... Situation is So Desperate that CEO Fred Coulston Attempts to Use Lab's Insurance Money to Pay Off Personal Debt on Home.

Alamogordo, NM (June 27, 2002) - Recently obtained lawsuit documents and the latest IRS financial statement filed by The Coulston Foundation reveal the extent of the New Mexico primate testing lab's financial collapse, In Defense of Animals announced today. IDA's release of the documents comes on the heels of paychecks bouncing at the lab and USDA findings that Coulston cannot afford proper equipment, staff, fruit and toys.

In March 2002, Coulston sued First National Bank of Alamogordo (and lost) in an attempt to obtain $425,000 in insurance money paid out as a result of a fire that occurred at the lab in September 2001. The insurance proceeds were frozen by the bank pending the outcome of the foreclosure lawsuit it filed against Coulston in December 2001 for over $1.1 million in unpaid loans. Copies of the suit documents are available at http://www.vivisectioninfo.org/Coulston/coulstonvfnb.pdf

Coulston's suit, which was dismissed just two months after it was filed, requested the bank to authorize CEO Fred Coulston to use $38,000 of the initial $50,000 insurance check to pay the mortgage debt on his personal home. The check, however, was made out to the Foundation, not Coulston personally. Coulston had used the personal mortgage to secure loans for the lab. The suit also requested that the bank drop the foreclosure action because of the difficulties it allegedly made for Coulston's attempts to find a buyer for the lab.

"Fred Coulston's attempt to use Foundation money to pay his personal mortgage indicates just how desperate the situation has become," said IDA Research Director Eric Kleiman. "If Coulston has trouble paying $38,000, how can he possibly continue to prop up a lab into which he has sunk over $7 million?"

Coulston's latest financial statement, filed on May 14, 2002 with the IRS for the fiscal year ending June 30, 2001, shows that the lab's private income had dropped 46 per cent since 1998, that federal money from the National Institutes of Health - which ceased in June 2001 - comprised 53 per cent of the lab's income, and that Fred Coulston's personal loan to the foundation increased to over $1.5 million. The statement is available at http://www.vivisectioninfo.org/Coulston/financial/990.pdf

It also lists $1.1 million in debt payable to First National, despite Coulston's assertions in the foreclosure suit that the bank's claims to the money are groundless because loan documents had not been executed properly. In response, the bank accused Coulston of "breach of the duty of good faith and fair dealing."

"The Coulston Foundation's financial death spiral cannot be reversed," observed Kleiman. "The lab cannot conduct any testing sanctioned by the Food and Drug Administration. It lost over half of its income when the NIH stopped funding last June, continues to hemorrhage private clients, and is facing a fourth set of USDA charges filed last July for negligent chimpanzee deaths and other animal welfare violations."

"There is no way that Coulston can recover," Kleiman concluded. "The only option left is for the USDA to take over the lab and permanently retire the chimpanzees."

IDA is an international animal advocacy and rescue organization based in Mill Valley, CA.