[ad_1]
Dave Bennett/Getty Images
The not-so-secret $600 million sale of Michael Jackson’s music assets to industry giant Sony was the subject of a heated hearing in a Los Angeles court on Friday, with Katherine Jackson’s lawyers arguing that co-executors The estate of John Branca and John McClain should be held “in contempt” for closing the deal while still appealing a ruling on the matter.
The dazzling sale, first reported by Billboard and confirmed on Friday by Rolling Stone, was negotiated by the executors to take advantage of an asset market that was “by far” the “most active that has ever existed,” says a recent appeal brief filed by the estate. The pact supposedly allows the estate to maintain “effective control over Michael’s music” while diversifying its range of assets, the document reads.
Although the exact terms of the agreement remain sealed, the estate remains in control of “all critical decisions related to the exploitation of Michael’s name, image and likeness, to protect and preserve his legacy,” the estate says. It will also “continue to exercise daily control over the marketing and monetization of the estate’s trademarks and related rights,” the recent appeal brief reveals.
On Friday, an attorney for Katherine said he believes the deal, which was finalized in recent months, represents a violation of court orders because Katherine’s appeal of an earlier ruling on the transaction is still pending.
“On March 1 I sent a letter to the estate requesting an explanation as to the authority they used as a basis to proceed with the transaction, and – crickets. No response. We don’t understand why this is not contempt of this court,” said attorney Robert E. Allen. He proposed setting a hearing date to address the issue of holding co-executor John Branca in contempt.
But Los Angeles County Superior Court Judge Mitchell Beckloff, who has been overseeing Michael Jackson’s estate since his death in 2009, said the executors had the authority to close the deal. He said it was true that Katherine’s appeal meant her “blessing” of the settlement had been put on hold, but he said the executors were free to move forward knowing they would be “personally in danger” if their actions led to lawsuits.
“I did not prevent them from carrying out the transaction,” the judge said. “The estate wanted an order that said they could continue with the transaction and be held harmless. They were asking for a blessing that they would not be personally liable for the transaction if they were sued. So now they are responsible for the transaction if they are sued.”
A lawyer for the estate said his side always knew it did not need the court’s permission to proceed, but sought that permission whenever possible. He said in this case, timing was important. “The executors have a very, very good reason for proceeding with the transaction,” real estate attorney Jeryll Cohen said without elaborating.
In the documents, executors say the estate was debt-ridden and on the brink of bankruptcy when Michael Jackson died. “Exercising the powers granted in Michael’s will, as confirmed by the probate court, they engaged in business transactions involving the assets of the estate that skyrocketed the value of the estate to more than $2 billion,” said the recent appeal filing signed by Michael. estate attorney Jonathan P. Steinsapir.
But problems remain, so the probate case is still open, meaning the trusts created for Michael’s three children and his mother have not yet been funded. One problem is a tax dispute with the IRS involving more than $700 million in alleged unpaid taxes and penalties. And Michael Jackson’s companies are again defendants in revived lawsuits by two of his sexual abuse accusers, Wade Robson and James Safechuck. The men claim the companies are responsible for their alleged abuse when they were children.
On Friday, Cohen said the executors were opposed to a six-figure legal bill presented to the estate by Katherine’s lawyers. One of her lawyers said the refusal amounted to revenge against Katherine for opposing the asset transaction.
“We would not be here if the estate was not trying to punish Katherine Jackson for having the temerity to question her actions. If these were attorney fees incurred to handle some other litigation, they would have paid it,” argued attorney Adam Pines of Glaser Weil. “What the executors seem to be doing is waiting for Mrs. Jackson to pass away.”
Cohen scoffed at that claim: “Executors do not pay beneficiaries’ attorney fees. “This is not about punishing Mrs. Jackson.” The judge, who will retire next month, set a follow-up hearing for March 22.