Michael JacksonHis affairs were in such “disarray” when he died in 2009 that he was more than $500 million in debt.
That monumental number came to light in new court documents obtained by ET and filed June 21 in Los Angeles County Superior Court by attorneys for the executors of the late pop star’s estate. The protocol is part of a petition to allow payment to compensate the executors’ lawyers and reimbursement of costs for the period from July 1, 2018 to December 31, 2018.
Court documents describe the “extraordinarily challenging circumstances” the “Thriller” singer’s executors faced when Michael died on June 25, 2009 after suffering cardiac arrest at his Los Angeles home. The executors allege that, among other issues, “Michael Jackson’s most significant assets were subject to more than $500 million in debt and creditor claims, with some of the debt accruing interest at extremely high interest rates and some of the debt in default.”
His executors allege that Michael “also incurred considerable expenses related to preparations for his ‘This is It’ concert tour” and, as a result, “his untimely death — virtually on the eve of that tour — left his estate with financial responsibility for approximately $40 million for the show’s promoter, AEG, and little hope of generating income from its already highly leveraged assets.”
Complicating the situation, the executors claim that “Michael Jackson or one or more of his entities has been the named defendant in a series of lawsuits in several states, including California, and several foreign countries” and that “more than 65 claims of creditors were lodged in the Property generating additional lawsuits.”
Lawyers for the executors in charge of Michael’s estate say they have gotten themselves into a mess because, prior to his death, “Michael Jackson had changed business managers, attorneys and personal managers several times in the years immediately preceding his death, most recently in the weeks and months leading up to his death, and the transfer of files to his final team of advisors and representatives was in transition at the time of his death.”
The executors claim that as such, Michael’s financial and legal documents have been “scattered throughout the country and the location of many documents has not been ascertainable.” They also claim in court documents that “although more than a decade has passed since Michael Jackson’s death, from time to time, the executors must deal with the consequences of the circumstances that existed at the time of Michael Jackson’s death.”
And although “the executors eliminated the Estate’s debt, resolved virtually all creditors’ claims and disputes, and successfully solidified the MJJ business (after negotiating with Sony in 2012 to buy a stake in EMU Music Publishing and then sell this stake in 2018 for $300 million) as a significant entity in the music industry, there are still challenging business, tax and legal issues that executors and their lawyers continue to deal with.”
That’s why, the executors claim, they want the court to “permit, authorize and approve compensation to the attorneys named below for extraordinary services rendered in the established amounts, which the executors believe represent the reasonable value of the services rendered,” totaling more than $500 million in payments to a litany of companies.
This is the latest development in a real estate battle among Michael’s family. In May, a document from the executors of the King of Pop’s will decreed that his beneficiaries (Michael’s three children – Prince Jackson27, Paris Jackson25, “Bigi” Jackson Blanket22 – and his mother, Katherine Jackson) will not receive distributions until the estate’s dispute with the IRS is resolved.
The executors instead suggested that until all disputes are resolved and litigation over the estate tax return is concluded, the estate continues to support Katherine and the children through “child allowance.”
Katherine had already accused the executioners of trying to maintain tight control over the money that the estate distributes to the trust and, in turn, its beneficiaries. She stated in court documents obtained by ET that “it appears clear to (her) that the Executors are holding all of the Estate’s assets to maintain control over them and to prevent a more liberal distribution of the Trust’s requirements.”
The accusation came in the midst of his own legal battle with his grandson, Bigi, over the cost of legal fees.
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