notes to the Company’s Financial Statements reviewed with the Division of Corporation Finance covering this matter under “Deferred Compensation”, read as follows:
“Deferred Compensation is Stock issued to advisors for future services under an agreement for a specific term. The terms range anywhere from 3 months to 10 years. The stock is valued at market price on the date of issuance and is amortized and expensed based on the term of the agreement”.
25. The Division of Corporation Finance also reviewed, received satisfactory responses and accepted them from the Company on the “Related Party Receivable” for the spouse of the Chief Executive Officer. This has been on the accounts of the Company for over eight years. The applicable footnote, agreed to by the Division of Corporation Finance in its audits and reviews, reads as follows:
“As of June 30, 2006, the Company had
advanced $906,000 to the spouse of the
Chief Executive Officer, who is an employee
of the Company. These loans were advanced
from 1999-2003, pursuant to the First Amended
Plan of Reorganization of Packaging Plus
Services, Inc., that the Reorganization Court
approved on February 18, 1994 (the “Reorganization
Plan”) and the Long Term Employment Agreement
part of the Reorganization Plan, which
authorized the Chief Executive Officer of the
Company to receive loans from the Company.
In 1999, at the recommendation of the Company’s
then accountants, all future loans under the
Reorganization Plan and Employment Agreement
for the Chief Executive Officer were recorded in
the name of his spouse. The Company feels that
there is adequate security for the advances
based on the relationship of the borrower to
the Chief Executive Officer of the Company.
The Company has not yet determined repayment
terms of these advances.”

26. With respect to the Notes Receivable referred to in the Company’s Consolidated Balance Sheet of 3/31/07, this item is covered in Note 5 of page F-12 of 10KSB/A for the fiscal year ended June 30, 2006. This information was omitted from the SEC motions for receivership and civil contempt, probably through an oversight.
27. With all due respect to the Court’s conclusions in its February 21, 2007 opinion and order, Universal Express has never issued a false press release. Despite the hysterical exhortations of the SEC, the deposition records in this case will show that the constructs by the SEC that selected press releases were false were contradicted during the respective witnesses’ cross examination, and it was clearly established that each challenged press release was accurate.
28. In 2003, the Denver office SEC commenced a program of harassment against the Company, with more than 13 subpoenas for documents. The Company initially volunteered to provide information on the contracts for proposed acquisitions and funding sources for those acquisitions. Before these documents were even received by the attorneys from the Denver office they were calling those acquisition candidates’ senior officers, threatening them with reprisals so that they would move away from the Company. This pattern of intimidation was successful, since a number of large acquisitions in progress valued at more than $800 Million Dollars were terminated.
29. The SEC’s attack on Universal Express as a whistleblower on naked shorting was in full swing in 2003, and continues to date, with recent harassing inquiries on behalf of the SEC’s Denver office within the last few days to the resident agent for its landlord of the Company’s Florida location, stating that the SEC was seeking a receivership of the Company and inquiring if the Company was in default under its lease. The Company is not in default under the lease, which lease has been in effect for over eight years. The landlord and its agent, however, have become anxious and constrained toward the Company as a result of this totally improper inquiry designed to injure the Company. There have been other recent improper inquiries by the SEC with others with whom the Company does business, furthering what now firmly appears to be a continuing pattern of behind-the-scenes activities to damage the Company.
30. The reference to the Jackson Family memorabilia displays a lack knowledge of the true circumstances. In truth and in fact, Universal Express’ title to the collection was derived from its contract with Vintage. Before the proposed initial auction, claimants to some of the thousands of items attempted to stop the auction in three different jurisdictions, Nevada, New York and New Jersey. These attempts were defeated, but the auction was damaged in its anticipated results. Some of matters continue in litigation, mostly in the Chancery Division, Superior Court of New Jersey, Monmouth County. On July 3, 2007, that Court, upon an order to show cause filed on behalf of Vintage, conducted a full evidentiary hearing and has issued temporary restraining orders against various claimants, including Janet and Michael Jackson (the original Nevada parties), pending a further hearing before the Court with respect to such claimants to some of the Jackson Family memorabilia. It is anticipated that upon the resolution of the New Jersey action to affirming title to Vintage, further auctions and sales will be held Universal Express with anticipated substantial favorable financial results.
31. Mr. Altomare’s officer positions, powers and his prominence in the affairs of Universal Express were specifically provided for in great detail by the Bankruptcy Court in the Company’s Reorganization Plan and Disclosure Statement. These powers, positions and immunities were directed by the Bankruptcy Court to continue long-term during the developmental stage of the Company, and they continue to date, except to the extent this Court’s judgment may be affirmed as properly encroaching upon the final order of the Bankruptcy Court.
33. The Company has at all times acted in good faith reliance on the orders of the Bankruptcy Court, the long-term provisions of the Reorganization Plan, confirmed by the Bankruptcy Court and the immunities provided to the Company and its officers under the Bankruptcy Code.
34. The undersigned, as General Counsel of the Company for over 12 years, provided the Denver office of the SEC with copies of the reorganization documents in response to their initial subpoena for share-issuance documents. They chose to ignore this and chose to charge the Company for unregistered shares, when in fact they were and have been properly issued and registered.
35. On April 21, 2006, I testified at my continued deposition extensively concerning the Company’s Reorganization Plan, the included Stock Incentive Plan and Altomare Employment Agreement. To silence and no cross examination, I described those documents filed many times with the SEC, placed in evidence each such document constituting the functional equivalent to the S-8 registration, placed into evidence copies of the immunity from suit provisions of the Bankruptcy Code and the daily recapitalization of the Company caused by the naked shorting of our shares and the clear right of the Company to cover those counterfeit and unregistered shares by shares properly issued by the Company under its Reorganization Plan and the provisions of the Bankruptcy Code.
Dated: July 26, 2007.

______________________________
CHRIS G. GUNDERSON




Click Links Below For Easy Navigation:

1. Supreme Court Case
2. 150 Articles: SEC finally admits Naked Short Selling is a HUGE problem and a cause for financial crisis (July 15th, 2008 et. seq-September 15th, 2008 et. seq)
3. Richard Altomare's "Prison Inc." Book Excerpts
4. Universal Express Statement
5. Universal Express Recitation of Facts by General Counsel
6. Brief in Support of USXP Entitlement to Trial by Jury
7. Universal Express Complaint filed against SEC- March 3, 2004
8. USXP Full Page Ad in New York Times
9. Office of Inspector General Semi Annual Report to Congress- March 31, 2008
10. Richard Altomare's Speech on Naked Short Selling
11. USXP Quarterly and Annual Reports
12. Exhibit A and B: Universal Express Press Releases and Published Articles on Naked Short Selling 1998-2007
13. Universal Express Motion for Partial Summary Judgment
14. Supplemental Declaration of Chris G. Gunderson- Nov 13, 2006
15. Universal Express et al Motion for Reconsideration- March 8th, 2007
16. USXP Memo of Law in Support of Motion for Reconsideration
17. Universal's Declaration of General Counsel in Response to SEC's Request for a Receiver