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MJ Estate Third Accounting - Document & Summary & Discussion

First post is updated with more info and the documents as it can be seen below

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Edited to add

- At the end of summary of account it is stated that gross receipts between January 1 2013 and November 30 2013 is $60,815,512.

- There's no loan payment for Lindley condo (aka Hideout) in the third accounting. Given that second accounting showed mortgage payments in the amount of $387,785, it is safe to assume that the Lindley condo mortgage is also paid.

- Estate has paid $74,372 for Domain Search and Renewal fees.

- Total legal fees are hard to calculate as the payments for them happen on account and before the Estate accounting gets filed. For 2012 legal bills show $95,392 for Litigation related expenses and $3,901,065 for legal expenses. For January 2013 to October 2013 the legal expenses are $4,992,839 plus legal fees at United Kingdom, Germany and Japan (which I did not convert to US dollars and aren't added to the total amount).

- Estate paid a law firm for services in UK in "Thriller Live" matter


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Soundmind said:
When Prince and Blanket wear the same clothes for months; same t-shirts , shoes, pants...etc .Not to mention Blanket's teeth . You can't but wonder where the hell did $ 3 + millions go . Not on fancy clothes for sure

If it's not a loan , it's a "consultancy fee". Obviously for the second year in row her allowance is higher than the three kids combined, if we assume of course she spend their allowance on them.

No wonder Jermaine rides a Ferrari.
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And she had the nerve to be asking fans for donations for that documentary, to supposedly pay the Estate for copywrites.
 
Interest in MJ won't last forever, at least it won't be as strong as it has been for the last five years. Instead of wasting millions of dollars to buy their piece of mind , the executors need to invest into new ventures for the kids. When you have that kind of cash, you invest and create more channels to generate money.

Before anyone jumps on me , this is exactly what MJ did , he invested in stocks , tried the movie route , entertainment with al-Walid Bin Talal.....etc. MJ won't generate hundreds of millions every year .

No one comes to tell me the kids are set for life. We have many cases of billionaires who went bankrupt.The kids are not even billionaires.
 
I just read the book about the Broken Heart Stone and its incredible journey. It is the original placed at graumans. The Estate purchased it from the owner for the occasion, Its amazing how it came into their hands as well. What a beautiful story.
 
The estate has done really well but it really bothers me the way they're washing Katherine's debt away. I knew she would never pay the $6 mil but I've never thought they will pay her millions for consulting fees? What kind of consulting can she offer? That money could have helped some charity org, and I know they can't give any money to charity until they pay all the debts, but if they are gifting money to Katherine why not to some org where people who really need it can benefit. Katherine's needs are covered by the estate, the big extras she's getting is just to satisfy her greed IMO. I'm kind of disappointed.
 
The Estate goes easy on KJ, because she is a beneficiary of Michael's Will, and also his mother.
 
Ivy, while I appreciate the background you gave for how Katherine incurred this debt, I am glad one of the executors’ roles is to simply manage debt and not judge if they will manage Katherine’s and/or Michael’s debt based on how it was created. Many Americans in debt receive guidance and management by debt counselors and credit entities regardless of how they incurred their debts. Managing Katherine’s debt is a form of caring for her financially as per the will and I truly believe these well compensated executors have an understanding with this particular beneficiary.

Qbee, Ivy, I did not know there were two stones at TCL Chinese Theater. Good to know the original stone is there. I hope to see both stones one day.
 
Lena Lucy said:
The Estate goes easy on KJ, because she is a beneficiary of Michael's Will, and also his mother.
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Agree with this. I think both Branca and McClain would know how Michael would look at her debt and ALL her needs and want to take care of her. IMO they are treating her as they believe her son would. When she passes, their focus will be solely on the children.
 
I saw

Michael (and now his Estate) has 87.5% undivided membership in Neverland

I actually don't understand this. I heard that some saying Neverland now is controlled by the investment company. MJE has minority share in Neverland. they even told me the company once wanted to sell Neverland, Estate advised them not to but can't prevent them from doing so. They said Estate actually don't have say in Neverland.

So I don't understand but 87.5% share still may make fans think Neverland is controlled by Estate.

Believe me, I heard it from a very high level source.
 
mkgenie;3962934 said:
I saw

Michael (and now his Estate) has 87.5% undivided membership in Neverland

I actually don't understand this. I heard that some saying Neverland now is controlled by the investment company. MJ has minority share in Neverland. they even told me the company once wanted to sell Neverland, Estate advised them not to. They said Estate actually don't have say in Neverland.

So I don't understand but 87.5% share still may make fans think Neverland is controlled by Estate.

Believe me, it's very high level source.
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It's a very tricky situation given that we don't have access to the deal between MJ and Colony Capital. What we know is Colony Capital paid the mortgage that was about to be defaulted. They also took over maintenance and care of Neverland - which MJ had to pay to them. We also know that the deal gives Colony Capital the full use of Neverland. So I would agree that the management of Neverland is controlled by Colony Capital. Also based on the fact that we don't see any Neverland related expenses on Estate accounting.

Regardless whether Estate run/ control Neverland or not, their interest in Neverland is listed as one of the primary assets of Estate. So the 87.5% membership interest is true number. What it means that for example if it is sold Estate would get 87.5% of the sales price minus the debts to Colony Capital (mortgage and repair and maintenance fees).

I mean this is getting quite technical and confusing. But regardless some info below. It will show that everything depends on the operating agreement between Colony Capital and MJ which we don't know at all.

The Trusts should place their real estate assets into a Limited Liability Company (“LLC”) and receive membership interests in proportion to the value of the real estate contributed to the LLC. When the Trusts liquidate and distribute the LLC interests to the beneficiaries, those interests will be comprised of membership interests in an LLC and not undivided individual ownership interests in the real estate assets themselves. This will allow the LLC to manage the real estate assets in one entity, in much the same manner as the Trusts are currently managing those assets.

B. The Advantages to Using an LLC to Manage the Real Estate

1. Continuity of management and professional management.

2. Rights of members to sell, encumber or assign their respective interests may be restricted by agreement.

3. Rights of members to partition and sell the properties or to receive an undivided interest in the properties may be eliminated.

6. Use of agreements to purchase each other’s interests, such as a first right of refusal or repurchase agreements at a substantial (50%) discount, are available to the members. Ability to sell the interest or pass it on to the members’ heirs.


C. The Disadvantages to Using an LLC

2. Owning a membership interest in an LLC, rather than an outright undivided ownership interest in property, will cause a loss of certain individual rights that may affect the real property. Individuals have the power to force the sale of property held as tenants in common. The limitations on members imposed by an LLC operating agreement (an operating agreement is similar to a partnership agreement) translate into legally enforceable restrictions that could impact the minority of members, should a disagreement develop among the members.

3. There would also be a loss of the power to affect the management of the properties held in the LLC. Members will vote as though they were limited partners rather than as direct owners of the properties, and unless the majority agreed to a particular action, individual members could not compel a particular course of action.
 
LMAT said:
Agree with this. I think both Branca and McClain would know how Michael would look at her debt and ALL her needs and want to take care of her. IMO they are treating her as they believe her son would. When she passes, their focus will be solely on the children.
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Would he really? Michael had years and years time to pay KJ debt to Segyen Times, but for some reason he chose not to help KJ. He only paid back his own share, but didn't pay KJ, Joe or Jermaine's debt to Koreans, and I fully understand why. He got fed up that they are making deals on his behalf and taking bribes from Koreans, so those 3 dug themselves deep and MJ wanted them to dig themselves out of the hole that was their own doing.
 
Soundmind said:
When Prince and Blanket wear the same clothes for months; same t-shirts , shoes, pants...etc .Not to mention Blanket's teeth . You can't but wonder where the hell did $ 3 + millions go . Not on fancy clothes for sure

If it's not a loan , it's a "consultancy fee". Obviously for the second year in row her allowance is higher than the three kids combined, if we assume of course she spend their allowance on them.

No wonder Jermaine rides a Ferrari.
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Second accounting:Nov 2010-Dec 2011
kids allowance $2,139,194
Katherine allowance $470,814

Now:
Kids allowance $3,064,009
Katherine allowance $1,386,548

I would understand that kids allowance going up 1 million as they are growing up and have plenty of hobbies and when they go on their hobbies or holidays, there are tons of cousins to go with them and most likely PPB is picking the tab for all of them.

That increase of million is huge, and KJ needing $115,000/month considering that is only for her use? Calabasas utilities, bodyguards and other staff are paid separately, so where can over 80 year woman spend that amount of money/month? She is always wearing same clothes, have the same wig so there is no hairdressing costs. The only thing she would spend money is make-up and nails, but to spent that amount money per month for make-up and nails is impossible.

Yeah, I suppose some of her/PPB money goes to support Joe and cubs.
 
Katherine Jackson paid $ 6,638 interest and $193,362 principal payment on these loans from a consulting fee she was paid by the Estate (see below for details).

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so katherine isnt paying anything. the estate gives her money for some "consulting" and she gives them some of the money back. nice little agreement there. the amount of money that is being thrown about and no doubt being used to pay for the rest of the family is imo immoral.
 
Last week in Philadelphia broke that Sony/Atv were getting ready to purchase the Kamble Huff catalog. Internet in Michael may fade but interest in that catalog never will
 
Bubs said:
Would he really? Michael had years and years time to pay KJ debt to Segyen Times, but for some reason he chose not to help KJ. He only paid back his own share, but didn't pay KJ, Joe or Jermaine's debt to Koreans, and I fully understand why. He got fed up that they are making deals on his behalf and taking bribes from Koreans, so those 3 dug themselves deep and MJ wanted them to dig themselves out of the hole that was their own doing.
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Katherine and Joe applied for bankruptcy instead. Slightly off topic but I'm interested how bankruptcy works, if the Koreans could still apply for the payment couldn't all the other people Joe and Katherine owed money to at the time of the bankruptcy also seek settlement?
 
In this accounting there is actual break down of the PPB and KJ's allowance.
On page 50, I was looking that Ribeira (KJ's attorney) was paid holiday allowances:
*06/26/2012 $16,022.13
08/23/2012 $31,429.92
09/21/2012 cash $3,000.00
10/08/2012 $27,000.00
10/08/2012 xxxGroup Inc. $15,626.46
12/18/2012 $255,093.31

Seemingly KJ attorney is controlling kids allowance, which is fishy as they come, especially when you look at the dates. Kids should have independent attorney to look after their allowance and keep on track. Secondly I was wondering that one of the holiday was dated the same day when Prince went on twitter accusing family members stopping them from contacting KJ? They didn't go on holidays that summer as after them granny-napping episode was over, it was time to go to school.
Only one of the amount of money was paid directly to the holiday organiser, but otherwise all the money went directly to Ribeira.
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Payments to Hydrex pest control must have been fend off Randy and Co:)
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Does anyone know what is that Desert Auto LLC?
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The estate still have Train and Carousel. Good, PPB might do something with them in future or have them for their own kids in time, as well there is 3 Rolls Royces waiting for them when they grow up.
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Seemingly the estate doesn't pay all of KJ legal fees as there seems to be loans to KJ to pay her legal fees, not that she is going to pay it back anyway, but at least money is not just forked over.
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Education related expenses are around $148,310
Holiday expenses $348,171.82

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Interesting tidbit, the estate received $2,400 royalties from Michael's share of J5, so cubs doesn't get even that much.
 
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LastTear said:
Katherine and Joe applied for bankruptcy instead. Slightly off topic but I'm interested how bankruptcy works, if the Koreans could still apply for the payment couldn't all the other people Joe and Katherine owed money to at the time of the bankruptcy also seek settlement?
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I don't know how it works but here are some information:
http://wills.about.com/b/2010/07/06...ll-katherine-jackson-lose-her-inheritance.htm

I thought once you go bankruptcy, debts are wiped out?
 
Thanks for the summary and explanations, Ivy. Excellent as always. No way could I have otherwise understood a lot of this stuff.
 
Bubs said:
I don't know how it works but here are some information:
http://wills.about.com/b/2010/07/06...ll-katherine-jackson-lose-her-inheritance.htm

I thought once you go bankruptcy, debts are wiped out?
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thanks Bubs, I'm interested as this wasn't the only lawsuit debt at the time of bankcruptcy, I believe there was one that was 3 x the original amount awarded.

Together with the fact the estate is in probate, which would prohibit the estate from dishing out large lump sums, I suppose they would also have set this up as a loan as it wasn't only Katherine's debt, it was also Joes and Jermaines.
 
ivy;3962830 said:
Long answer: Probate is the process when decedents (MJ's) debts have to be paid before any money that can be given to the beneficiaries. (this is also partially the reason why there hasn't been a charity donation yet). So as still there's debts to be paid, creditor claims to solve, Estate tax to pay and so on, Estate cannot simply hand money to the beneficiaries. Also per MJ's will Estate isn't required to pay Katherine's past debts so that's not something they can justify to court as something they need to pay during probate process. I believe that's the reason the $6 M + given to Katherine is labelled as a "loan". I believe it is also obvious that Estate doesn't expect Katherine to pay it back. The very low amount of interest as well as paying Katherine consultant fees and using a small part of that consultant fees to pay back the initial loan - in other words giving her more money to pay back the initial loan and nothing coming out of her own pocket to pay the initial loan - demonstrates this to me.
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The money what KJ and kids are receiving at the moment, is it called “interim distribution”?
I know that the estate cannot distribute any money to the charity because it is still on probate, but KJ and kids are receiving allowance before the probate closed, and as MJ named children's charity as 1 of 3 beneficiary in his Will, shouldn't that charity be entitled to “interim distribution” too?


LastTear;3963024 said:
thanks Bubs, I'm interested as this wasn't the only lawsuit debt at the time of bankcruptcy, I believe there was one that was 3 x the original amount awarded.

Together with the fact the estate is in probate, which would prohibit the estate from dishing out large lump sums, I suppose they would also have set this up as a loan as it wasn't only Katherine's debt, it was also Joes and Jermaines.
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You have to wait when Ivy comes, she can explain why Moonies got their money but not other creditors:)

I wonder if the other creditors didn't seek judgement against KJ and Joe, but Segye did?
"The paper originally won a $4 million judgment against Katherine and others for failing to deliver on a promised Jackson family concert -- but with interest she would owe more than $14 million.

Read more: http://www.tmz.com/2011/10/05/micha...million-dollar-settlement-loan/#ixzz2txpCVuo5

Question to Ivy regarding this bit:
There are strings attached -- according to court docs, Katherine must repay the full amount to the Estate, plus interest, within one year. But check this out -- she got a hell of a deal -- the interest rate is only .16%.

Whats up with this, and seemingly the loan has not been paid back in full?


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It kills me to think that estate loaned that money to KJ pay Segye debt, and I'm pretty sure MJ would be spinning in his grave if he knew that his money was used to pay Jermaine and Joe's debts, and even KJ's, not to mention that they also loaned money for KJ to pay Jermaine's child support :puke:

Edited to add. Ivy posted this in first page:
"After almost two decades that debt became $12 Million which half of it was Katherine's responsibility. Segye Times was going after Katherine as well as Joe and Jermaine trying to collect the money from any and all deals they were doing after MJ's death."

I understand that only KJ part of Koreans was paid, but Joe and Jermaine's debt still stands?
 
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They are buying their peace of mind using mj's money. If they really cared about the kids they would have requested someone independent to oversee how their allowance is spent. I am afraid the judge would look at the ludicrous amounts wasted on everyone and tell himself why not allow Wade Robson to have his day before a jury, there is enough money to share with everyone.
 
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Soundmind said:
They are buying their piece of mind using mj's money. If they really cared about the kids they would have requested someone independent to oversee how their allowance is spent. I am afraid the judge would look at the ludicorious amounts wasted on everyone and tell himself why not allow Wade Robson to have his day before a jury, there is enough money for everone to share.
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I'm mostly happy how executors carries out their duties, but I wish they would stop loaning money to KJ and get someone independent to look after kids allowance.
 
I also don't like how they are throwing millions on KJ that she doesn't need and that MJ wouldn't have given her if he was alive. Money that are likely going to her cubs instead of the third beneficiary - charities.
 
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Chapter 7 can wipe out your debts, depending on nature of debt and assets. (Easier back then than now.) However, some debts are never dischargeable and creditors can dispute the discharge of others. For example, debts obtained by fraud or false pretenses might not be discharged; up to the Judge.



This is from Radar Online in 2008:

Michael Jackson’s parents have just recently come through their extremely complex and much-challenged bankruptcy proceeding. The couple filed for Chapter 7 Bankruptcy on March 1, 1999, and although their debts were “discharged” on June 13, 2000, there were so many adversarial motions from creditors, there were still filings coming in as of May 22, 2008, according to court documents obtained by RadarOnline.com.

In their initial petition, the Jacksons listed their assets in the $100,000 - $500,000 range and their estimated debts in the $10 - $50 million range.

Among the debts: $34,91602 was owed on a 1994 Mercedes Benz, $60,130.94 on a 1998 Land Rover, and $36,368.29 on a Land Rover Discovery. $32,561.06 was owed on personal income taxes to the State of California, and they were in to the IRS for $117,871.76. They owed $18 million on one lawsuit judgment and $4 million on another. They owned legal fees to several attorneys including Brian Oxman, who still works with them.

One interesting side note: the couple claimed “month to month tenancy only” on their residence in Encino, CA which they point out is owned by their son.
 
^^^^^^ Thanks Krikzil, I guess without seeing the full judgement on the bankruptcy we won't know, but I'm curious why only one lawsuit judgement appeared following Michaels death which turned around the finances of Katherine (all the Jacksons for that matter) and not the other.
 
LMAT said:
Agree with this. I think both Branca and McClain would know how Michael would look at her debt and ALL her needs and want to take care of her. IMO they are treating her as they believe her son would. When she passes, their focus will be solely on the children.
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Bubs said:
Would he really? Michael had years and years time to pay KJ debt to Segyen Times, but for some reason he chose not to help KJ.
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As far as Segye Times goes I'm not sure if MJ would pay that simply because he didn't. He settled for himself, returning the $1.5 M advance but he did not pay for the $4 M that KJ, Joe and JJ got. That debt stayed for decades. That debt is a significant reason why KJ and Joe filed for bankruptcy. So I'm not sure if he would pay if he was alive. Also from everything we learned (during depositions) yes Michael cared for her mother but it didn't look like he gave her millions and millions upfront.

Soundmind said:
Interest in MJ won't last forever, at least it won't be as strong as it has been for the last five years.
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Justthefacts said:
Last week in Philadelphia broke that Sony/Atv were getting ready to purchase the Kamble Huff catalog. Internet in Michael may fade but interest in that catalog never will
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I think the interest in Michael would still be there but not as much as the first years. Estate reported income shows this $310 M gross first accounting, $145 M gross second accounting, $77 M gross in third accounting and it seems like fourth year would be $60-$80 M gross range. So it'll level. Think about Elvis Estate and so on, it's been decades after his death and it still earns decent money. It's not hundreds of millions but there's a constant income source.

No one comes to tell me the kids are set for life. We have many cases of billionaires who went bankrupt.The kids are not even billionaires.
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I believe MJ's will set in a way to protect for that. Once the debts paid the catalogs and the projects such as Cirque etc should bring steady income. It would not be hundreds of millions per year probably, but it should be enough to care for generations to come - if properly managed and maintained of course.


LastTear said:
Slightly off topic but I'm interested how bankruptcy works, if the Koreans could still apply for the payment couldn't all the other people Joe and Katherine owed money to at the time of the bankruptcy also seek settlement?
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Krizkil explained nicely but a little addition. There are two types of bankruptcy in US. Chapter 11 and Chapter 7. Chapter 11 is known as reorganization of debt. For example you have a debt that's due and you can't pay it, if you declare chapter 11 they would reorganize the debt such as for example give you 5 more years to pay it back. In other words they try to organize it, restructure it, arrange it in a way that you can pay. Chapter 7 is known as liquidation which means all of the assets are sold to pay the debt and if you don't have enough assets some debt might get forgiven. There are a lot of exceptions. But we know that Segye Times debt has survived any bankruptcy and still active.

Bubs said:
You have to wait when Ivy comes, she can explain why Moonies got their money but not other creditors:)

I wonder if the other creditors didn't seek judgement against KJ and Joe, but Segye did?
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That would be my guess too. Segye does have a court judgment against them

I understand that only KJ part of Koreans was paid, but Joe and Jermaine's debt still stands?
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that's my understanding because Segye kept filing that judgment in cases such as trying to get from Jermaine's book income or filing notice and Joe's lawsuit against Murray. In other words Segye was trying to get money from Joe and Jermaine too.
 
elusive moonwalker said:
Katherine Jackson paid $ 6,638 interest and $193,362 principal payment on these loans from a consulting fee she was paid by the Estate (see below for details).

===========================

so katherine isnt paying anything. the estate gives her money for some "consulting" and she gives them some of the money back. nice little agreement there. the amount of money that is being thrown about and no doubt being used to pay for the rest of the family is imo immoral.
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And it's against Michael's wishes
 
krikzil said:
In their initial petition, the Jacksons listed their assets in the $100,000 - $500,000 range and their estimated debts in the $10 - $50 million range.

Among the debts: $34,91602 was owed on a 1994 Mercedes Benz, $60,130.94 on a 1998 Land Rover, and $36,368.29 on a Land Rover Discovery. $32,561.06 was owed on personal income taxes to the State of California, and they were in to the IRS for $117,871.76. They owed $18 million on one lawsuit judgment and $4 million on another. They owned legal fees to several attorneys including Brian Oxman, who still works with them.
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Why those 2 needed 3 cars, especially when KJ doesn't drive?
No wonder they are hounding MJ's estate if those 2 managed to make up debts 10-50 million :bugeyed
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Second accounting:Nov 2010-Dec 2011
kids allowance $2,139,194
Katherine allowance $470,814

2012:
Kids allowance $3,064,009
Katherine allowance $1,386,548

2012 KJ's allowance has tripled since 2011, by now her allowance could be more than $2 million.
 
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