Jackson story just getting started

Funeral date set as more details emerge

By Elizabeth Guider

July 1, 2009, 10:06 PM ET

Last Rehearsal

The Michael Jackson funeral will be at 10 a.m. Tuesday at Staples Center in Los Angeles. Sources said AEG Live, which owns the arena and the adjacent Nokia Theatre, will use both facilities and the surrounding plaza.

Meanwhile, things keep getting curiouser and curiouser in and around the Jackson “case.” Even before a proper burial the death is morphing from a personal tragedy into a series of titillating tell-alls or testy tussles.

And the inevitable psychics, shysters and various supporting players are coming out of the woodwork to stake their claim to a piece of the Jackson legacy, to tattle about — or explain away — the pop icon’s loopy lifestyle or just to bask in his reflected glory.

Latest reveal: Registered nurse-nutritionist SheriLyn Lee told CNN that an insomniac, energy-depleted Jackson begged her to administer the sedative Diprivan to help him sleep. The Jackson family immediately dismissed her as an ill-informed interloper.

Nonetheless, some things are becoming clearer — and one of them was the astuteness of the deal for that Beatles catalog, even if it apparently meant a rift with Paul McCartney and even if the King of Pop eventually had to sell half his stake to Sony to keep afloat. The 750,000-song catalog includes not only music by the Beatles but also many works of Bob Dylan, Neil Diamond, Lady Gaga, Eminem and Jonas Brothers. That property essentially anchors the pop star’s assets.

And getting at precisely what all those assets are, what they’re worth and who has any legitimate claim to them will keep a phalanx of legal eagles engaged for years.

Per a detailed rundown of the singer’s tangled finances upturned by the Associated Press on Wednesday, the lavish-spending but debt-ridden Jackson was worth $237 million as of March 31, 2007.

Like so much else that boggles the mind about Jackson’s life, though, he had $700,000 of that amount in actual cash, a relatively paltry sum given his opulent lifestyle, prodigious borrowing and seven-figure shopping sprees.

The dollar amounts then and now are crucial because Jackson’s estate soon will be the focus of legal battles between the singer’s family and various creditors.

Not to mention Uncle Sam, who, once debts are stripped out of the Jackson assets, will want to exact his pound of flesh — as much as 45% of what’s left of the estate once the legislated $3.5 million exemption is accounted for.

“I’m really surprised more hasn’t been made of the possible federal estate tax liabilities that could be involved in all this,” said Lawrence Heller, a tax and estate planner of the law firm Bryan Cave. He also added that the executors of the will have nine months to untangle the situation before interest and penalties apply.

Since 2007, Jackson’s debts and his assets have grown substantially. He took on more debt in a refinancing transaction later that year, and the Sony/ATV Music Publishing joint venture spent hundreds of millions acquiring new songs.

The five-page statement of financial condition from D.C.-based accounting firm Thompson, Cobb, Bazilio & Associates says Jackson had debts of $331 million.

On the plus side of the ledger, the 2007 report put a net value on Jackson’s 50% stake in the Sony/ATV catalog at $390 million.

His overall assets at the time, mostly nonliquid items including the catalog share, were pegged at about $500 million.

According to other unrelated documents, Sony Music guaranteed Jackson a cash distribution of $11 million a year from the venture through September 2011 and indicated that Sony had an option to buy an unspecified percentage of Jackson’s remaining share in Sony/ATV.

The present worth of the catalog probably has gone up, though Sony’s sluggish stock performance suggests the conglom might not be anxious to spend anything considerable for a buyout. The value of Neverland, the other main asset in which Jackson still had an indirect ownership interest, probably has gone down in the wake of the housing slump in California.

In another part of the forest of financial entanglements, there are a few patches of sunlight and a lot of shade.

Unlike what Jackson’s family apparently was aware of, the singer did sign a will — big scrawls on each of five typed pages, in fact — and it leaves the pop star’s estate to his three children. That revelation complicates a bid by Jackson’s mother, Katherine, to take control of her son’s finances. The will does name his mother as guardian of his children but puts his assets in a trust.

However, elements of the wacky pop up in every aspect of this unfolding saga: Jackson designated none other than the 65-year-old entertainer Diana Ross, his lifelong friend, as backup guardian for the kids were anything to prevent his mother, now 79, from fulfilling her duties. Debbie Rowe, the mother of Jackson’s two older children who relinquished her parental rights 10 years ago, is not even referred to in the will.

The divvying up of Jackson’s assets and the settling of his debts are likely to be hotly contested.

On Monday, just four days after their son died of cardiac arrest, Katherine and Joe Jackson won temporary custody of the kids and moved to become administrators of his estate. And on Wednesday, the judge further ruled that Katherine Jackson will retain limited control of 2,000 items from Neverland until another hearing is held Monday.

But after the will surfaced, Superior Court Judge Mitchell Beckloff called for a speedy compromise between attorneys for Katherine Jackson and the two co-executors of Michael Jackson’s will: attorney John Branca and John McClain, a music executive and family friend.

“I would like the family to sit down and try to make this work so that we don’t have a difficult time in court,” the judge said.

Good luck with that.

Roger Friedman and the Associated Press contributed to this report.3tMJJ