However, a 1975 U.S. District Court ruling by Judge Oliver Gasch overturned the Bureau of Indian Affairs.
They determined that there may have been enough evidence of dubious activity to pursue lawsuits but proceeding with litigation would have cost more than would be recouped, [1998 Chairman Kurt] Engelstad said."
With The 13th's purchase of 51 percent ownership, MLK became a majority-owned subsidiary of the 13th, making it a "minority and economically disadvantaged business enterprise[s]" under the Small Business Administration's (SBA) 8(a) program,[3] and giving it a significant advantage in competing for government contracts.
However, it was not disclosed to shareholders that Norm Ream, who resigned from The 13th around the same time,[5] was named as part owner and treasurer of the new venture,[4] an apparent conflict of interest given his involvement shortly before as president and director in The 13th's buyout of MLK.
Kurt Engelstad, on the other hand, was instrumental in bringing The 13th Regional Corporation into the world of Mail Boxes Etc., which would later become UPS Stores.
He, along with Bent Petersen (from Montana), was managing the building of the northwest franchise base for Mail Boxes, Etc.
The Board of Directors during this period, however, authorized loans for hundreds of thousands of dollars to Engelstad and Peterson, to finance their increasing share of ownership of the operations.
2004 Audited Financial Statements revealed that in 2004 several checks, most signed by the then CEO (Ken Krajewski) and the office administrative assistant (Suzy Villegas) —and totaling over $2.2 million—left the company over several months in a deal that The 13th's Board of Directors claim that the then-acting CEO Krajewski "had no authority to enter into".
Liz Ross, Chairman of the Board, relieved Krajewski of his duties with pay pending an investigation.
Under federal law, The 13th Regional Corporation and its majority-owned subsidiaries, joint ventures and partnerships are deemed to be "minority and economically disadvantaged business enterprise[s]" (43 USC 1626(e)).