Michael Jackson’s estate wins preliminary victory over Katherine Jackson

An appeals body in Los Angeles says Katherine Jackson should remember the time when she first objected to the sale of her son’s catalog to Sony for $600 million over a year ago. Because she did not argue then that the sale allegedly violated the terms of Michael Jackson’s will, she cannot do so now on appeal, the three-judge panel says.

In a new tentative ruling expected to be issued in the next 90 days, the appeals panel sided with Michael Jackson’s estate, saying Katherine Jackson “forfeited” the core claim of her appeal by not raising it in the lower court that first approved the deal. The tentative ruling from California’s Second Appellate District went on to say that even if Katherine had raised that point in probate court, it wouldn’t have mattered. Considering the merits of her appeal, the justices said they agreed with the previous judge’s ruling that the estate’s executors had full power and authority to negotiate the sale.

Katherine’s attorney was scheduled to hold a hearing for the appeal on Wednesday, but waived the hearing after the tentative decision was announced. The tentative decision, which was Rolling Stoneended with a warning that “this court will not admit further briefs or grant an adjournment.” (The attorney did not respond to a request for comment.)

“Katherine did not argue (in the lower court) that the sale violated the terms of Michael’s will or violated probate law. In fact, as the executors note, Katherine agreed in probate court that the will gave the executors the authority to sell, exchange or otherwise dispose of the estate’s real or chattel assets,” the judges wrote. They pointed out that Katherine instead challenged the proposed transaction on the grounds that “the assets to be sold were valuable and would increase in value over time, the estate did not need the money generated by the sale, the sale violated Michael’s wishes, which he had communicated to various members of his family, and the executors had taken no steps to certify that the sale price was equal to or above market value.”

Either way, the justices wrote, “we tentatively conclude that Katherine’s appeal fails on the merits because the probate court’s order does not violate the terms of Michael’s will.” They said while Katherine argued on appeal that Michael’s will required the executors to “sell as little of the estate as possible after paying the estate’s legitimate debts,” the will’s language “does not suggest that limitation.” They said a “reasonable construction” of the will authorizes the executors to sell, invest or otherwise manage estate assets until probate is complete and the estate exists “in its present form.” After probate is complete, the assets are to be distributed to the trust, which will benefit Michael’s three children, who are named as his sole heirs, and Katherine, who is named only as a lifetime beneficiary.

The stunning $600 million catalog sale was first reported by Billboard and later confirmed by Rolling Stone. According to an appeal filing previously filed by the estate’s executors, the sale of the assets was negotiated to take advantage of an asset market that was “by far” the “hottest it’s ever been.” The deal, which was completed during Katherine’s appeal, allows the estate to retain “effective control of Michael’s music” while diversifying its range of assets, the filing said.

In their appeal papers preceding the preliminary ruling, Katherine and her lawyers called the deal “totally improper.” They said she filed the appeal so she could sue the estate for breach of fiduciary duty. (The lower court’s approval of the deal otherwise gives the executors immunity from lawsuits regarding its reasonableness.)

In a heavily redacted document that Rolling StoneEstate attorney Jonathan P. Steinsapir called the deal “remarkable” because it offers the estate “the best of both worlds” in terms of tax benefits and returns. He said that under the deal, the estate retains the right to make “critical decisions” regarding Michael’s name, image and likeness, and to exercise day-to-day control over his trademarks. “Over the past 14 years, the executors have exercised their authority with extraordinary care and extraordinary diligence, achieving extraordinary results. As the probate court recognized in its (underlying decision), ‘what was originally nothing but debt and significant ongoing obligations became a $2 billion estate,'” he wrote.

None of Michael’s three adult children – Prince, Paris and Bigi Jackson – filed written objections to the estate’s request for court approval of the transaction. Attorneys for Prince and Paris said at a hearing in March 2023 that they had no objections. A lawyer for Bigi reserved the youngest sibling’s right to object, court documents said. In March of this year, Bigi’s attorney, David Coleman, wrote to the court that his client considered the sale of the assets to be of “utmost importance” both financially and personally, but that he did not support Katherine’s appeal.

“Bigi objected to the proposed transaction. He believed the executors should prove to the court the necessity of the proposed transaction,” the attorney wrote. But after the court heard Katherine and Bigi’s arguments and still decided to approve the transaction, Bigi was convinced the deal was unstoppable, he said. “The chances of the judgment being overturned on appeal were quite slim, and Bigi did not want to incur further costs of an appeal,” the attorney wrote.

Michael Jackson was 50 when he died of an accidental overdose of the anesthetic propofol in his rented Los Angeles mansion on June 25, 2009. His estate has been in probate since then. A major obstacle to funding his heirs’ trust is a tax dispute with the IRS, allegedly involving over $700 million in unpaid taxes and penalties. According to estate documents, thanks to legal maneuvering, the final debt to be paid by the estate will be only a “tiny fraction” of that amount. The valuation of a remaining, unidentified asset is delaying the final resolution of the tax issue, the estate said, and in the meantime the IRS continues to have a lien on the estate’s assets.

Meanwhile, Michael Jackson’s companies are again defendants in new lawsuits against two of his accusers, Wade Robson and James Safechuck. The men claim the companies are liable for their alleged abuse as children.