Since Michael Jackson died in 2009, the estate has been raking in money, earning estimated profits of more than $300 million through music sales and licensing projects.
Now, the personal management firm of DeMann Entertainment, which represented Jackson from the lucrative period between 1978 to 1983, is seeking its cut from the newfound success.
On Tuesday, Demann Entertainment (formerly Weisner-Demann) filed a motion in LA Superior Court to compel arbitration with John Branca, the executor of the Michael Jackson estate.
Demann asserts that its 1978 personal management agreement with Jackson entitles it to certain monetary commissions as well as an "unrestricted and unlimited right" to audit financial records to make sure that proper commissions are being paid. The firm says it has read press accounts of the success that the MJ estate has enjoyed recently, and has reason to believe it has not been paid in full.
In January, Demann sent notice about its intention to audit, but allegedly the estate returned word that the firm would have to go through SonyMusic, and that it would "support" such action.
This hasn't been sufficient for Demann, who has followed up with further letters to the estate, demanding to see its books, with belief that the estate is in control over full relevant financial documentation.
Having not gotten what it wanted, Demann next tried to trigger the arbitration provisions of its personal management agreement with Jackson, but according to the lawsuit, the estate has refused to submit the dispute to arbitration. Now, DeMann is seeking to compel it.
Branca wasn't immediately available for comment.
Ivy's note: I looked over the documents this seems like nothing more than a disagreement of how to move forward.
-Ron Weisner - Frederick DeMann had a personal management agreement with Michael, Marlon, Randy, Tito and Jackie between 1978 - 1983.
- They state that their 5 year work with Michael entitled them to some commissions. (up to 10% is mentioned. and Michael released Off the Wall and Thriller during this time)
- After Michael's death and the increased sales DeMann wonders if he's being paid all the commissions he's supposed to get.
- So DeMann wants to audit Estate's books and sends them a notice.
- DeMann claims that Estate delayed their response and didn't accept audit requests and rather forwarded them to Sony and that's why they are filing this motion to compel arbitration. They are also asking for the costs they had due to this.
A bunch of emails between Estate's lawyer Howard Weitzman and DeMann's lawyer is also included. In those emails:
- Weitzman says that Michael Jackson Estate doesn't represent Tito, Randy, Jackie and Marlon.
- Weitzman expresses that the reports are prepared by Sony and MJ Estate gets the same statements as DeMann got from Sony. And that Sony is the responsible party for such commission payments.
- Weitzman volunteers to talk with Sony and arrange an audit of Sony's records and/or get Sony give them the information they want.
Overall after reading the email communications it seems like Estate is saying that Sony is the one responsible for the commissions and the reports and the audit should happen with them. DeMann's lawyers seem to be interested in more documents than Sony has or can give such as any underlying agreements that involves these songs that DeMann has a right on. Therefore they aren't too keen on involving Sony.
Department LA 5 Court Convened at: 8:30:00 AM 1/19/2012
Honorable Mitchell L. Beckloff
M. Dewey , Deputy County Clerk M. Manskar , Deputy Sheriff
Elizabeth Virgoe, CSR 11732 , Reporter
BP117321 101 JACKSON, MICHAEL JOSEPH - DECEDENT
Letters of Administr
Petitioner(s): Branca, John McClain, John
Attorney(s): Hoffman, Paul Gordon, Esq.
Continuance Number: 2 Continuance From: Wednesday, October 19, 2011
Last Date Changed: Tuesday, January 10, 2012 1:58:17 PM
PRIOR ORDER: Cont to 1/19/12 ; 10/19/11 at 8:30 am ;
Petnrs are co-exrs
ntc to benes ok
ntcs to DaMann via his attys ok
spec ntc/copy ok
OTHER CASES: BS 132820 DeMann Entertainment, Inc. v. John Branca, as Excutor, John McClain, et al (ntc of related cases filed 7/26/11)
FACTS: petnrs seek the Crt's instruction re a demand made by Freddy DeMann to audit the books and records of the estate & compel the estate to arbitrate issues arising from a personal management contract that terminated more than 28 yrs prior to the decd's d/d
on 7/1/78 the decd & his brothers entered into an agreement w/Weisner-DeMann Entertainment (DeMann is its successor) for personal management svcs - 5 yrs later the decd terminated that agreement - the contract provided that as compensation for svcs De-Mann would receive 10% of the Jackson parties' gross earnings during the period of the contract w/the exception of certain designated sources of revenue - the contract provided for pmt of continuing comm following its termination, but comm were limited to earnings resulting from or w/respect to contracts "substantially negotiated and/or entered into during the term or entered into w/in 6 mos thereafter as a result of offers made or negotiations commenced during the term & upon any and all extensions, renewals and substitutions thereof" -
the contract does not state it obligates (or inures to the benefit of) the decd's heirs, successors in interest or assigns
The contract was modified in 1981 to further define & limit the recordings that were subject to the 10% comm - as to the decd/estate, DeMann is only entitled to comm on the sales & uses of recordings contained on the albums Thriller & Off the Wall - Sony Music controls the use of these recordings, as the estate's exclusive licensee, and distributes the royalties generated - Sony Music has possession & control of all financial docs relevant to the sales - Puruant to a letter dated 8/25/82 Sony (& its predecessor CBS) have pd DeMann directly w/o involvement from the Jackson parties
DeMann has not filed a creditor's claim
DeMann has demanded to examine the estate's books & records to determine whether or not and to what extent he is entitled to any of the estate's or decd's earnings over & above the comm he receives directly from CBS Records & its successor Sony Music for the last 28 yrs
Petnrs do not believe DeMann is owed any money from the estate nevertheless, w/o waiving any rights, petnrs have agreed to allow DeMann to conduct an audit -- however, a dispute has arisen concerning the books & records DeMann is entitled to examine -- the scope of DeMann's dispute is related to commission rights - petnrs offered to only provide him w/the customary docs provided in an audit of the sale & use of master recordings that are relevant to the calculation of commissions -- DeMann, on the other hand, asserts he has an unrestricted right to examine all of the books & records of the estate & has demanded that petnrs submit to arbitration or he will file a petn/motion to compel arbitration
Under CA law, petnrs, cannot be compelled to arbitrate & cannot enter into an agreement to arbitrate absent Crt approval (PC 9621) -- petnrs do not be it is in the estate's best interests to arbitrate and are seeking this crt's order instructing them to provide DeMann those books & records in their possession & control that are relevant to the calculation of DeMann's comm & which would customarily be provided in such an audit, subject to an appropriate non-disclosure agreement, and instructing petnrs to defend the estate against any attempt to compel arbitration initiated by DeMann
RESPONSE FILED 1/04/12
RESPONDENT: DEMANN ENTERTAINMENT, INC.
ATTORNEY: STEPHEN M. LOWE, ESQ.
Objector is claimant
Petn has been mooted and superseded by objector's civil complaint in SC114598. Objects and requests orders below
MATTERS TO BE CLEARED-OBJS - N/A
1. JTD instruct petnrs to provide DeMann those books & records in their possession & control that are relevant to the calculation of DeMann's commission & which would customarily be provided in such an audit, subject to an appropriate non-disclosure agreement
2. JTD instruct petnrs to defend the estate against any attempt to compel arbitration initiated by MdMann
3. JTD OBJECTIONS - DWOP petn or abate until resolution of objector's civil complaint
4. JTD OBJECTIONS - alternatively, extrs make all books and records of the Estate since decd's death pertaining to gross monies or other considerations available to boecjtor for an audit and inspection
PA's COMMENTS: T/T but see objs filed and civil complaint now filed
Michael Jackson Agent’s Contract Suit Hangs By Thread
Source: Law 360 – By Ciaran McEvoy
Los Angeles (March 12, 2013, 3:34 PM ET) — A California judge on Tuesday indicated he will likely throw out former Michael Jackson manager Freddy DeMann’s lawsuit over commissions from the posthumous repackaging of the pop star’s work, saying the suit is barred because DeMann never filed a creditor’s claim against the singer’s estate.
At a Tuesday hearing, Los Angeles County Superior Court Judge Mitchell L. Beckloff said he was strongly leaning toward dismissing DeMann’s complaint without leave to amend because “the case requires a creditor’s claim.”
Judge Beckloff expressed doubts as to whether DeMann could file a late creditor’s claim, given how much time has passed in the litigation.
California Probate Code Section 9000 requires a creditor to file a claim within four months of the appointment of an estate’s executors. It defines a claim as a demand for payment “whether due, not due, accrued or not accrued, or contingent, and whether liquidated or unliquidated.”
But DeMann’s attorney Stephen M. Lowe said he could not have made a demand for payment at the time of Jackson’s death because the contracts for the video game and other posthumous reuses of the singer’s work did not exist yet.
“You shouldn’t allow a technical defect — if there is even a defect — to block the allowance of a cause of action,” Lowe said at Tuesday’s hearing.
Jeryll S. Cohen, a lawyer representing Jackson estate executors John G. Branca and John McClain, said DeMann “should have put the estate on notice and filed a creditors claim.”
DeMann was Jackson’s manager from 1978 to 1983, a period that included the release of two massively popular albums, “Off the Wall” and “Thriller.” According Jackson and DeMann’s 1978 contract, DeMann was granted the right to a commission from the sales of those two albums, among other things, according to DeMann’s opposition to the estate’s demurrer, filed Feb. 27.
Since Jackson’s death in 2009, the estate has negotiated contracts with Sony Corp., Ubisoft Entertainment SA and Cirque du Soleil to reuse the songs Jackson created under DeMann’s management, according to court papers. DeMann alleges that the estate is wrongfully withholding his commissions since Jackson’s death.
DeMann sued for his commissions, but on Jan. 14, Judge Beckloff dismissed the complaint, ruling DeMann failed to file a creditor’s claim. Nine days later, DeMann filed an amended complaint, which the estate’s lawyers argued merely repeated the allegations in his previous lawsuit.
DeMann Entertainment is represented by Bert H. Deixler and Ashlee L. Hansen of Kendall Brill & Klieger LLP and Stephen M. Lowe, Jared A. Barry and Thomas C. Aikin of Freeman Freeman & Smiley LLP.
Branca and McClain are represented by Howard L. Weitzman and Jeremiah T. Reynolds of Kinsella Weitzman Iser Kump & Aldisert LLP, Zia F. Modabber of Katten Muchin Rosenman LLP, and Jeryll S. Cohen of Hoffman Sabban & Watenmaker APC.
The case is DeMann Entertainment Inc. v. John Branca et al., case number SC114598, in the Superior Court of the State of California, County of Los Angeles.
–Additional reporting by Matthew Heller. Editing by Kat Laskowski.
At the 4th complaint the court ruled there's a triable issue and Demann can be shown accounting. Estate is asking for a jury trial.