King Of Pop's Ex-Manager Says Brands Lined Up Before Death
Law360, Los Angeles (February 16, 2017, 8:15 PM EST) -- Michael Jackson’s former manager Tohme Tohme took the stand at the IRS’ behest Thursday in the Los Angeles trial over the value of the late entertainer’s estate at the time of his death, testifying that Nike, Sony and others had licensing deals in the works when Jackson died.
During the second week of the trial before visiting Judge Mark Holmes of the U.S. Tax Court, the Internal Revenue Service began its case in chief, arguing that the estate underreported its value, including Jackson’s name and likeness rights, by hundreds of millions of dollars at the time of the King of Pop's death in June 2009. So far in the trial, the estate has put on percipient and expert witnesses to testify that child abuse allegations against Jackson rendered his image poisonous for brands and that he had no name and likeness licensing deals in place when he died.
On Thursday, the IRS called to the stand onetime Jackson manager Tohme, who has previously been sued by the estate for allegedly tricking the entertainer into entering extortionate management agreements. Tohme testified about his time managing the entertainer from mid-2008 until Jackson’s death in June 2009.
Under examination by IRS attorney Sebastian Voth, Tohme testified that there were numerous deals in the works before Jackson’s death, including a plan with Nike to create “Moonwalk” sneakers named for Jackson’s famous dance move, a plan with James Nederlander of The Nederlander Organization to create a Broadway show based on the music video for Jackson’s song “Thriller,” a plan with animation producer Andy Heyward to create a “Thriller” TV show, a plan with Sony to create a Jackson-themed video game, and the beginnings of plans with Cirque du Soleil to create a Jackson-themed show.
While no deals were actually signed for the Nike shoes or the Sony video game, Tohme testified that the companies had given the go-ahead for the projects, and that they only fell by the wayside because of Jackson’s death.
The present case has its origins in a petition Jackson’s estate sent to the Tax Court in July 2013, challenging a lengthy notice of deficiency the IRS mailed to the estate that month. The notice contested the estate’s reported valuation of a litany of items, including a 2001 Bentley Arnage and rights to the master recordings of the Jackson 5.
According to the notice, the IRS adjusted the value of the estate from $7 million to $1.32 billion. As a result, the agency demanded $702 million, including $505.1 million in deficiencies and $196.9 million in accuracy-related penalties.
The most notable discrepancy between the competing valuations as highlighted in the notice included the right to Jackson’s image and likeness. The IRS originally pegged that asset at $434.3 million, whereas the estate had claimed the right was worth only $2,105.
In the runup to the trial, the IRS continued adjusting its proposed value of the estate, increasing the assessed value of Jackson's Mijac music catalog — which held the singer's own songwriting copyrights — by tens of millions of dollars, but revising its proposed value of Jackson's name and likeness upon his death to $161 million.
During last week’s opening statements, Avram Salkin of Hochman Salkin Rettig Toscher & Perez PC, representing the estate, said that at the time of Jackson's death, his estate was burdened with over $400 million in debt and that the name and likeness rights were worth only $3 million. Salkin also said that the IRS had overvalued the Mijac catalog by roughly $90 million and Jackson's half-share of music publishing company Sony/ATV by $200 million. Jackson's estate sold that share to Sony for $750 million last year.
On Thursday afternoon, the estate’s attorney Howard Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP cross-examined Tohme, asking him to name any actual licensing deals he knew Jackson had at the time of his death, with Tohme admitting only Jackson’s musical licensing deals with Sony and Warner/Chappell were in place.
On the claimed Cirque du Soleil plans, Weitzman also got Tohme to admit that he spoke only to a man named Jack Wishna, who claimed to know Cirque's interests, before Jackson’s death, but never actually spoke to a confirmed Cirque du Soleil representative nor signed any deal for the performing troupe to use Jackson’s name, likeness or music.
After Jackson’s death, the estate did end up working with Cirque du Soleil to create two Jackson-themed shows that grossed hundreds of millions of dollars for the estate, according to testimony earlier in the trial by Jackson’s former attorney John Branca, who is the estate’s co-executor.
Law360, Los Angeles (February 16, 2017, 8:15 PM EST) -- Michael Jackson’s former manager Tohme Tohme took the stand at the IRS’ behest Thursday in the Los Angeles trial over the value of the late entertainer’s estate at the time of his death, testifying that Nike, Sony and others had licensing deals in the works when Jackson died.
During the second week of the trial before visiting Judge Mark Holmes of the U.S. Tax Court, the Internal Revenue Service began its case in chief, arguing that the estate underreported its value, including Jackson’s name and likeness rights, by hundreds of millions of dollars at the time of the King of Pop's death in June 2009. So far in the trial, the estate has put on percipient and expert witnesses to testify that child abuse allegations against Jackson rendered his image poisonous for brands and that he had no name and likeness licensing deals in place when he died.
On Thursday, the IRS called to the stand onetime Jackson manager Tohme, who has previously been sued by the estate for allegedly tricking the entertainer into entering extortionate management agreements. Tohme testified about his time managing the entertainer from mid-2008 until Jackson’s death in June 2009.
Under examination by IRS attorney Sebastian Voth, Tohme testified that there were numerous deals in the works before Jackson’s death, including a plan with Nike to create “Moonwalk” sneakers named for Jackson’s famous dance move, a plan with James Nederlander of The Nederlander Organization to create a Broadway show based on the music video for Jackson’s song “Thriller,” a plan with animation producer Andy Heyward to create a “Thriller” TV show, a plan with Sony to create a Jackson-themed video game, and the beginnings of plans with Cirque du Soleil to create a Jackson-themed show.
While no deals were actually signed for the Nike shoes or the Sony video game, Tohme testified that the companies had given the go-ahead for the projects, and that they only fell by the wayside because of Jackson’s death.
The present case has its origins in a petition Jackson’s estate sent to the Tax Court in July 2013, challenging a lengthy notice of deficiency the IRS mailed to the estate that month. The notice contested the estate’s reported valuation of a litany of items, including a 2001 Bentley Arnage and rights to the master recordings of the Jackson 5.
According to the notice, the IRS adjusted the value of the estate from $7 million to $1.32 billion. As a result, the agency demanded $702 million, including $505.1 million in deficiencies and $196.9 million in accuracy-related penalties.
The most notable discrepancy between the competing valuations as highlighted in the notice included the right to Jackson’s image and likeness. The IRS originally pegged that asset at $434.3 million, whereas the estate had claimed the right was worth only $2,105.
In the runup to the trial, the IRS continued adjusting its proposed value of the estate, increasing the assessed value of Jackson's Mijac music catalog — which held the singer's own songwriting copyrights — by tens of millions of dollars, but revising its proposed value of Jackson's name and likeness upon his death to $161 million.
During last week’s opening statements, Avram Salkin of Hochman Salkin Rettig Toscher & Perez PC, representing the estate, said that at the time of Jackson's death, his estate was burdened with over $400 million in debt and that the name and likeness rights were worth only $3 million. Salkin also said that the IRS had overvalued the Mijac catalog by roughly $90 million and Jackson's half-share of music publishing company Sony/ATV by $200 million. Jackson's estate sold that share to Sony for $750 million last year.
On Thursday afternoon, the estate’s attorney Howard Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP cross-examined Tohme, asking him to name any actual licensing deals he knew Jackson had at the time of his death, with Tohme admitting only Jackson’s musical licensing deals with Sony and Warner/Chappell were in place.
On the claimed Cirque du Soleil plans, Weitzman also got Tohme to admit that he spoke only to a man named Jack Wishna, who claimed to know Cirque's interests, before Jackson’s death, but never actually spoke to a confirmed Cirque du Soleil representative nor signed any deal for the performing troupe to use Jackson’s name, likeness or music.
After Jackson’s death, the estate did end up working with Cirque du Soleil to create two Jackson-themed shows that grossed hundreds of millions of dollars for the estate, according to testimony earlier in the trial by Jackson’s former attorney John Branca, who is the estate’s co-executor.
How dare they drag the 93' and 03' allegations into this case? The IRS b@$^@#%$ have gone too far this time.