PH2\683206.2

IN THE UNITED STATES DISTRICT COURT FOR

THE EASTERN DISTRICT OF PENNSYLVANIA

__________________________________________

LEXINGTON INSURANCE COMPANY, : CIVIL ACTION

:

Plaintiff, :

:

v. : NO. 02-CV-4435

:

DAVID FORREST AND :

T. BEAUCLERC ROGERS IV, :

:

Defendants. :

__________________________________________:

A F F I D A V I T

I, David Forrest, being duly sworn according to law, depose and say that:

1. I am a defendant in this action. 

2. The Flashpoint Companies, a group of now insolvent entertainment financing 

companies, acted as venture capitalists, as well as assisting others in raising financing for the 

film, television, merchandising, and multi-media industries from approximately 1995 to early 

2001. Flashpoint’s principal achievement was raising funds for the production of in excess of 40 

films, as well as a television series, through the sale of future revenues to various Special 

Purpose Vehicle s (“SPV’s”), known as Hollywood Funding Numbers 1, 2, 3, 4, 5, and 6, which 

were wholly owned subsidiaries of Credit Suisse First Boston. The SPV’s in turn raised funds 

through the sale of notes issued by and enforceable against them. Pecuniary Loss Indemnity 

Policies, such as those issued by Lexington, covered the purchasers of the notes against any 

shortfall between the balance due on the notes and the assets of the SPV’s. 

3. In late 2000, Lexington obtained an injunction against Flashpoint due to the 

failure of Flashpoint to comply with the terms of certain collateral agreements for Hollywood

Case 2:02-cv-04435-AB Document 14 Filed 11/14/2002 Page 1 of 5
2

PH2\683206.2

Funding Numbers 4, 5, and 6 by failing to maintain approximately $9 million in cash in specific 

bank accounts, rather than as a combination of cash and other assets. The Court in England 

directed Flashpoint to place the cash into designated accounts, and Flashpoint’s inability to meet 

this requirement rendered it insolvent and resulted in the institution of Administration 

proceedings (the English equivalent of U.S. Chapter 11 bankruptcy proceedings) against 

Flashpoint in March 2001. 

4. From the inception of Flashpoint Ltd. (a Jersey company) in 1997 and 

subsequently Flashpoint (UK) Ltd and Flashpoint Investments, Ltd., until June 2000, I served as 

a director of each of these three companies and was involved in their day-to-day operations.

5. At no time have I served as a director of any of the United States companies in 

which Flashpoint invested. I may have been a director of CIGA (UK) Ltd., which existed for the 

sole purpose of holding the lease to Flashpoint offices in London, as well as Icestorm 

Entertainment, Inc., the Canadian operations based in Montreal.

6. In March 2001, I agreed to re-join the board of directors of one of the Flashpoint 

Companies, to assist the lone remaining director, Susan Wright, with certain administrative 

proceedings in England. No formal paperwork was filed with Companies House in England, 

reinstating me to the Board, so it is unclear whether, under English law, I served as a director at 

any point after June 2000.

7. I was not appointed to the position of Chief Executive Officer of any of the 

Flashpoint companies, nor to the position of Managing Director, a position more commonly 

found in U.K. companies, nor was I paid for such roles. 

8. I was a named shareholder in Flashpoint Ltd., Flashpoint (UK) Ltd., Flashpoint 

Investments, Ltd., and Icestorm Entertainment Ltd.

Case 2:02-cv-04435-AB Document 14 Filed 11/14/2002 Page 2 of 5
3

PH2\683206.2

9. I have never traveled to Pennsylvania for any business matter related to 

Flashpoint.

10. My only contact with Pennsylvania, with regard to Flashpoint, consisted of 

telephone conversations and telefaxes between me, from outside Pennsylvania and most often 

England, and T. Beauclerc Rogers in Pennsylvania.

11. My only other contact with Pennsylvania consists of non-Flashpoint business as 

follows:

(a) From 1973 to 1990, I worked in underwriting with various Lloyd’s 

syndicates in London. I did business with various parties in Pennsylvania and visited Pittsburgh, 

Pennsylvania from time to time, but no more than approximately ten times in total –

approximately five times for underwriting business, and approximately five times to visit friends.

(b) From 1990 to 1995, I worked as an insurance broker in England. I 

did business with clients and other brokers in Pittsburgh and visited Pittsburgh from time to time. 

During this time period, I visited Pittsburgh approximately five times. Each time, I stayed with 

friends, although I may have conducted some insurance broker work on each visit.

(c) I have visited the Eastern District of Pennsylvania only once, in 

approximately 1995 or 1996, when I attended a preparatory meeting with lawyers regarding a 

proceeding in New York for which I served as an expert witness.

(d) After the preparatory meeting, my only visits to Pennsylvania have 

been purely personal in nature, to visit the godparents of my children in Pittsburgh.

12. All the computers previously belonging to the Flashpoint Companies and to 

which I may have had access were left in the offices of Flashpoint after I finally left those offices 

and Flashpoint was put into Administration. 

Case 2:02-cv-04435-AB Document 14 Filed 11/14/2002 Page 3 of 5
4

PH2\683206.2

13. Before Flashpoint had offices in London, in late 1997, and subsequently when I 

occasionally worked from home on Flashpoint business, I used my personal computer to transmit 

or receive documents related to Flashpoint. In the English action, I was pressed by Lexington to 

give them access to that machine and, despite their efforts to force me to given them access to 

that machine as they dictated, I offered a voluntary undertaking that the Court in England 

accepted. However, soon thereafter, it became clear that Lexington was seeking to instigate 

these proceedings against me in the Eastern District of Pennsylvania, a fact that Lexington 

omitted to disclose to me and, more surprisingly, the Court in England. Upon further application 

to the Court in England, I have subsequently been released from my undertaking. 

14. To my knowledge, all other Flashpoint documents are in the possession of the 

Flashpoint Administrator in England.

15. To my knowledge, Lexington is not permitted to use documents obtained in 

discovery actions in England to support its Complaint in this action, nor will Lexington be 

permitted to divulge documents obtained in the actions in England in an attempt to prove its 

allegations in this action. 

Case 2:02-cv-04435-AB Document 14 Filed 11/14/2002 Page 4 of 5
5

PH2\683206.2

The foregoing is true and correct based upon my persona l information and recollection.

 

David Forrest

Sworn to and subscribed before me

this ____ day of ____________, 2002.

 

NOTARY PUBLIC

Case 2:02-cv-04435-AB Document 14 Filed 11/14/2002 Page 5 of 5