1035-00005 · Marguerite Delp · Pleadings & Court Filings

stipulation-neutral-administrator.docx DOCUMENT M&A / Corporate

30 / 35 ← → ✕

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

PROBATE DIVISION

Petitioner MARGUERITE D. FONSECA, surviving spouse of the Decedent, by and through her attorneys of record, CALDERWOOD & HARKNESS LLP (Howard Quinn, Responsible Partner), 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, and Contestants RAFAEL T. FONSECA, ISABELA C. FONSECA-GREER, and NICOLÁS R. FONSECA, by and through their attorneys of record, BRENNAN, ORTEGA & SALDÍVAR LLP (Damian R. Ortega, Partner), 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, and with the consent and acceptance of ASHFORD FIDUCIARY SERVICES INC. (Gerald Whitmore, Principal Officer), 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, hereby stipulate and agree as follows:

RECITALS

A. Background of Proceedings.

Teodoro R. Fonseca ("Decedent") died on September 3, 2022, in the County of Los Angeles, State of California. At the time of his death, the Decedent had not executed a valid last will and testament or other testamentary instrument, and accordingly died intestate within the meaning of California Probate Code sections 6400 et seq.

On October 5, 2022, Petitioner Marguerite D. Fonseca, the surviving spouse of the Decedent, filed a Petition for Letters of Administration with this Court, seeking appointment as administrator of the Decedent's estate pursuant to California Probate Code section 8461.

On November 14, 2022, Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca—the adult children of the Decedent—filed an objection to the Petition for Letters of Administration, challenging Petitioner's right and fitness to serve as administrator of the estate. On January 9, 2023, the Contestants filed an amended objection, further contesting the characterization of certain estate assets as community property versus separate property, asserting the existence of a premarital agreement, and raising additional grounds for disqualification of Petitioner as administrator. The amended objection also asserted certain creditor claims against the estate on behalf of Contestants Isabela C. Fonseca-Greer and Nicolás R. Fonseca.

The matters raised in the Petition and the amended objection remain pending before this Court and have not been adjudicated on the merits.

B. Nature and Scope of the Estate.

The probate estate of the Decedent consists of substantial and diverse assets, including without limitation:

(i) Real Property: (a) the single-family residence located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210 (APN 4385-024-007); and (b) the oceanfront residence located at 27100 Pacific Coast Highway, Malibu, California 90265 (APN 4469-012-031);

(ii) Business Interests: (a) a fifty percent (50%) membership interest in Lumiére Canyon Studios LLC, a California limited liability company (California Secretary of State Filing No. 200906410337), with its principal office at 4200 West Olive Avenue, Burbank, California 91505; and (b) a thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company (California Secretary of State Filing No. 201518720492), with its principal office at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048;

(iii) Financial Accounts: Accounts held at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, including (a) brokerage account ending in -4782, with an approximate balance of Five Million One Hundred Twenty Thousand Dollars ($5,120,000); (b) checking account ending in -3091, with an approximate balance of Three Hundred Forty-Two Thousand Dollars ($342,000); and (c) money market account ending in -6155, with an approximate balance of One Million Eight Hundred Seventy-Five Thousand Dollars ($1,875,000);

(iv) intellectual Property Portfolio: An intellectual property portfolio comprising copyrights, residuals, and related interests in fourteen (14) feature films and six (6) television series produced during the Decedent's lifetime, together with all associated revenue streams, residuals, and royalty interests; and

(v) Personal Property: Various items of tangible personal property, including fine art, motor vehicles, furnishings, jewelry, and collectibles located at the properties identified above and at other locations to be determined through the inventory process.

The estimated aggregate value of the probate estate is approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000) per Petitioner's preliminary estimate, or approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000) per Contestants' preliminary estimate. The parties acknowledge that the final valuation of the estate remains subject to formal appraisal and accounting procedures and may differ from these preliminary estimates.

C. Dispute Regarding Appointment of Administrator.

The parties are engaged in a substantial dispute regarding Petitioner's entitlement to serve as administrator of the estate. The principal areas of disagreement include, without limitation:

(i) The characterization of certain estate assets as community property of the Decedent and Petitioner versus the separate property of the Decedent, which dispute directly bears upon the scope of the probate estate and the relative interests of Petitioner and the Contestants as heirs under the laws of intestate succession;

(ii) The alleged existence and enforceability of a premarital agreement between the Decedent and Petitioner, purportedly executed on May 30, 2008, which Contestants contend materially alters the property rights of the surviving spouse with respect to assets acquired during the marriage; and

(iii) Competing creditor claims asserted by Contestants against the estate, including a promissory note claim and an educational expense reimbursement claim, the validity and priority of which are contested by Petitioner.

The parties recognize that pending resolution of these disputes, the administration of the estate requires the services of a neutral and independent fiduciary who does not have an interest in the outcome of the litigation and who can preserve and protect estate assets for the benefit of all parties. The parties agree that the appointment of such a neutral administrator will serve the best interests of the estate and of all interested persons.

D. Mediation and Cooperative Resolution Efforts.

By stipulation filed with this Court on March 10, 2023, and approved by the Court on March 13, 2023, the parties agreed to submit their disputes to mediation before the Honorable Constance Adler (Ret.) of Westside Dispute Resolution Center, 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064. The mediation is currently being scheduled and is anticipated to take place within ninety (90) days of the date hereof.

In furtherance of the cooperative resolution of their disputes and to ensure the effective preservation and management of estate assets during the pendency of the mediation and related proceedings, the parties now stipulate and agree to the appointment of a neutral estate administrator on the terms and conditions set forth herein.

E. Selection of Ashford Fiduciary Services Inc.

After arm's-length negotiation and careful deliberation, the parties have jointly identified and agreed upon Ashford Fiduciary Services Inc. ("Ashford"), a California corporation duly licensed as a professional fiduciary under the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.), with its principal offices located at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, and whose principal officer is Gerald Whitmore, as an appropriate neutral administrator for the estate. The selection of Ashford was made through a process in which both sides proposed candidates, and Ashford was mutually acceptable to all parties.

Ashford has confirmed its willingness and ability to serve as neutral administrator of the estate on the terms set forth in this Stipulation. Ashford has further represented that it has conducted a thorough conflict of interest check and has identified no prior professional, personal, or financial relationship with any party, counsel, or entity involved in this proceeding that would give rise to a conflict of interest or the appearance of a conflict of interest. Ashford's consent to appointment and acceptance of all duties and obligations set forth herein is evidenced by its execution of this Stipulation.

STIPULATED TERMS

1.1 Appointment of Neutral Administrator.

The parties hereby stipulate and agree that Ashford Fiduciary Services Inc., acting through its principal officer Gerald Whitmore or such other qualified and licensed personnel as Ashford may designate from time to time in writing to counsel for all parties, shall be appointed as the neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, pending the final resolution of the disputes in this proceeding, whether such resolution occurs by settlement, mediation, trial, appeal, or other adjudication.

Ashford shall serve as neutral administrator in lieu of any individual party serving as administrator of the estate. Upon entry of the order approving this Stipulation, the Petition for Letters of Administration filed by Petitioner Marguerite D. Fonseca on October 5, 2022, shall be held in abeyance insofar as it seeks the appointment of Petitioner as administrator of the estate, pending further order of the Court. Nothing in this Stipulation shall be deemed a withdrawal of the Petition for Letters of Administration or a waiver of Petitioner's right to seek appointment as administrator upon the resolution of the pending disputes.

1.2 Powers and Duties of the Neutral Administrator.

Ashford shall have the following powers and duties in its capacity as neutral administrator of the estate, subject at all times to the supervision and authority of this Court:

1.2(a) Preservation of Estate Assets.

Ashford shall take possession, custody, and control of all assets of the probate estate as identified in the estate inventory to be prepared by Ridgeway Accounting Partners LLP, the estate accountant (Dennis Chua, CPA, 515 South Flower Street, Suite 3600, Los Angeles, California 90071), and as may be further supplemented or amended from time to time. Ashford shall exercise reasonable care and diligence in the preservation and protection of all estate assets.

With respect to the real property of the estate, Ashford shall maintain both the property located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, and the property located at 27100 Pacific Coast Highway, Malibu, California 90265, in their current condition. Such maintenance shall include, without limitation, the timely payment of all real property taxes, homeowner's insurance premiums, hazard insurance premiums, and flood insurance premiums as they become due, as well as all necessary maintenance, repairs, and upkeep of the properties, including landscaping, pool and spa maintenance, security services, and utility payments, all to be paid from estate funds. Ashford shall take reasonable measures to secure both properties against damage, unauthorized access, and deterioration.

With respect to the financial accounts of the estate held at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, Ashford shall preserve and maintain (i) brokerage account ending in -4782 (approximate balance: $5,120,000); (ii) checking account ending in -3091 (approximate balance: $342,000); and (iii) money market account ending in -6155 (approximate balance: $1,875,000), in accordance with any existing freeze, hold, or restriction instructions that have been placed on such accounts by the financial institution, by order of this Court, or by agreement of the parties. Ashford shall not make withdrawals from, transfers between, or investment changes in such accounts except as expressly authorized by this Stipulation, by the written consent of all parties, or by order of the Court.

1.2(b) Business Interest Oversight.

With respect to the Decedent's fifty percent (50%) membership interest in Lumiére Canyon Studios LLC (California Secretary of State Filing No. 200906410337, principal office at 4200 West Olive Avenue, Burbank, California 91505), Ashford shall monitor but not actively manage said membership interest. Ashford's oversight role shall be exercised in coordination with the remaining co-member, Marguerite D. Fonseca, who holds the other fifty percent (50%) membership interest in Lumiére Canyon Studios LLC and serves as its Chief Creative Officer, subject to the terms and conditions of the operating agreement of Lumiére Canyon Studios LLC dated March 18, 2009 (the "LCS Operating Agreement"). Ashford shall be entitled to receive copies of all financial statements, tax returns, capital account statements, and other reporting documents provided to members of Lumiére Canyon Studios LLC, and to attend member meetings as a non-voting observer on behalf of the estate.

With respect to the Decedent's thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC (California Secretary of State Filing No. 201518720492, principal office at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048), Ashford shall similarly monitor said membership interest in coordination with the managing member, Victor Sandoval. Ashford shall receive and retain all distributions, if any, payable on account of the Decedent's membership interest and shall deposit such distributions into the segregated estate administration account described in Section 1.2(c) below. Ashford shall be entitled to receive copies of all financial statements, tax returns, K-1 schedules, and other reporting documents provided to members of Pacific Rim Narrative Partners LLC.

Ashford shall not exercise any voting rights, consent rights, approval rights, or other governance rights, and shall not make any management decisions, with respect to either the Lumiére Canyon Studios LLC membership interest or the Pacific Rim Narrative Partners LLC membership interest, without the prior written consent of all parties to this Stipulation or an order of this Court. In the event that a vote, consent, or decision of a time-sensitive nature is required and the parties are unable to reach agreement, Ashford shall promptly notify counsel for all parties and may seek expedited relief from the Court.

1.2(c) Collection of Income and Distributions.

Ashford shall collect all income, royalties, residuals, distributions, dividends, interest, rents, and other payments of any kind attributable to estate assets, including without limitation: (i) all royalties, residuals, and other income from the intellectual property portfolio of the Decedent (comprising fourteen (14) feature films and six (6) television series), whether payable by studios, distributors, guilds, collecting societies, or other sources; (ii) all distributions from Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC; (iii) all interest and investment income from the financial accounts at Veltara Basin Bank, N.A.; and (iv) any rental income or other income generated by the real properties.

All such receipts shall be deposited into a segregated estate administration account to be established by Ashford at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, in the name of "Estate of Teodoro R. Fonseca, Ashford Fiduciary Services Inc., Neutral Administrator." The segregated estate administration account shall be separate from the existing financial accounts of the estate referenced in Section 1.2(a) above and shall be used exclusively for the deposit and disbursement of funds in accordance with the terms of this Stipulation.

1.2(d) Payment of Estate Obligations.

Ashford shall pay from estate funds, using the segregated estate administration account or other authorized estate funds, all ordinary and necessary estate obligations, including without limitation:

(i) Real property taxes, assessments, and supplemental tax bills for the properties at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, and 27100 Pacific Coast Highway, Malibu, California 90265;

(ii) Insurance premiums for homeowner's, hazard, flood, earthquake, and umbrella liability insurance policies covering estate real property and personal property;

(iii) Utility costs, including electricity, gas, water, trash, internet, and telephone services, for estate real properties;

(iv) Maintenance, repair, and upkeep expenses for estate real properties, including landscaping, pool and spa service, security monitoring, pest control, and HVAC maintenance;

(v) Estate administration fees payable to Ashford as set forth in Section 1.3 of this Stipulation; and

(vi) Such other ordinary and necessary expenses as may be incurred in the course of administration, provided that such expenses are consistent with the preservation and protection of estate assets.

Notwithstanding the foregoing, Ashford shall not pay any disputed claims against the estate without the prior written consent of all parties to this Stipulation or an order of this Court. Without limitation, the following claims are disputed and shall not be paid by Ashford without such prior written consent or court order:

(a) The claim of Contestant Isabela C. Fonseca-Greer based on a promissory note dated January 15, 2020, in the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000), together with accrued interest of One Hundred Ten Thousand Four Hundred Sixty Dollars ($110,460), for a total claimed amount of One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460); and

(b) The claim of Contestant Nicolás R. Fonseca for reimbursement of educational expenses in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500), allegedly incurred pursuant to an oral agreement with the Decedent.

1.2(e) Restrictions on Asset Disposition.

Ashford shall not sell, encumber, hypothecate, pledge, transfer, assign, convey, or otherwise dispose of any estate asset without the prior written consent of all parties to this Stipulation or an order of this Court. This restriction applies to all estate assets, including without limitation real property, business interests, financial accounts, intellectual property, and personal property.

The foregoing restriction shall not apply to: (i) the liquidation or redemption of assets in the ordinary course of business, such as the maturation of fixed-income instruments, certificates of deposit, or other time-sensitive investments, provided that the proceeds of such liquidation or redemption are deposited into the segregated estate administration account; or (ii) the expenditure of estate funds as necessary to pay approved estate obligations in accordance with Section 1.2(d) above.

1.2(f) Cooperation with Appraisers, Accountants, and Other Professionals.

Ashford shall cooperate with and provide reasonable access to estate records, documents, and assets for the following professionals retained by the parties in connection with this proceeding:

(i) Petitioner's Appraiser: Pinnacle West Appraisal Group LLC (Dr. Sandra Fujimoto, ASA, CVA), 4100 MacArthur Boulevard, Suite 200, Newport Beach, California 92660, retained by Petitioner for purposes of business valuation and intellectual property appraisal;

(ii) Contestants' Appraiser: Hargrove & Linden Appraisals Inc. (Morton Linden, CFA, ASA), 2600 Michelson Drive, Suite 800, Irvine, California 92612, retained by Contestants for purposes of business valuation and intellectual property appraisal;

(iii) Estate Accountant: Ridgeway Accounting Partners LLP (Dennis Chua, CPA), 515 South Flower Street, Suite 3600, Los Angeles, California 90071, retained as the estate accountant for preparation of the estate inventory, tax filings (including federal and California estate tax returns, fiduciary income tax returns, and any amended individual income tax returns), and financial reconciliation; and

(iv) Title Company: Coastline Title & Escrow Co. (Andrea Solis), 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212, for title-related matters concerning the real properties of the estate, including preliminary title reports, chain of title analysis, and any related title insurance matters.

Ashford shall make available to the foregoing professionals, upon reasonable notice and during normal business hours, all estate records, financial documents, account statements, tax returns, contracts, operating agreements, intellectual property agreements, licensing agreements, and other documents and information reasonably necessary for the performance of their respective engagements. Ashford shall also arrange for reasonable physical access to the real properties and personal property of the estate for purposes of inspection and appraisal. The parties and their retained professionals shall coordinate with Ashford in advance to schedule any site visits, inspections, or document reviews.

1.3 Compensation of the Neutral Administrator.

1.3(a) Monthly Administration Fee.

Ashford shall be entitled to a monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) for its services as neutral administrator of the estate. The monthly administration fee shall be payable on the first business day of each calendar month, commencing April 1, 2023, and continuing on the first business day of each subsequent calendar month during the term of Ashford's appointment. The monthly administration fee for any partial month at the commencement or termination of Ashford's appointment shall be prorated based on the number of calendar days of service during such partial month.

1.3(b) Annual Asset-Based Fee.

In addition to the monthly administration fee set forth in Section 1.3(a) above, Ashford shall be entitled to an annual fee equal to fifteen hundredths of one percent (0.15%) of the aggregate fair market value of all assets under administration. The aggregate fair market value shall be calculated as of the last business day of each calendar year during the term of Ashford's appointment, or as of the date of termination of Ashford's appointment, whichever is earlier. The annual asset-based fee shall be payable within thirty (30) days of the applicable calculation date. For the avoidance of doubt, the annual asset-based fee for any partial calendar year shall be prorated based on the number of days during which Ashford served as neutral administrator during such calendar year.

For purposes of calculating the annual asset-based fee, the aggregate fair market value of assets under administration shall be determined based on: (i) the most recent appraisals obtained for real property and business interests; (ii) the account statements issued by Veltara Basin Bank, N.A., as of the applicable calculation date for financial accounts; and (iii) such other valuations as may be available for intellectual property and personal property assets. In the event that a formal appraisal is not available for a particular asset category as of the applicable calculation date, the parties and Ashford shall use reasonable good faith estimates, subject to adjustment upon completion of formal appraisals.

1.3(c) Cost Sharing.

The monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) shall be shared equally between Petitioner and Contestants as follows:

(i) Petitioner Marguerite D. Fonseca shall pay Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month; and

(ii) Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca shall pay, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month.

Payment of each party's share of the monthly administration fee shall be made directly to Ashford on or before the first business day of each calendar month. In the event that either Petitioner or the Contestants fail to timely pay their respective share of the monthly administration fee, Ashford shall provide written notice to counsel for the defaulting party, with a copy to counsel for the non-defaulting party, and the defaulting party shall have ten (10) business days from the date of such notice to cure the default. If the default is not cured within such ten (10) business day period, the non-defaulting party or Ashford may seek relief from the Court, including an order directing payment from estate funds.

The annual asset-based fee set forth in Section 1.3(b) above shall be paid from estate funds and shall not be subject to the equal-sharing arrangement, as it constitutes a cost of estate administration properly chargeable to the estate as a whole.

1.3(d) Extraordinary Expenses.

Any extraordinary expenses incurred by Ashford in the course of its administration of the estate shall be paid from estate funds. Extraordinary expenses include, without limitation:

(i) Legal fees and costs incurred by Ashford for legal advice required in connection with the administration of the estate, including advice regarding the exercise or non-exercise of governance rights with respect to the business interests, compliance with tax obligations, and interpretation of this Stipulation or orders of the Court;

(ii) Emergency property repairs or capital expenditures exceeding Ten Thousand Dollars ($10,000.00) for any single occurrence;

(iii) Costs of compliance with court orders, subpoenas, or regulatory requirements; and

(iv) Any other costs or expenses that fall outside the scope of ordinary and necessary estate obligations described in Section 1.2(d) above.

Extraordinary expenses shall be subject to prior written notice to counsel for all parties and approval by the Court before payment, except that if the aggregate amount of any extraordinary expense or group of related extraordinary expenses is less than Ten Thousand Dollars ($10,000.00), Ashford may pay such expenses upon ten (10) days' prior written notice to counsel for all parties without obtaining court approval. In the event of a genuine emergency requiring immediate expenditure to prevent imminent harm to estate assets, Ashford may incur such expenses as are reasonably necessary to address the emergency and shall provide written notice to counsel for all parties within forty-eight (48) hours of incurring such expenses, together with documentation supporting the emergency and the amount expended.

1.4 Reporting Obligations.

1.4(a) Quarterly Reports.

Ashford shall prepare and provide quarterly written reports to counsel for all parties—Calderwood & Harkness LLP on behalf of Petitioner and Brennan, Ortega & Saldívar LLP on behalf of Contestants—and to the Clerk of this Court, within thirty (30) days of the end of each calendar quarter (i.e., within thirty (30) days of March 31, June 30, September 30, and December 31 of each year, as applicable). The first quarterly report shall cover the period from the date of Ashford's appointment through June 30, 2023, and shall be due no later than July 30, 2023.

Each quarterly report shall include, at a minimum:

(i) An itemized accounting of all receipts and disbursements during the reporting period, including the source and amount of each receipt, the payee, purpose, and amount of each disbursement, and the ending balance of the segregated estate administration account and all other estate accounts;

(ii) A current inventory of all estate assets under administration, together with estimated values based on the most recent available information;

(iii) A summary of any material events affecting estate assets during the reporting period, including without limitation distributions received from Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, changes in insurance coverage, property damage or loss, litigation developments involving estate assets, and any communications with third parties regarding estate assets;

(iv) A statement of accrued and unpaid administration fees, including the monthly administration fee and the annual asset-based fee; and

(v) Such other information as Ashford deems relevant to the administration of the estate or as may be reasonably requested by counsel for any party.

1.4(b) Special Reporting.

In addition to the quarterly reports described above, Ashford shall promptly notify counsel for all parties, in writing, of any material event affecting estate assets. For purposes of this Section 1.4(b), a "material event" includes, without limitation:

(i) Any default, breach, or alleged breach under any contract, lease, license, operating agreement, or other agreement to which the estate is a party;

(ii) Any litigation, arbitration, administrative proceeding, or regulatory action involving the estate or any estate asset;

(iii) Any material change in the value of any estate asset, including any decline in the value of the brokerage account at Veltara Basin Bank, N.A. in excess of ten percent (10%) of its value as of the most recent quarterly report;

(iv) Any casualty, damage, or loss affecting estate real property or personal property;

(v) Any communication from Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, or any other business entity in which the estate holds an interest regarding a proposed transaction, capital call, distribution, dissolution, or other material event; and

(vi) Any inquiry or communication from any taxing authority regarding the estate or the Decedent's tax obligations.

Ashford shall provide such special notice within five (5) business days of becoming aware of the material event, or sooner if the circumstances require immediate attention.

1.5 Insurance and Bonding.

Ashford shall maintain professional liability (errors and omissions) insurance with minimum coverage of Five Million Dollars ($5,000,000.00) per occurrence throughout the entire term of its appointment as neutral administrator of the estate. Upon request by counsel for any party, Ashford shall provide a certificate of insurance evidencing such coverage, including the name of the insurer, policy number, policy limits, deductible, and policy period.

In addition, Ashford shall furnish a surety bond in the amount of Five Hundred Thousand Dollars ($500,000.00), or such other amount as the Court may direct, within fifteen (15) calendar days of the entry of the order approving this Stipulation. The bond shall be issued by a surety company authorized to do business in the State of California and shall name the Estate of Teodoro R. Fonseca as the obligee. The cost of the bond premium shall be paid from estate funds as a cost of estate administration.

1.6 Duration and Termination.

1.6(a) Duration.

Ashford's appointment as neutral administrator of the estate shall continue until the earliest of the following:

(i) Entry of a final, non-appealable order of this Court resolving the disputes in this proceeding and either appointing a permanent administrator, confirming a settlement agreement, or ordering the distribution of the estate;

(ii) The mutual written agreement of all parties to this Stipulation to terminate Ashford's appointment, filed with and approved by the Court; or

(iii) An order of this Court terminating Ashford's appointment, whether upon motion of a party or upon the Court's own motion.

Upon the termination of Ashford's appointment, Ashford shall, within thirty (30) days, prepare and deliver to counsel for all parties and to the Court a final accounting of all receipts, disbursements, and assets under administration, and shall transfer all estate assets, records, and documents to the successor administrator or to such other person or entity as the Court may direct.

1.6(b) Removal.

Any party to this Stipulation may petition the Court for removal of Ashford as neutral administrator for cause. For purposes of this Section 1.6(b), "cause" includes, without limitation, breach of fiduciary duty, failure to comply with the reporting obligations set forth in Section 1.4, material failure to comply with any other term of this Stipulation, conflict of interest arising after appointment, incapacity, or insolvency.

Ashford may resign as neutral administrator upon sixty (60) days' prior written notice to counsel for all parties and to the Court. In the event of a resignation by Ashford, Ashford's duties and obligations under this Stipulation shall continue during the sixty (60) day notice period unless the Court orders otherwise, and Ashford shall cooperate in the orderly transition of administration to a successor administrator.

In the event of removal or resignation, the parties shall use good faith efforts to agree upon a successor neutral administrator within thirty (30) days of the effective date of removal or the expiration of the sixty (60) day notice period, as applicable. If the parties are unable to agree upon a successor within such period, any party may petition the Court to appoint a successor neutral administrator.

1.7 Non-Probate Assets Excluded.

The parties acknowledge and agree that certain non-probate assets are not part of the probate estate and are not subject to Ashford's administration under this Stipulation. Without limitation, the following assets are non-probate assets and are excluded from the scope of Ashford's appointment:

(i) Life insurance proceeds payable under Meridian Mutual Life Insurance Co. Policy No. GH-TL-2019-05582, with a death benefit of Three Million Dollars ($3,000,000.00), naming Marguerite D. Fonseca as the designated beneficiary; and

(ii) Life insurance proceeds payable under Commonwealth Fidelity Assurance Corp. Policy No. GH-WL-2014-01247, with a death benefit of Two Million Dollars ($2,000,000.00), naming Marguerite D. Fonseca as the designated beneficiary.

Nothing in this Stipulation shall affect, impair, or be construed to address Petitioner's Petition for Preliminary Distribution of Non-Probate Assets filed with this Court on January 18, 2023, or any party's rights or obligations with respect to such non-probate assets.

1.8 Effect on Pending Claims.

The appointment of Ashford as neutral administrator of the estate shall not constitute, and shall not be construed as, an adjudication, determination, or resolution of the merits of any party's claims, defenses, or positions regarding the characterization, ownership, valuation, or distribution of estate assets, or regarding the entitlement of any party to serve as administrator of the estate.

Without limitation, the following rights and positions are expressly preserved and unaffected by this Stipulation:

(i) Petitioner Marguerite D. Fonseca's claim that all or substantially all of the assets of the estate are community property of the Decedent and Petitioner, and Petitioner's position that she is entitled to appointment as administrator of the estate;

(ii) Contestants' claims that certain assets of the estate are the separate property of the Decedent by virtue of the alleged premarital agreement dated May 30, 2008, and Contestants' position that Petitioner is not entitled to serve as administrator;

(iii) The claim of Contestant Isabela C. Fonseca-Greer based on a promissory note dated January 15, 2020, in the original principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), together with accrued interest of One Hundred Ten Thousand Four Hundred Sixty Dollars ($110,460.00), for a total claimed amount of One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460.00); and

(iv) The claim of Contestant Nicolás R. Fonseca for reimbursement of educational expenses in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500.00), allegedly incurred pursuant to an oral agreement between the Decedent and Nicolás R. Fonseca.

All such claims and positions remain pending before this Court and shall be resolved on their merits in due course.

1.9 Communication Protocol.

All communications between the parties and Ashford regarding the administration of the estate shall be directed through counsel for the respective parties. Specifically:

(i) Communications on behalf of Petitioner Marguerite D. Fonseca shall be directed to Ashford through Calderwood & Harkness LLP (Howard Quinn, Responsible Partner), 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, telephone (213) 555-7200, email hquinn@calderwoodharkness.com; and

(ii) Communications on behalf of Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca shall be directed to Ashford through Brennan, Ortega & Saldívar LLP (Damian R. Ortega, Partner), 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, telephone (310) 555-4100, email dortega@bos-law.com.

Direct communication between any party (whether Petitioner or any Contestant) and Ashford is not permitted except with the prior written consent of counsel for both sides or by order of the Court. This restriction is intended to ensure transparency and to prevent the appearance of impropriety or favoritism.

Gerald Whitmore shall serve as Ashford's primary point of contact for all matters arising under this Stipulation. In the event that Gerald Whitmore is unavailable for any reason, Ashford shall designate an alternate point of contact and shall notify counsel for all parties of such designation in writing.

1.10 Confidentiality. Ashford and all of its officers, employees, agents, and subcontractors shall maintain the strict confidentiality of all estate information obtained in the course of Ashford's administration of the estate. For purposes of this Section 1.10, "estate information" includes all financial information, business records, tax information, personal information of the Decedent and the parties, intellectual property information, and all other information relating to the estate or the parties that is not a matter of public record.

Ashford shall not disclose estate information to any third party other than: (i) as required by applicable law, regulation, or court order; (ii) as necessary to comply with the terms of this Stipulation (including cooperation with the appraisers, accountants, and other professionals identified in Section 1.2(f)); (iii) as authorized by the prior written consent of counsel for all parties; or (iv) to Ashford's own attorneys, accountants, and other professional advisors, provided that such advisors are bound by comparable obligations of confidentiality.

This confidentiality obligation shall survive the termination of Ashford's appointment as neutral administrator, whether by completion of administration, removal, resignation, or otherwise.

1.11 Governing Law.

This Stipulation shall be governed by and construed in accordance with the laws of the State of California, including but not limited to the California Probate Code, the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.), and other applicable statutes, rules, and regulations. The Superior Court of the State of California, County of Los Angeles, Probate Division, shall have exclusive jurisdiction over all matters arising under or related to this Stipulation.

REPRESENTATIONS OF ASHFORD FIDUCIARY SERVICES INC.

In connection with its consent to appointment and acceptance of duties and obligations under this Stipulation, Ashford Fiduciary Services Inc. represents and warrants to the parties and to this Court as follows:

2.1 Ashford is a California corporation in good standing with the California Secretary of State, duly organized and existing under the laws of the State of California, and is authorized to conduct business in the State of California.

2.2 Ashford is duly licensed as a professional fiduciary under the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.) and is in good standing with the Professional Fiduciaries Bureau of the California Department of Consumer Affairs. Ashford's professional fiduciary license number is PF-00482.

2.3 Gerald Whitmore, Ashford's principal officer, and all other personnel who will be assigned to the administration of the Estate of Teodoro R. Fonseca, are individually licensed professional fiduciaries in the State of California, with current and active licenses in good standing.

2.4 Ashford has conducted a thorough conflict of interest check with respect to all parties to this proceeding (Marguerite D. Fonseca, Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca), all counsel of record (Calderwood & Harkness LLP and Brennan, Ortega & Saldívar LLP), and all entities identified in this Stipulation (including Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, Veltara Basin Bank, N.A., and all other entities referenced herein), and has identified no conflicts of interest, no prior professional or personal relationships, and no financial interests that would impair Ashford's ability to serve as a neutral and independent administrator of the estate.

2.5 Ashford maintains professional liability (errors and omissions) insurance with minimum coverage of Five Million Dollars ($5,000,000.00) per occurrence, as required by Section 1.5 of this Stipulation, through a policy issued by Pacific Professional Indemnity Group, with policy limits, deductibles, and terms sufficient to satisfy the requirements of this Stipulation and applicable law.

2.6 Ashford has the experience, resources, and qualified personnel necessary to administer an estate of the size, complexity, and nature of the Estate of Teodoro R. Fonseca, and will devote such time and resources as are reasonably necessary to fulfill its duties and obligations under this Stipulation.

STIPULATION AND AGREEMENT

The undersigned parties, by and through their respective counsel of record, and Ashford Fiduciary Services Inc., by and through its principal officer, hereby stipulate and agree to all of the foregoing terms and conditions. The parties respectfully request that this Court enter the [Proposed] Order Appointing Neutral Estate Administrator attached hereto as Exhibit A and incorporated herein by this reference.

This Stipulation may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be deemed original signatures for all purposes.

CALDERWOOD & HARKNESS LLP

Dated: March 22, 2023

By: ________

Howard Quinn, Responsible Partner Attorneys for Petitioner Marguerite D. Fonseca 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200

Email: hquinn@calderwoodharkness.com

BRENNAN, ORTEGA & SALDÍVAR LLP

Dated: March 22, 2023

By: ________

Damian R. Ortega, Partner Attorneys for Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100

Email: dortega@bos-law.com

CONSENT AND ACCEPTANCE OF ASHFORD FIDUCIARY SERVICES INC.

Ashford Fiduciary Services Inc. hereby consents to its appointment as neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, and accepts all duties, obligations, and responsibilities set forth in the foregoing Stipulation. Ashford acknowledges that it has read and understands the Stipulation in its entirety and agrees to be bound by all of its terms and conditions.

ASHFORD FIDUCIARY SERVICES INC.

Dated: March 22, 2023

By: ________

Gerald Whitmore, Principal Officer 600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Telephone: (213) 555-9350

Email: gwhitmore@ashfordfiduciary.com

EXHIBIT A

[PROPOSED] ORDER APPOINTING NEUTRAL ESTATE ADMINISTRATOR

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

PROBATE DIVISION

The Court, having reviewed and considered the Stipulation and [Proposed] Order for Appointment of Neutral Estate Administrator filed on March 22, 2023, by Petitioner Marguerite D. Fonseca, through her counsel Calderwood & Harkness LLP, and Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca, through their counsel Brennan, Ortega & Saldívar LLP, together with the consent and acceptance of Ashford Fiduciary Services Inc., and having considered the recitals and stipulated terms set forth therein, and good cause appearing therefor,

IT IS HEREBY ORDERED AS FOLLOWS:

1. Ashford Fiduciary Services Inc. (Gerald Whitmore, Principal Officer), with principal offices at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, is hereby appointed as the neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, pending resolution of the disputes in this proceeding, whether by settlement, mediation, trial, or other adjudication.

2. Ashford Fiduciary Services Inc. shall have all of the powers and duties set forth in the Stipulation filed concurrently herewith, subject to the limitations, restrictions, and conditions contained therein, including but not limited to the powers and duties described in Section 1.2 of the Stipulation (preservation of estate assets, business interest oversight, collection of income and distributions, payment of estate obligations, restrictions on asset disposition, and cooperation with appraisers, accountants, and other professionals).

3. Ashford Fiduciary Services Inc. shall be compensated for its services as neutral administrator as set forth in Section 1.3 of the Stipulation, as follows:

(a) A monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00), to be shared equally by Petitioner and Contestants, with Petitioner paying Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month and Contestants paying, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month; and

(b) An annual asset-based fee of fifteen hundredths of one percent (0.15%) of the aggregate fair market value of assets under administration, calculated as of the last business day of each calendar year or the date of termination of appointment, payable from estate funds within thirty (30) days of such calculation date.

4. Ashford Fiduciary Services Inc. shall furnish a surety bond in the amount of Five Hundred Thousand Dollars ($500,000.00) within fifteen (15) calendar days of the date of this Order. The cost of the bond premium shall be paid from estate funds. Failure to furnish the required bond within the time prescribed shall constitute grounds for vacating this Order and Ashford's appointment.

5. Ashford Fiduciary Services Inc. shall file quarterly reports with this Court, and provide copies to counsel for all parties, as set forth in Section 1.4(a) of the Stipulation, within thirty (30) days of the end of each calendar quarter.

6. The Petition for Letters of Administration filed by Marguerite D. Fonseca on October 5, 2022, is hereby held in abeyance insofar as it seeks appointment of Petitioner as administrator of the estate, pending further order of this Court. Nothing in this Order shall be construed as a denial of the Petition or a determination of Petitioner's entitlement to serve as administrator.

7. All rights, claims, defenses, and positions of all parties with respect to the merits of the contest—including but not limited to the characterization of estate assets, the existence and enforceability of the alleged premarital agreement, the validity and priority of creditor claims, and the entitlement of any party to serve as permanent administrator—are expressly preserved and are not affected or adjudicated by this Order.

Dated: ____

________________________________________

JUDGE OF THE SUPERIOR COURT

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I, the undersigned, declare as follows:

I am employed in the County of Los Angeles, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071.

On March 22, 2023, I served the foregoing document described as STIPULATION AND [PROPOSED] ORDER FOR APPOINTMENT OF NEUTRAL ESTATE ADMINISTRATOR on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid, in the United States mail at Los Angeles, California, and/or by electronic transmission via electronic mail, addressed as follows:

Howard Quinn Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200

Email: hquinn@calderwoodharkness.com

Attorneys for Petitioner Marguerite D. Fonseca

Damian R. Ortega Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100

Email: dortega@bos-law.com

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
PROBATE DIVISION
Petitioner MARGUERITE D. FONSECA, surviving spouse of the Decedent, by and through her attorneys of record, CALDERWOOD & HARKNESS LLP (Howard Quinn, Responsible Partner), 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, and Contestants RAFAEL T. FONSECA, ISABELA C. FONSECA-GREER, and NICOLÁS R. FONSECA, by and through their attorneys of record, BRENNAN, ORTEGA & SALDÍVAR LLP (Damian R. Ortega, Partner), 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, and with the consent and acceptance of ASHFORD FIDUCIARY SERVICES INC. (Gerald Whitmore, Principal Officer), 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, hereby stipulate and agree as follows:
RECITALS
A. Background of Proceedings.
Teodoro R. Fonseca ("Decedent") died on September 3, 2022, in the County of Los Angeles, State of California. At the time of his death, the Decedent had not executed a valid last will and testament or other testamentary instrument, and accordingly died intestate within the meaning of California Probate Code sections 6400 et seq.
On October 5, 2022, Petitioner Marguerite D. Fonseca, the surviving spouse of the Decedent, filed a Petition for Letters of Administration with this Court, seeking appointment as administrator of the Decedent's estate pursuant to California Probate Code section 8461.
On November 14, 2022, Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca—the adult children of the Decedent—filed an objection to the Petition for Letters of Administration, challenging Petitioner's right and fitness to serve as administrator of the estate. On January 9, 2023, the Contestants filed an amended objection, further contesting the characterization of certain estate assets as community property versus separate property, asserting the existence of a premarital agreement, and raising additional grounds for disqualification of Petitioner as administrator. The amended objection also asserted certain creditor claims against the estate on behalf of Contestants Isabela C. Fonseca-Greer and Nicolás R. Fonseca.
The matters raised in the Petition and the amended objection remain pending before this Court and have not been adjudicated on the merits.
B. Nature and Scope of the Estate.
The probate estate of the Decedent consists of substantial and diverse assets, including without limitation:
(i) Real Property: (a) the single-family residence located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210 (APN 4385-024-007); and (b) the oceanfront residence located at 27100 Pacific Coast Highway, Malibu, California 90265 (APN 4469-012-031);
(ii) Business Interests: (a) a fifty percent (50%) membership interest in Lumiére Canyon Studios LLC, a California limited liability company (California Secretary of State Filing No. 200906410337), with its principal office at 4200 West Olive Avenue, Burbank, California 91505; and (b) a thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC, a California limited liability company (California Secretary of State Filing No. 201518720492), with its principal office at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048;
(iii) Financial Accounts: Accounts held at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, including (a) brokerage account ending in -4782, with an approximate balance of Five Million One Hundred Twenty Thousand Dollars ($5,120,000); (b) checking account ending in -3091, with an approximate balance of Three Hundred Forty-Two Thousand Dollars ($342,000); and (c) money market account ending in -6155, with an approximate balance of One Million Eight Hundred Seventy-Five Thousand Dollars ($1,875,000);
(iv) intellectual Property Portfolio: An intellectual property portfolio comprising copyrights, residuals, and related interests in fourteen (14) feature films and six (6) television series produced during the Decedent's lifetime, together with all associated revenue streams, residuals, and royalty interests; and
(v) Personal Property: Various items of tangible personal property, including fine art, motor vehicles, furnishings, jewelry, and collectibles located at the properties identified above and at other locations to be determined through the inventory process.
The estimated aggregate value of the probate estate is approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000) per Petitioner's preliminary estimate, or approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000) per Contestants' preliminary estimate. The parties acknowledge that the final valuation of the estate remains subject to formal appraisal and accounting procedures and may differ from these preliminary estimates.
C. Dispute Regarding Appointment of Administrator.
The parties are engaged in a substantial dispute regarding Petitioner's entitlement to serve as administrator of the estate. The principal areas of disagreement include, without limitation:
(i) The characterization of certain estate assets as community property of the Decedent and Petitioner versus the separate property of the Decedent, which dispute directly bears upon the scope of the probate estate and the relative interests of Petitioner and the Contestants as heirs under the laws of intestate succession;
(ii) The alleged existence and enforceability of a premarital agreement between the Decedent and Petitioner, purportedly executed on May 30, 2008, which Contestants contend materially alters the property rights of the surviving spouse with respect to assets acquired during the marriage; and
(iii) Competing creditor claims asserted by Contestants against the estate, including a promissory note claim and an educational expense reimbursement claim, the validity and priority of which are contested by Petitioner.
The parties recognize that pending resolution of these disputes, the administration of the estate requires the services of a neutral and independent fiduciary who does not have an interest in the outcome of the litigation and who can preserve and protect estate assets for the benefit of all parties. The parties agree that the appointment of such a neutral administrator will serve the best interests of the estate and of all interested persons.
D. Mediation and Cooperative Resolution Efforts.
By stipulation filed with this Court on March 10, 2023, and approved by the Court on March 13, 2023, the parties agreed to submit their disputes to mediation before the Honorable Constance Adler (Ret.) of Westside Dispute Resolution Center, 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064. The mediation is currently being scheduled and is anticipated to take place within ninety (90) days of the date hereof.
In furtherance of the cooperative resolution of their disputes and to ensure the effective preservation and management of estate assets during the pendency of the mediation and related proceedings, the parties now stipulate and agree to the appointment of a neutral estate administrator on the terms and conditions set forth herein.
E. Selection of Ashford Fiduciary Services Inc.
After arm's-length negotiation and careful deliberation, the parties have jointly identified and agreed upon Ashford Fiduciary Services Inc. ("Ashford"), a California corporation duly licensed as a professional fiduciary under the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.), with its principal offices located at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, and whose principal officer is Gerald Whitmore, as an appropriate neutral administrator for the estate. The selection of Ashford was made through a process in which both sides proposed candidates, and Ashford was mutually acceptable to all parties.
Ashford has confirmed its willingness and ability to serve as neutral administrator of the estate on the terms set forth in this Stipulation. Ashford has further represented that it has conducted a thorough conflict of interest check and has identified no prior professional, personal, or financial relationship with any party, counsel, or entity involved in this proceeding that would give rise to a conflict of interest or the appearance of a conflict of interest. Ashford's consent to appointment and acceptance of all duties and obligations set forth herein is evidenced by its execution of this Stipulation.
STIPULATED TERMS
1.1 Appointment of Neutral Administrator.
The parties hereby stipulate and agree that Ashford Fiduciary Services Inc., acting through its principal officer Gerald Whitmore or such other qualified and licensed personnel as Ashford may designate from time to time in writing to counsel for all parties, shall be appointed as the neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, pending the final resolution of the disputes in this proceeding, whether such resolution occurs by settlement, mediation, trial, appeal, or other adjudication.
Ashford shall serve as neutral administrator in lieu of any individual party serving as administrator of the estate. Upon entry of the order approving this Stipulation, the Petition for Letters of Administration filed by Petitioner Marguerite D. Fonseca on October 5, 2022, shall be held in abeyance insofar as it seeks the appointment of Petitioner as administrator of the estate, pending further order of the Court. Nothing in this Stipulation shall be deemed a withdrawal of the Petition for Letters of Administration or a waiver of Petitioner's right to seek appointment as administrator upon the resolution of the pending disputes.
1.2 Powers and Duties of the Neutral Administrator.
Ashford shall have the following powers and duties in its capacity as neutral administrator of the estate, subject at all times to the supervision and authority of this Court:
1.2(a) Preservation of Estate Assets.
Ashford shall take possession, custody, and control of all assets of the probate estate as identified in the estate inventory to be prepared by Ridgeway Accounting Partners LLP, the estate accountant (Dennis Chua, CPA, 515 South Flower Street, Suite 3600, Los Angeles, California 90071), and as may be further supplemented or amended from time to time. Ashford shall exercise reasonable care and diligence in the preservation and protection of all estate assets.
With respect to the real property of the estate, Ashford shall maintain both the property located at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, and the property located at 27100 Pacific Coast Highway, Malibu, California 90265, in their current condition. Such maintenance shall include, without limitation, the timely payment of all real property taxes, homeowner's insurance premiums, hazard insurance premiums, and flood insurance premiums as they become due, as well as all necessary maintenance, repairs, and upkeep of the properties, including landscaping, pool and spa maintenance, security services, and utility payments, all to be paid from estate funds. Ashford shall take reasonable measures to secure both properties against damage, unauthorized access, and deterioration.
With respect to the financial accounts of the estate held at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, Ashford shall preserve and maintain (i) brokerage account ending in -4782 (approximate balance: $5,120,000); (ii) checking account ending in -3091 (approximate balance: $342,000); and (iii) money market account ending in -6155 (approximate balance: $1,875,000), in accordance with any existing freeze, hold, or restriction instructions that have been placed on such accounts by the financial institution, by order of this Court, or by agreement of the parties. Ashford shall not make withdrawals from, transfers between, or investment changes in such accounts except as expressly authorized by this Stipulation, by the written consent of all parties, or by order of the Court.
1.2(b) Business Interest Oversight.
With respect to the Decedent's fifty percent (50%) membership interest in Lumiére Canyon Studios LLC (California Secretary of State Filing No. 200906410337, principal office at 4200 West Olive Avenue, Burbank, California 91505), Ashford shall monitor but not actively manage said membership interest. Ashford's oversight role shall be exercised in coordination with the remaining co-member, Marguerite D. Fonseca, who holds the other fifty percent (50%) membership interest in Lumiére Canyon Studios LLC and serves as its Chief Creative Officer, subject to the terms and conditions of the operating agreement of Lumiére Canyon Studios LLC dated March 18, 2009 (the "LCS Operating Agreement"). Ashford shall be entitled to receive copies of all financial statements, tax returns, capital account statements, and other reporting documents provided to members of Lumiére Canyon Studios LLC, and to attend member meetings as a non-voting observer on behalf of the estate.
With respect to the Decedent's thirty-five percent (35%) membership interest in Pacific Rim Narrative Partners LLC (California Secretary of State Filing No. 201518720492, principal office at 8455 Beverly Boulevard, Suite 310, Los Angeles, California 90048), Ashford shall similarly monitor said membership interest in coordination with the managing member, Victor Sandoval. Ashford shall receive and retain all distributions, if any, payable on account of the Decedent's membership interest and shall deposit such distributions into the segregated estate administration account described in Section 1.2(c) below. Ashford shall be entitled to receive copies of all financial statements, tax returns, K-1 schedules, and other reporting documents provided to members of Pacific Rim Narrative Partners LLC.
Ashford shall not exercise any voting rights, consent rights, approval rights, or other governance rights, and shall not make any management decisions, with respect to either the Lumiére Canyon Studios LLC membership interest or the Pacific Rim Narrative Partners LLC membership interest, without the prior written consent of all parties to this Stipulation or an order of this Court. In the event that a vote, consent, or decision of a time-sensitive nature is required and the parties are unable to reach agreement, Ashford shall promptly notify counsel for all parties and may seek expedited relief from the Court.
1.2(c) Collection of Income and Distributions.
Ashford shall collect all income, royalties, residuals, distributions, dividends, interest, rents, and other payments of any kind attributable to estate assets, including without limitation: (i) all royalties, residuals, and other income from the intellectual property portfolio of the Decedent (comprising fourteen (14) feature films and six (6) television series), whether payable by studios, distributors, guilds, collecting societies, or other sources; (ii) all distributions from Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC; (iii) all interest and investment income from the financial accounts at Veltara Basin Bank, N.A.; and (iv) any rental income or other income generated by the real properties.
All such receipts shall be deposited into a segregated estate administration account to be established by Ashford at Veltara Basin Bank, N.A., 700 South Hope Street, Los Angeles, California 90017, in the name of "Estate of Teodoro R. Fonseca, Ashford Fiduciary Services Inc., Neutral Administrator." The segregated estate administration account shall be separate from the existing financial accounts of the estate referenced in Section 1.2(a) above and shall be used exclusively for the deposit and disbursement of funds in accordance with the terms of this Stipulation.
1.2(d) Payment of Estate Obligations.
Ashford shall pay from estate funds, using the segregated estate administration account or other authorized estate funds, all ordinary and necessary estate obligations, including without limitation:
(i) Real property taxes, assessments, and supplemental tax bills for the properties at 1847 Coldwater Canyon Drive, Beverly Hills, California 90210, and 27100 Pacific Coast Highway, Malibu, California 90265;
(ii) Insurance premiums for homeowner's, hazard, flood, earthquake, and umbrella liability insurance policies covering estate real property and personal property;
(iii) Utility costs, including electricity, gas, water, trash, internet, and telephone services, for estate real properties;
(iv) Maintenance, repair, and upkeep expenses for estate real properties, including landscaping, pool and spa service, security monitoring, pest control, and HVAC maintenance;
(v) Estate administration fees payable to Ashford as set forth in Section 1.3 of this Stipulation; and
(vi) Such other ordinary and necessary expenses as may be incurred in the course of administration, provided that such expenses are consistent with the preservation and protection of estate assets.
Notwithstanding the foregoing, Ashford shall not pay any disputed claims against the estate without the prior written consent of all parties to this Stipulation or an order of this Court. Without limitation, the following claims are disputed and shall not be paid by Ashford without such prior written consent or court order:
(a) The claim of Contestant Isabela C. Fonseca-Greer based on a promissory note dated January 15, 2020, in the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000), together with accrued interest of One Hundred Ten Thousand Four Hundred Sixty Dollars ($110,460), for a total claimed amount of One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460); and
(b) The claim of Contestant Nicolás R. Fonseca for reimbursement of educational expenses in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500), allegedly incurred pursuant to an oral agreement with the Decedent.
1.2(e) Restrictions on Asset Disposition.
Ashford shall not sell, encumber, hypothecate, pledge, transfer, assign, convey, or otherwise dispose of any estate asset without the prior written consent of all parties to this Stipulation or an order of this Court. This restriction applies to all estate assets, including without limitation real property, business interests, financial accounts, intellectual property, and personal property.
The foregoing restriction shall not apply to: (i) the liquidation or redemption of assets in the ordinary course of business, such as the maturation of fixed-income instruments, certificates of deposit, or other time-sensitive investments, provided that the proceeds of such liquidation or redemption are deposited into the segregated estate administration account; or (ii) the expenditure of estate funds as necessary to pay approved estate obligations in accordance with Section 1.2(d) above.
1.2(f) Cooperation with Appraisers, Accountants, and Other Professionals.
Ashford shall cooperate with and provide reasonable access to estate records, documents, and assets for the following professionals retained by the parties in connection with this proceeding:
(i) Petitioner's Appraiser: Pinnacle West Appraisal Group LLC (Dr. Sandra Fujimoto, ASA, CVA), 4100 MacArthur Boulevard, Suite 200, Newport Beach, California 92660, retained by Petitioner for purposes of business valuation and intellectual property appraisal;
(ii) Contestants' Appraiser: Hargrove & Linden Appraisals Inc. (Morton Linden, CFA, ASA), 2600 Michelson Drive, Suite 800, Irvine, California 92612, retained by Contestants for purposes of business valuation and intellectual property appraisal;
(iii) Estate Accountant: Ridgeway Accounting Partners LLP (Dennis Chua, CPA), 515 South Flower Street, Suite 3600, Los Angeles, California 90071, retained as the estate accountant for preparation of the estate inventory, tax filings (including federal and California estate tax returns, fiduciary income tax returns, and any amended individual income tax returns), and financial reconciliation; and
(iv) Title Company: Coastline Title & Escrow Co. (Andrea Solis), 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212, for title-related matters concerning the real properties of the estate, including preliminary title reports, chain of title analysis, and any related title insurance matters.
Ashford shall make available to the foregoing professionals, upon reasonable notice and during normal business hours, all estate records, financial documents, account statements, tax returns, contracts, operating agreements, intellectual property agreements, licensing agreements, and other documents and information reasonably necessary for the performance of their respective engagements. Ashford shall also arrange for reasonable physical access to the real properties and personal property of the estate for purposes of inspection and appraisal. The parties and their retained professionals shall coordinate with Ashford in advance to schedule any site visits, inspections, or document reviews.
1.3 Compensation of the Neutral Administrator.
1.3(a) Monthly Administration Fee.
Ashford shall be entitled to a monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) for its services as neutral administrator of the estate. The monthly administration fee shall be payable on the first business day of each calendar month, commencing April 1, 2023, and continuing on the first business day of each subsequent calendar month during the term of Ashford's appointment. The monthly administration fee for any partial month at the commencement or termination of Ashford's appointment shall be prorated based on the number of calendar days of service during such partial month.
1.3(b) Annual Asset-Based Fee.
In addition to the monthly administration fee set forth in Section 1.3(a) above, Ashford shall be entitled to an annual fee equal to fifteen hundredths of one percent (0.15%) of the aggregate fair market value of all assets under administration. The aggregate fair market value shall be calculated as of the last business day of each calendar year during the term of Ashford's appointment, or as of the date of termination of Ashford's appointment, whichever is earlier. The annual asset-based fee shall be payable within thirty (30) days of the applicable calculation date. For the avoidance of doubt, the annual asset-based fee for any partial calendar year shall be prorated based on the number of days during which Ashford served as neutral administrator during such calendar year.
For purposes of calculating the annual asset-based fee, the aggregate fair market value of assets under administration shall be determined based on: (i) the most recent appraisals obtained for real property and business interests; (ii) the account statements issued by Veltara Basin Bank, N.A., as of the applicable calculation date for financial accounts; and (iii) such other valuations as may be available for intellectual property and personal property assets. In the event that a formal appraisal is not available for a particular asset category as of the applicable calculation date, the parties and Ashford shall use reasonable good faith estimates, subject to adjustment upon completion of formal appraisals.
1.3(c) Cost Sharing.
The monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) shall be shared equally between Petitioner and Contestants as follows:
(i) Petitioner Marguerite D. Fonseca shall pay Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month; and
(ii) Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca shall pay, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month.
Payment of each party's share of the monthly administration fee shall be made directly to Ashford on or before the first business day of each calendar month. In the event that either Petitioner or the Contestants fail to timely pay their respective share of the monthly administration fee, Ashford shall provide written notice to counsel for the defaulting party, with a copy to counsel for the non-defaulting party, and the defaulting party shall have ten (10) business days from the date of such notice to cure the default. If the default is not cured within such ten (10) business day period, the non-defaulting party or Ashford may seek relief from the Court, including an order directing payment from estate funds.
The annual asset-based fee set forth in Section 1.3(b) above shall be paid from estate funds and shall not be subject to the equal-sharing arrangement, as it constitutes a cost of estate administration properly chargeable to the estate as a whole.
1.3(d) Extraordinary Expenses.
Any extraordinary expenses incurred by Ashford in the course of its administration of the estate shall be paid from estate funds. Extraordinary expenses include, without limitation:
(i) Legal fees and costs incurred by Ashford for legal advice required in connection with the administration of the estate, including advice regarding the exercise or non-exercise of governance rights with respect to the business interests, compliance with tax obligations, and interpretation of this Stipulation or orders of the Court;
(ii) Emergency property repairs or capital expenditures exceeding Ten Thousand Dollars ($10,000.00) for any single occurrence;
(iii) Costs of compliance with court orders, subpoenas, or regulatory requirements; and
(iv) Any other costs or expenses that fall outside the scope of ordinary and necessary estate obligations described in Section 1.2(d) above.
Extraordinary expenses shall be subject to prior written notice to counsel for all parties and approval by the Court before payment, except that if the aggregate amount of any extraordinary expense or group of related extraordinary expenses is less than Ten Thousand Dollars ($10,000.00), Ashford may pay such expenses upon ten (10) days' prior written notice to counsel for all parties without obtaining court approval. In the event of a genuine emergency requiring immediate expenditure to prevent imminent harm to estate assets, Ashford may incur such expenses as are reasonably necessary to address the emergency and shall provide written notice to counsel for all parties within forty-eight (48) hours of incurring such expenses, together with documentation supporting the emergency and the amount expended.
1.4 Reporting Obligations.
1.4(a) Quarterly Reports.
Ashford shall prepare and provide quarterly written reports to counsel for all parties—Calderwood & Harkness LLP on behalf of Petitioner and Brennan, Ortega & Saldívar LLP on behalf of Contestants—and to the Clerk of this Court, within thirty (30) days of the end of each calendar quarter (i.e., within thirty (30) days of March 31, June 30, September 30, and December 31 of each year, as applicable). The first quarterly report shall cover the period from the date of Ashford's appointment through June 30, 2023, and shall be due no later than July 30, 2023.
Each quarterly report shall include, at a minimum:
(i) An itemized accounting of all receipts and disbursements during the reporting period, including the source and amount of each receipt, the payee, purpose, and amount of each disbursement, and the ending balance of the segregated estate administration account and all other estate accounts;
(ii) A current inventory of all estate assets under administration, together with estimated values based on the most recent available information;
(iii) A summary of any material events affecting estate assets during the reporting period, including without limitation distributions received from Lumiére Canyon Studios LLC and Pacific Rim Narrative Partners LLC, changes in insurance coverage, property damage or loss, litigation developments involving estate assets, and any communications with third parties regarding estate assets;
(iv) A statement of accrued and unpaid administration fees, including the monthly administration fee and the annual asset-based fee; and
(v) Such other information as Ashford deems relevant to the administration of the estate or as may be reasonably requested by counsel for any party.
1.4(b) Special Reporting.
In addition to the quarterly reports described above, Ashford shall promptly notify counsel for all parties, in writing, of any material event affecting estate assets. For purposes of this Section 1.4(b), a "material event" includes, without limitation:
(i) Any default, breach, or alleged breach under any contract, lease, license, operating agreement, or other agreement to which the estate is a party;
(ii) Any litigation, arbitration, administrative proceeding, or regulatory action involving the estate or any estate asset;
(iii) Any material change in the value of any estate asset, including any decline in the value of the brokerage account at Veltara Basin Bank, N.A. in excess of ten percent (10%) of its value as of the most recent quarterly report;
(iv) Any casualty, damage, or loss affecting estate real property or personal property;
(v) Any communication from Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, or any other business entity in which the estate holds an interest regarding a proposed transaction, capital call, distribution, dissolution, or other material event; and
(vi) Any inquiry or communication from any taxing authority regarding the estate or the Decedent's tax obligations.
Ashford shall provide such special notice within five (5) business days of becoming aware of the material event, or sooner if the circumstances require immediate attention.
1.5 Insurance and Bonding.
Ashford shall maintain professional liability (errors and omissions) insurance with minimum coverage of Five Million Dollars ($5,000,000.00) per occurrence throughout the entire term of its appointment as neutral administrator of the estate. Upon request by counsel for any party, Ashford shall provide a certificate of insurance evidencing such coverage, including the name of the insurer, policy number, policy limits, deductible, and policy period.
In addition, Ashford shall furnish a surety bond in the amount of Five Hundred Thousand Dollars ($500,000.00), or such other amount as the Court may direct, within fifteen (15) calendar days of the entry of the order approving this Stipulation. The bond shall be issued by a surety company authorized to do business in the State of California and shall name the Estate of Teodoro R. Fonseca as the obligee. The cost of the bond premium shall be paid from estate funds as a cost of estate administration.
1.6 Duration and Termination.
1.6(a) Duration.
Ashford's appointment as neutral administrator of the estate shall continue until the earliest of the following:
(i) Entry of a final, non-appealable order of this Court resolving the disputes in this proceeding and either appointing a permanent administrator, confirming a settlement agreement, or ordering the distribution of the estate;
(ii) The mutual written agreement of all parties to this Stipulation to terminate Ashford's appointment, filed with and approved by the Court; or
(iii) An order of this Court terminating Ashford's appointment, whether upon motion of a party or upon the Court's own motion.
Upon the termination of Ashford's appointment, Ashford shall, within thirty (30) days, prepare and deliver to counsel for all parties and to the Court a final accounting of all receipts, disbursements, and assets under administration, and shall transfer all estate assets, records, and documents to the successor administrator or to such other person or entity as the Court may direct.
1.6(b) Removal.
Any party to this Stipulation may petition the Court for removal of Ashford as neutral administrator for cause. For purposes of this Section 1.6(b), "cause" includes, without limitation, breach of fiduciary duty, failure to comply with the reporting obligations set forth in Section 1.4, material failure to comply with any other term of this Stipulation, conflict of interest arising after appointment, incapacity, or insolvency.
Ashford may resign as neutral administrator upon sixty (60) days' prior written notice to counsel for all parties and to the Court. In the event of a resignation by Ashford, Ashford's duties and obligations under this Stipulation shall continue during the sixty (60) day notice period unless the Court orders otherwise, and Ashford shall cooperate in the orderly transition of administration to a successor administrator.
In the event of removal or resignation, the parties shall use good faith efforts to agree upon a successor neutral administrator within thirty (30) days of the effective date of removal or the expiration of the sixty (60) day notice period, as applicable. If the parties are unable to agree upon a successor within such period, any party may petition the Court to appoint a successor neutral administrator.
1.7 Non-Probate Assets Excluded.
The parties acknowledge and agree that certain non-probate assets are not part of the probate estate and are not subject to Ashford's administration under this Stipulation. Without limitation, the following assets are non-probate assets and are excluded from the scope of Ashford's appointment:
(i) Life insurance proceeds payable under Meridian Mutual Life Insurance Co. Policy No. GH-TL-2019-05582, with a death benefit of Three Million Dollars ($3,000,000.00), naming Marguerite D. Fonseca as the designated beneficiary; and
(ii) Life insurance proceeds payable under Commonwealth Fidelity Assurance Corp. Policy No. GH-WL-2014-01247, with a death benefit of Two Million Dollars ($2,000,000.00), naming Marguerite D. Fonseca as the designated beneficiary.
Nothing in this Stipulation shall affect, impair, or be construed to address Petitioner's Petition for Preliminary Distribution of Non-Probate Assets filed with this Court on January 18, 2023, or any party's rights or obligations with respect to such non-probate assets.
1.8 Effect on Pending Claims.
The appointment of Ashford as neutral administrator of the estate shall not constitute, and shall not be construed as, an adjudication, determination, or resolution of the merits of any party's claims, defenses, or positions regarding the characterization, ownership, valuation, or distribution of estate assets, or regarding the entitlement of any party to serve as administrator of the estate.
Without limitation, the following rights and positions are expressly preserved and unaffected by this Stipulation:
(i) Petitioner Marguerite D. Fonseca's claim that all or substantially all of the assets of the estate are community property of the Decedent and Petitioner, and Petitioner's position that she is entitled to appointment as administrator of the estate;
(ii) Contestants' claims that certain assets of the estate are the separate property of the Decedent by virtue of the alleged premarital agreement dated May 30, 2008, and Contestants' position that Petitioner is not entitled to serve as administrator;
(iii) The claim of Contestant Isabela C. Fonseca-Greer based on a promissory note dated January 15, 2020, in the original principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), together with accrued interest of One Hundred Ten Thousand Four Hundred Sixty Dollars ($110,460.00), for a total claimed amount of One Million Three Hundred Ten Thousand Four Hundred Sixty Dollars ($1,310,460.00); and
(iv) The claim of Contestant Nicolás R. Fonseca for reimbursement of educational expenses in the amount of Three Hundred Eighty-Seven Thousand Five Hundred Dollars ($387,500.00), allegedly incurred pursuant to an oral agreement between the Decedent and Nicolás R. Fonseca.
All such claims and positions remain pending before this Court and shall be resolved on their merits in due course.
1.9 Communication Protocol.
All communications between the parties and Ashford regarding the administration of the estate shall be directed through counsel for the respective parties. Specifically:
(i) Communications on behalf of Petitioner Marguerite D. Fonseca shall be directed to Ashford through Calderwood & Harkness LLP (Howard Quinn, Responsible Partner), 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071, telephone (213) 555-7200, email hquinn@calderwoodharkness.com; and
(ii) Communications on behalf of Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca shall be directed to Ashford through Brennan, Ortega & Saldívar LLP (Damian R. Ortega, Partner), 1900 Avenue of the Stars, Suite 2100, Los Angeles, California 90067, telephone (310) 555-4100, email dortega@bos-law.com.
Direct communication between any party (whether Petitioner or any Contestant) and Ashford is not permitted except with the prior written consent of counsel for both sides or by order of the Court. This restriction is intended to ensure transparency and to prevent the appearance of impropriety or favoritism.
Gerald Whitmore shall serve as Ashford's primary point of contact for all matters arising under this Stipulation. In the event that Gerald Whitmore is unavailable for any reason, Ashford shall designate an alternate point of contact and shall notify counsel for all parties of such designation in writing.
1.10 Confidentiality.  Ashford and all of its officers, employees, agents, and subcontractors shall maintain the strict confidentiality of all estate information obtained in the course of Ashford's administration of the estate. For purposes of this Section 1.10, "estate information" includes all financial information, business records, tax information, personal information of the Decedent and the parties, intellectual property information, and all other information relating to the estate or the parties that is not a matter of public record.
Ashford shall not disclose estate information to any third party other than: (i) as required by applicable law, regulation, or court order; (ii) as necessary to comply with the terms of this Stipulation (including cooperation with the appraisers, accountants, and other professionals identified in Section 1.2(f)); (iii) as authorized by the prior written consent of counsel for all parties; or (iv) to Ashford's own attorneys, accountants, and other professional advisors, provided that such advisors are bound by comparable obligations of confidentiality.
This confidentiality obligation shall survive the termination of Ashford's appointment as neutral administrator, whether by completion of administration, removal, resignation, or otherwise.
1.11 Governing Law.
This Stipulation shall be governed by and construed in accordance with the laws of the State of California, including but not limited to the California Probate Code, the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.), and other applicable statutes, rules, and regulations. The Superior Court of the State of California, County of Los Angeles, Probate Division, shall have exclusive jurisdiction over all matters arising under or related to this Stipulation.
REPRESENTATIONS OF ASHFORD FIDUCIARY SERVICES INC.
In connection with its consent to appointment and acceptance of duties and obligations under this Stipulation, Ashford Fiduciary Services Inc. represents and warrants to the parties and to this Court as follows:
2.1 Ashford is a California corporation in good standing with the California Secretary of State, duly organized and existing under the laws of the State of California, and is authorized to conduct business in the State of California.
2.2 Ashford is duly licensed as a professional fiduciary under the Professional Fiduciaries Act (California Business and Professions Code sections 6500 et seq.) and is in good standing with the Professional Fiduciaries Bureau of the California Department of Consumer Affairs. Ashford's professional fiduciary license number is PF-00482.
2.3 Gerald Whitmore, Ashford's principal officer, and all other personnel who will be assigned to the administration of the Estate of Teodoro R. Fonseca, are individually licensed professional fiduciaries in the State of California, with current and active licenses in good standing.
2.4 Ashford has conducted a thorough conflict of interest check with respect to all parties to this proceeding (Marguerite D. Fonseca, Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca), all counsel of record (Calderwood & Harkness LLP and Brennan, Ortega & Saldívar LLP), and all entities identified in this Stipulation (including Lumiére Canyon Studios LLC, Pacific Rim Narrative Partners LLC, Veltara Basin Bank, N.A., and all other entities referenced herein), and has identified no conflicts of interest, no prior professional or personal relationships, and no financial interests that would impair Ashford's ability to serve as a neutral and independent administrator of the estate.
2.5 Ashford maintains professional liability (errors and omissions) insurance with minimum coverage of Five Million Dollars ($5,000,000.00) per occurrence, as required by Section 1.5 of this Stipulation, through a policy issued by Pacific Professional Indemnity Group, with policy limits, deductibles, and terms sufficient to satisfy the requirements of this Stipulation and applicable law.
2.6 Ashford has the experience, resources, and qualified personnel necessary to administer an estate of the size, complexity, and nature of the Estate of Teodoro R. Fonseca, and will devote such time and resources as are reasonably necessary to fulfill its duties and obligations under this Stipulation.
STIPULATION AND AGREEMENT
The undersigned parties, by and through their respective counsel of record, and Ashford Fiduciary Services Inc., by and through its principal officer, hereby stipulate and agree to all of the foregoing terms and conditions. The parties respectfully request that this Court enter the [Proposed] Order Appointing Neutral Estate Administrator attached hereto as Exhibit A and incorporated herein by this reference.
This Stipulation may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be deemed original signatures for all purposes.
CALDERWOOD & HARKNESS LLP
Dated: March 22, 2023
By: ________
Howard Quinn, Responsible Partner Attorneys for Petitioner Marguerite D. Fonseca 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200
Email: hquinn@calderwoodharkness.com
BRENNAN, ORTEGA & SALDÍVAR LLP
Dated: March 22, 2023
By: ________
Damian R. Ortega, Partner Attorneys for Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100
Email: dortega@bos-law.com
CONSENT AND ACCEPTANCE OF ASHFORD FIDUCIARY SERVICES INC.
Ashford Fiduciary Services Inc. hereby consents to its appointment as neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, and accepts all duties, obligations, and responsibilities set forth in the foregoing Stipulation. Ashford acknowledges that it has read and understands the Stipulation in its entirety and agrees to be bound by all of its terms and conditions.
ASHFORD FIDUCIARY SERVICES INC.
Dated: March 22, 2023
By: ________
Gerald Whitmore, Principal Officer 600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Telephone: (213) 555-9350
Email: gwhitmore@ashfordfiduciary.com
EXHIBIT A
[PROPOSED] ORDER APPOINTING NEUTRAL ESTATE ADMINISTRATOR
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
PROBATE DIVISION
The Court, having reviewed and considered the Stipulation and [Proposed] Order for Appointment of Neutral Estate Administrator filed on March 22, 2023, by Petitioner Marguerite D. Fonseca, through her counsel Calderwood & Harkness LLP, and Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca, through their counsel Brennan, Ortega & Saldívar LLP, together with the consent and acceptance of Ashford Fiduciary Services Inc., and having considered the recitals and stipulated terms set forth therein, and good cause appearing therefor,
IT IS HEREBY ORDERED AS FOLLOWS:
1. Ashford Fiduciary Services Inc. (Gerald Whitmore, Principal Officer), with principal offices at 600 Wilshire Boulevard, Suite 1450, Los Angeles, California 90017, is hereby appointed as the neutral administrator of the Estate of Teodoro R. Fonseca, Deceased, pending resolution of the disputes in this proceeding, whether by settlement, mediation, trial, or other adjudication.
2. Ashford Fiduciary Services Inc. shall have all of the powers and duties set forth in the Stipulation filed concurrently herewith, subject to the limitations, restrictions, and conditions contained therein, including but not limited to the powers and duties described in Section 1.2 of the Stipulation (preservation of estate assets, business interest oversight, collection of income and distributions, payment of estate obligations, restrictions on asset disposition, and cooperation with appraisers, accountants, and other professionals).
3. Ashford Fiduciary Services Inc. shall be compensated for its services as neutral administrator as set forth in Section 1.3 of the Stipulation, as follows:
(a) A monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00), to be shared equally by Petitioner and Contestants, with Petitioner paying Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month and Contestants paying, jointly and severally, Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month; and
(b) An annual asset-based fee of fifteen hundredths of one percent (0.15%) of the aggregate fair market value of assets under administration, calculated as of the last business day of each calendar year or the date of termination of appointment, payable from estate funds within thirty (30) days of such calculation date.
4. Ashford Fiduciary Services Inc. shall furnish a surety bond in the amount of Five Hundred Thousand Dollars ($500,000.00) within fifteen (15) calendar days of the date of this Order. The cost of the bond premium shall be paid from estate funds. Failure to furnish the required bond within the time prescribed shall constitute grounds for vacating this Order and Ashford's appointment.
5. Ashford Fiduciary Services Inc. shall file quarterly reports with this Court, and provide copies to counsel for all parties, as set forth in Section 1.4(a) of the Stipulation, within thirty (30) days of the end of each calendar quarter.
6. The Petition for Letters of Administration filed by Marguerite D. Fonseca on October 5, 2022, is hereby held in abeyance insofar as it seeks appointment of Petitioner as administrator of the estate, pending further order of this Court. Nothing in this Order shall be construed as a denial of the Petition or a determination of Petitioner's entitlement to serve as administrator.
7. All rights, claims, defenses, and positions of all parties with respect to the merits of the contest—including but not limited to the characterization of estate assets, the existence and enforceability of the alleged premarital agreement, the validity and priority of creditor claims, and the entitlement of any party to serve as permanent administrator—are expressly preserved and are not affected or adjudicated by this Order.
Dated: ____
________________________________________
JUDGE OF THE SUPERIOR COURT
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I, the undersigned, declare as follows:
I am employed in the County of Los Angeles, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is 350 South Grand Avenue, Suite 4800, Los Angeles, California 90071.
On March 22, 2023, I served the foregoing document described as STIPULATION AND [PROPOSED] ORDER FOR APPOINTMENT OF NEUTRAL ESTATE ADMINISTRATOR on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid, in the United States mail at Los Angeles, California, and/or by electronic transmission via electronic mail, addressed as follows:
Howard Quinn Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200
Email: hquinn@calderwoodharkness.com
Attorneys for Petitioner Marguerite D. Fonseca
Damian R. Ortega Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067 Telephone: (310) 555-4100
Email: dortega@bos-law.com
Attorneys for Contestants Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca
Gerald Whitmore Ashford Fiduciary Services Inc. 600 Wilshire Boulevard, Suite 1450 Los Angeles, California 90017 Telephone: (213) 555-9350
Email: gwhitmore@ashfordfiduciary.com
Dennis Chua, CPA Ridgeway Accounting Partners LLP 515 South Flower Street, Suite 3600 Los Angeles, California 90071 Telephone: (213) 555-2800
Email: dchua@ridgewayaccounting.com
Estate Accountant
[BY MAIL] I caused such envelope(s) to be deposited in the mail at Los Angeles, California. I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in the affidavit.
[BY ELECTRONIC TRANSMISSION] Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the document(s) to be sent to the persons at the electronic notification addresses listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.
I declare under penalty of perjury under the laws of the State of California that the above is true and correct.
Executed on March 22, 2023, at Los Angeles, California.
________________________________________
Name: ____
In re the Estate of | Case No. 22STPB09714
TEODORO R. FONSECA,
STIPULATION AND [PROPOSED] ORDER
Deceased. | FOR APPOINTMENT OF NEUTRAL
ESTATE ADMINISTRATOR
Date: March 22, 2023
Dept.: 5
Judge: Hon. Patricia Yamamoto
In re the Estate of | Case No. 22STPB09714
TEODORO R. FONSECA,
[PROPOSED] ORDER APPOINTING
Deceased. | NEUTRAL ESTATE ADMINISTRATOR

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

PROBATE DIVISION

RECITALS

STIPULATED TERMS

REPRESENTATIONS OF ASHFORD FIDUCIARY SERVICES INC.

STIPULATION AND AGREEMENT

CALDERWOOD & HARKNESS LLP

BRENNAN, ORTEGA & SALDÍVAR LLP

CONSENT AND ACCEPTANCE OF ASHFORD FIDUCIARY SERVICES INC.

ASHFORD FIDUCIARY SERVICES INC.

EXHIBIT A

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

PROBATE DIVISION

IT IS HEREBY ORDERED AS FOLLOWS:

JUDGE OF THE SUPERIOR COURT

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

Record

Parties

Dates

Amounts