LAW OFFICE OF DANIEL WATTS, ESQ.

2516 Albatross Way, Unit #1, CA 95815 danielwatts@gmail.com. (408) 256-2435

Via U.S. Mail To: Board of Directors, New Starship Foundation, and each director individually: RE: Huston Huddlestons mismanagement of the New Starship Foundation. Because of grave concerns about Huston Huddlestons mismanagement of the New Starship Foundation, the entire technical, creative and volunteer crew (the Crew) working on behalf of the Foundations bridge restoration project have retained me to assess the situation and provide my recommendations to you, the Board of Directors. I have reviewed the Foundations articles of incorporation, bylaws, amendments thereto, documents filed with the IRS, as well as email and Facebook correspondence between the Foundations members, volunteers, and Huddleston. I will summarize the allegations, which are indeed troublesome. Financial mismanagement. According to the documents I reviewed, including Huddlestons own statements to the Crew, Huddleston has spent the Foundations entire reserve of funds and then some. The last statement from Huddleston indicated that the Foundations checking account is $400 overdrawn, leaving it in a precarious financial position. The Crew was unaware of this situation until recently; since Huddleston has been less than transparent about the Foundations finances, I assume the Board was unaware as well. This alone justifies Board intervention. And despite the dire financial situation, Huston has on occasions used the promise of compensation as a means of retaining the Crew. This conflicts with the non-profits statements to the IRS, which indicate that volunteers will remain unpaid for the foreseeable future. Abuse of volunteers. According to reports from the Crew, Huddleston routinely verbally abuses the engineers, technicians, and designers who donate their time to this project. At least one volunteer reported that Huddleston publicly disparaged their work as shitty 1990s Nintendo graphics, and others complained that he verbally abuses them for perceived shortcomings which are almost always due to Huddlestons own logistical mismanagement. Volunteers say that when they politely protested Huddlestons mistreatment of them, he retaliated by venting his frustrations on Facebook and slandering them to others in the industry, which affected their reputation and future employment prospects. Obviously, this abuse does not engender the trust of the Crew, nor does it inspire future volunteers to work on this project. It does, however, open the Foundation to legal liability for any loss of earnings incurred by Huddlestons slander.

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LAW OFFICE OF DANIEL WATTS, ESQ.

2516 Albatross Way, Unit #1, CA 95815 danielwatts@gmail.com. (408) 256-2435

Logistical mismanagement. Part of the financial problems seem to stem from Huddlestons failure to properly plan ahead. The Crew has documented failures ranging from avoidable shipping delays to poorly executed convention appearances that embarrassed the Foundation; each of the Crew can provide more details on these problems. Suffice it to say, they are numerous and they have been damaging morale. False statements of endorsement. The Crew is concerned that Huddleston tends to overstate corporate and celebrity endorsements. They tell me that Huddleston has publicly invoked the endorsements of corporations and public figures without their knowledge or permission. This unprofessionalism reflects poorly on the Foundation, but could also open the Foundation to legal liability under the Lanham Act and Californias Businesses & Professions Code, among others, for the unauthorized use of others likenesses or trademarks. Disparaging the Board of Directors. When the Crew approached Huddleston with these concerns, he told the Crew that you the Board of Directors was too busy to intervene, and could not be bothered with the details of management or oversight of the Foundation. Huddleston told the Crew that you were not intended to be an active Board, and that you would only meet once or twice a year. If true, this is problematic, as it directly contradicts the statements the Foundation made to the IRS in its application for non-profit status. That paperwork states that the Foundation will meet at least four times this year, and the IRS will rely upon those representations in determining the Foundations non-profit status. Knowingly false representations in the IRS filings could subject the filer (including Huddleston himself) to significant liability. Presumably, Huddleston did not consult you before making such statements to the Crew or to the IRS. This, too, justifies a Board inquiry. Conclusion and Recommendations. The Crew has significant concerns about Huddlestons management abilities. They are not asking for money or titles or control; they are asking for the Board to split Huddlestons duties among several competent managers, or else to remove Huddleston from his position and replace him with a single competent manager. The Crew emphasized to me that they would love to continue working on this project, and their collective goal is to work with the board to make the Foundation an effective, efficient organization of which everyone involved can be proud. I would recommend the Board hold an open forum at its next meeting to allow the Crew to explain the problems in detail to the Directors, and to allow Huddleston to respond to the allegations. This meeting should happen as soon as possible; conveniently, the Foundations
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LAW OFFICE OF DANIEL WATTS, ESQ.

2516 Albatross Way, Unit #1, CA 95815 danielwatts@gmail.com. (408) 256-2435

bylaws state that the Board has a meeting scheduled for September. That would be the perfect venue for the Crew and Huddleston to present their arguments to the Board. The Foundation is a non-profit corporation with a duty to the public; it is not Huddlestons personal project, and if Huddleston is acting contrary to the Foundations interests, the Board has an obligation to curtail his day-to-day duties. Indeed, each Director could incur personal liability for tolerating known unlawful conditions.1 If you have any questions, please contact the crew at newstarshipcrew@gmail.com. Assuming the Board acts to rectify this situation, this letter should conclude my involvement in this matter.

Respectfully,

Daniel Watts, Esq.

Although the Foundations bylaws state that the Foundation will indemnify the Board of Directors

for Foundation-related activities, this is essentially a meaningless provision considering the Foundations financial state.
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