Department LA 5 Court Convened at: 8:30:00 AM 8/24/2011
Honorable Mitchell L. Beckloff
M. Dewey , Deputy County Clerk M. Manskar , Deputy Sheriff
J. Hollifield, CSR 12564 , Reporter
BP117321 110 JACKSON, MICHAEL JOSEPH - DECEDENT
Letters of Administr
ACCOUNT CURRENT
Petitioner(s): Branca, John McClain, John
Attorney(s): Hoffman, Paul Gordon, Esq.
Continuance Number: 2 Continuance From: Wednesday, July 13, 2011
Last Date Changed: Wednesday, August 24, 2011 9:01:44 AM
Last Note Changed By: SRILEY
To clear probate notes "filed documents" must be submitted to Rm 258, within time frames set forth in Rule 10.3 of LASC Rules. You may contact the Probate Attorney whose E-Mail address appears at the end of these notes, subject to compliance with all conditions governing the use of Interactive E-Mail. E-mail Rules are available in Rm 258 and on the Court's web site at
www.LASuperiorCourt.org.
Filed 2/17/11 - file is not available for 8/24/11 hrng - checked from scanned file & responses to notes filed 7/22/11 and 8/23/11 - NOTES UPDATED FOR CONTINUED HEARING DATE
PRIOR ORDER: Cont to 8/24/11; 7/13/11
SUMMARY:
special letters issued to petnrs 7/14/09 d/d 6/25/09
Acct period 6/26/09 to 10/31/10
ntc to affected parties ok
spec ntc/copy ok
response to notes filed 7/1/11; 7/22/11 & 8/23/11
MATTERS TO CLEAR:
a. Acctng entries re loan refinancing with HSBC have been redacted & the transaction was subject to sealing order granted 1/31/10 & info has been disclosed to the benes - is a motion to file this acctng under seal is needed? & should an unredacted copy of accounting lodged w/crt conditionally under seal?
D. why are exps 308,607.56 paid by Michael Jackson Co included in sch H disbursements of this acctng? alleges pd by Michael Jackson Co on behalf of the estate, query: where is/are offseting entry(ies) on "Charges" side of acctng? unable to reconcile w/new sch D - addl supp required
E. cannot determine if account balances due to transfers among business entities and the estate & adjustments made to the values of entities due to changes in the balances of receivables & payables w/in the entities and due to transfers of cash among the business entities (reported in schs D & E) - unable to reconcile entries reported on sch D & E reflected in "charges" w/"credit" schedules - appears crt should require a separate reconcilation schedule (schedules D, E & I with I/A values and to reflect moving items reported on one I/A to another)
G. pmts on business loans payable total 14,989,415.78 - no detail provided (see facts) - supp required
L. NEW - Appears correct I/A & acctng schedules are needed re decd's interest in Enchanted Kingdom
M. NEW - Revised schedules A, B & I of acctng has not been filed as alleged
N. NEW - why is it necessary (or appropriate) to adjust carry values of assets reported on the Assets on Hand Schedule? GR&F valued in I/A at 543,000 but Property on Hand shows value of 140,000; tangible p/p located in Bulleton valued on I/A 6,077,738 and valued in Property on Hand at 6,261,700; value of tangilbe p/p located in Gardena valued on I/A at 5,635,693 & reported in Property on Hand at 5,789,528; values for intangible p/p listed in the Property on Hand Schdule do not agree w/values reported in the I/As - supp required
-- unclear why adjustments to net book value, Sch E are included in summary of acct & how do adjustments reconcile to Property on Hand values for these affiliates?
P. NEW - Rsponse to Probate Notes filed 8/23/11 is not signed by petnrs and is not verified
Q. NEW - Not proper to include liabilities 144,341 in summary of acct - see PC 1061 - also why is this amt reported as a positive number on sch of Property on Hand? and why isn't this amt reported in Statement of Liabilities? supp required
S. NEW where can supporting detail (itemization) for receipts/disb, etc. listed in Schs D, F and G be located?
T. NEW why aren't disb from the Michael Jackson Co LLC to the estate (listed in schedule C-1-4) included in the schedule of receipts? supp required
U. NEW not proper to include the Estate's receipts and disb in Sch F & G Net Income/Disb from Trade or Business - these receipts and disb must be itemized - supp required
V. NEW what are the purposes of Schs D and E and why are these figures included in the Summary of Account? how do these "charges" reconcile with "credits" - supp required
W. NEW sch of property on hand includes amts due from affiliate (receivables?) - where is this reported charges? supp required
FACTS: acct covers period beginning 6/25/09 to 10/31/10 - alleges numerous sealing orders have been made in this proceeding & in order to avoid violating any of those orders several acctng entries have been redacted - (see Sch H page 18 of 43 redacting business exps with sub totals of 1,581,435.35; 506,590.51; 70,213.59 & 2,692,426.55) - the redacted information will be provided to the crt for its in camera review & to Ms. Lodise, GAL for decd's minor children, Mr. Zimring (AG) & counsel for Ms. Katherine Jackson -- in order to protect the right to financial privacy of the employees of Ms. Jackson & the estate, the names of employees are not disclosed on sch H, rather each payee is identified as "Payroll" - the identities of the employees & their respective compensation will be provided to the crt for its in camera review, Ms. Lodise, Mr. Zimring (AG) & counsel for Ms. Jackson
during the acct period, from time to time, the cash needs of the Estate & its various entities required transfers of cash among the entities & estate & that activity is reported on Sch D (of Response to Probate Notes filed 8/23/11) "Net Receipts Between Affiliates During the Period of the Account" -- see note E
in addition, as of d/d, many of the assets had negative values however the I/A does not reflect the negative values, rather a nominal value of $1 was assigned to such entities - during the period of the acct, the balances of receivables & payables w/in the entities changed due to debt pmts & inter company transfers - therefore in order for the acctng to balance, adjustments were to the inventory values of the entities as reflected in Sch E (of Response to Probate Notes filed 8/23/11), "Net Book Adjustments to Charges" - see note E
re business loan pmts 14,989,415.78 (no detail provided, see note G of acct filed 2/17/11) states they represent pmts on loans secured by MIJAC which was moved from MJ Publishing Trust to the Estate per refinancing transaction approved by the crt on 12/8/09 - the details of that transaction are subject to a sealing order issued 1/13/10 but will be provided to the crt for in camera review if requested
all acctng information been provided to Ms. Lodise, Mr. Zimring (AG) & Ms. Jackson's attys - however, amended acctng information provided in response to notes filed 8/23/11 was served on these parties 8/23/11 (see PA's comment below)
RELIEF:
1. JTD this acctng premature? no acctng filed/approved by prior special admin, Katherine Jackson - o/w crt to waive acct requirement for former spec admin Katherine Jackson? see note k - response to notes alleges to best of petnrs' knowledge Mrs. Jackson did not take possession or control of any estate assets
2. JTD is an order to seal this acctng needed? see note a & facts - petnrs agree to file an motion to seal if ordered by the crt
3. JTD acct
o/w acct & auth to continue estate administration to 5/7/12 (not as prayed) ok -- petn for final dist/status rept to be filed NLT 5/7/12 & crt to set OSC on 5/31/12
PA's COMMENTS: supp filed 8/23/11 was served on 8/23/11 (supp includes various amended acctng schedules and addl info not previously provided, including but not limited to a sch of the estate's liabilities) - appears matter should be continued for appropriate ntc
