A Lawyer’s Dream: Michael Jackson’s Estate

Michael Jackson was as much a corporation as a person.  Like any major celebrity or company, he had ongoing litigation and business operations.  “The National Law Journal” has an article detailing the myriad suits Jackson and his company, MJJ Productions, had at the time of his death.  These suits will continue being litigated by his corporation or his estate.  The corporate suits will proceed with nary a hiccup.  The corporation’s existence is unaffected by Jackson’s death.  Unlike a very small corporation that may be little more than a one man band, MJJ Productions probably has full time professional management.  That management will continue to run the company.  However, there may be issues as to who runs MJJ.  Assuming Jackson owned most, if not all, of the shares of MJJ, the person who controls the estate and eventually his heirs will have control of MJJ as well as his other personal assets and business. 

It is unknown whether Jackson had a will or a trust (or trusts).  According to one attorney,most celebrities have living trusts.  If he has a will or if he died intestate, there is likely to be a delay while a personal representative (a/k/a an executor) is appointed.  If he had a living trust, then the successor trustee can more or less immediately take control of all the assets in the trust.  However, if he had some assets in the trust and some not in the trust, then he may still need a personal representative to manage assets outside the trust. 

Numerous sources estimate his debt at $500,000,000.00.  His spending habits were legendary.  The good news is that his one-half interest in the music catalog that includes 250 Beatles tunes is estimated to be worth as much as $500,000,000.00 to $1,000,000,000.00, but may already be encumbered with a $300,000,000.00 loan.   Other sources say the music business is so bad that Jackson’s assets may not cover the debts.  It is also possible that a fire sale could be forced for the Beatles catalog if creditors get greedy and over anxious.

However, Jackson’s estate may earn even more than Jackson.  Even as I write this, radio stations and TV stations are playing Jackson songs and videos and the royalties are pouring in. Itunes is probably sellng Jackson’s music at a record rate and CDs and posters are flying off the shelves at WalMart.  This income is likely to go further without Jackson to spend it faster than it comes in.  It is likely to support an army of lawyers and accountants and still be able to pay debt and a legacy for his three (3) children.  Elvis Presley’s estate earned $52,000,000.00 last year, which may be more than Jackson earned while living.  Jackson’s estate may do better than Presley’s for the next year or two.  On the other hand, a rush is on for refunds of the tickets sold for his upcoming concert tour.  At least some of that is insured, but one wonders whether there will be suits for the lost profits and money spent in expectation of the tour.

We won’t know for some time just how things will shake out.  One thing is for certain, whether Jackson’s estate proves to be flush or broke, his confused finances and personal life are likely to be a bonanza for a cadre of lawyers on both sides of the issues.

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