The Los Angeles Times had an interesting article this past weekend about the Michael Jackson Estate and a new legal hurdle it faces. The King of Pop certainly didn't do much to make it easy for his estate executors or his heirs. This development could add new fuel to the fire between his family and the music executive and lawyer in charge of his estate and trust.
As we've written extensively about before, Michael's mother, Katherine Jackson was in a nasty fight with the executors over control of the estate last year. That is, they were feuding until Katherine dropped the legal challenge and stepped aside. In fact, according to the LA Times article, she now feels executors John Branca and John McClain are doing "a very good job".
The problem is she believes that the cash allowance of $7,000 to $8,000 per month, which the pair gives her from the estate, is not enough. While the estate also pays other expenses for her as well as Michael's kids (adding up to millions of dollars, according to the estate's lawyer), Katherine wants more.
So she agreed to business arrangement with a Toronto businessman, Howard Mann, to lend the family's blessing to his efforts to profit from Michael Jackson memorabilia. Normally, someone like Mann would need estate approval, not the family's OK, to do this. But Mann feels that with Katherine on board, and a legal loophole, he doesn't need consent from the estate executors.
Why? It seems Michael had sued a company called Vintage Pop years ago to stop it from profiting from his memorabilia. The company had purchased a collection which originally was compiled by Katherine and Joe Jackson (which they lost when they filed for bankruptcy).
Michael ultimately decided to abandon the lawsuit against this company and stop paying his lawyers. When he did, Vintage Pop won the lawsuit "with prejudice", meaning Michael Jackson was legally prevented from suing the company for copyright infringement and related claims. In other words, once Michael lost one case against that company, he couldn't sue again.
That same prohibition also binds his estate. This means the estate executors can't sue Vintage Pop for similar claims, under a legal doctrine called "res judicata".
So how does this matter to Katherine Jackson and the Canadian man she granted her approval to (in exchange for several hundred thousands of dollars, of course)? He shrewdly bought Vintage Pop.
So now Mann claims that the legal protection Vintage Pop enjoys also extends to any Michael Jackson-related endeavors he wants to do using that company, just as it did for the prior owner.
In other words, he's going to use this legal protection, along with Katherine's approval, and hawk all sorts of Michael Jackson memorabilia. He's started with a book and calender, but plans a documentary and even remixed music tracks. Because Mann's MJ items come from a collection owned by Vintage Pop, the legal ruling will protect him, he believes.
Branca and McClain, and their attorney, feel otherwise and promise that Mann's day of reckoning in court will come. They think Mann's legal theory is creative, but wrong.
So certainly, they will sue Mann.
What will Katherine do when they sue? She enjoys a 40% beneficial interest in Michael Jackson's Estate and Trust, while she's alive. So she obviously wants Branca and McClain to continue making money. But she also has this side deal with Mann, of whom she says she's "very pleased" because he's "been very good to me."
And for now, according to that same LA Times article, the King of Pop's estate still has more debt than assets, despite the huge movie and record deals in place. Forty percent of an insolvent estate is nothing. So maybe Katherine will support Mann. But, will she really want to alienate the executors who pay her living expenses?
It will likely be a very interesting new legal twist to follow in this never-dull estate.
The moral to all this? Listen to your lawyers! While worrying about legal troubles like this aren't something very many people will ever have to do, many people make the mistake, like Michael Jackson, of ignoring the advice of their lawyers and causing trouble for their estates when they pass.
For example, many people create a will or trust with a lawyer and then want to make changes, but they do it themselves and try to avoid paying their lawyer a second time. Or they fail to work with their attorney to fund their trust and undermine a big part of the value of a living trust (another Michael Jackson mistake!).
So don't do what Michael Jackson did when he walked away from his lawsuit against Vintage Pop. Work with your attorneys and follow their advice. If you hire someone experienced in estate planning, or probate litigation if the need arises, trust in him or her to protect you.
Posted by: Andrew W. Mayoras and Danielle B. Mayoras, co-authors of Trial and Heirs: Famous Fortune Fights! and co-founders of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law. Andrew and Danielle are husband and wife attorneys, professional speakers and consultants across the country. Follow us on Facebook and Google+.