Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, November 1, 2011

James Brown's Estate Thriving, but Contests Continue

James brownAccording to the Associated Press, David Black (a professional money manager) has used a canny licensing deal to wipe out more than $20 million in debt owed by James Brown’s charitable trust. The trust is now able to pay for thousands of college scholarships for needy students.

However, Adele Pope and Robert Buchanan, the two ousted trustees, have filed a brief with the Southern Carolina Supreme Court arguing that Black should not be involved with the estate because both Pope and Buchanan opposed hiring Black and becuase neither of them participated in the negotiations that put the estate in Black’s hands.

The attorney general at the time oversaw the deal to hire Black and claims that Pope and Buchanan paid themselves hundreds of thousands of dollars from the estate, failed to appraise Brown’s estate, and claimed $5 million in fees.

Under the current deal, the trust receives half of Brown’s assets, Brown’s widow and young son receive a quarter, and Brown’s grown children receive the rest.

See Saddled by Debt, James Brown Estate Now Thriving, Still Contested, The LA Times, Oct. 31, 2011.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2011/11/james-browns-estate-thriving-but-contests-continue-.html

Estate Administration, Music, Trusts | Permalink

TrackBack URL for this entry:

https://www.typepad.com/services/trackback/6a00d8341bfae553ef015392b75618970b

Listed below are links to weblogs that reference James Brown's Estate Thriving, but Contests Continue :

Comments

Visit the facebook page, James Brown "I Feel Good" Trust (FOIA Concerns), to read documents in the case for yourself. The sole-source AP story did not tell the whole story.

From the Newberry Observer:

Former James Brown Trustees Ask S.C. Supreme Court to Restore James Brown “I Feel Good” Trust to Original $80 Million

The South Carolina Supreme Court heard arguments Tuesday in the attempt by former James Brown trustees, Robert Buchanan of Aiken and Adele Pope of Newberry, to set aside a 2008 deal between former SC Attorney General (AG) Henry McMaster and some of Brown’s disinherited claimed heirs to transfer about $50 million from Brown’s “I Feel Good” Trust.
AG McMaster’s deal re-wrote Brown’s estate plan, giving McMaster control of Brown’s assets through a trustee that is selected by the AG and can be removed at will. The agreement also gave away over 50 percent of Brown’s assets to disinherited relatives and claimed relatives.
Buchanan and Pope argue that the court’s decision may determine the future of private philanthropy in S.C.
Brown’s estate plan dedicated his entire $100 million dollar music empire to education. After providing education trusts for seven grandchildren, Brown put the rest in the James Brown “I Feel Good” private foundation, to be used solely for scholarships to needy children.
In the Aug. 10, 2008, agreement, McMaster rewrote Brown’s estate plan to give 25% of the music empire to Brown’s companion and another 25% to five of Brown’s more than a dozen claimed children.
McMaster’s rewrite was subsequently amended to leave the “I Feel Good” foundation with only about 47 percent of Brown’s music empire.
At Tuesday’s hearing, Chief Justice Jean Toal asked hard questions about AG McMaster’s decision to give Brown’s companion, Tommie Rae, a quarter of the music empire, even though: she had signed a pre-nuptial agreement before their marriage ceremony; she was married to another man at the time she and Brown exchanged vows; and after an annulment of her previous marriage, she agreed in a settlement that she would never claim to be Brown’s common-law wife.
William Wilkins, counsel for the settling parties, argued that the S.C. Supreme Court misinterpreted its 2008 Lukich v. Lukich decision, which holds that a second marriage is void when a party is married even if an annulment is obtained later.
Also at issue was whether McMaster should have spoken for Brown’s 2000 Trust in the settlement, giving over half of its assets to persons Brown had intentionally disinherited.
James Richardson, attorney for Buchanan and Pope, argued that no attorney general in the nation has the authority to take over and sign documents for a private foundation, and even though the AG may enter legal proceedings and speak for the charitable beneficiaries, there is no precedent for an AG to give away a trust’s assets.
Richardson argued that the right of the AG to enforce the proper operation of a private foundation does not give him the authority to dismantle it.
Deputy AG “Sonny” Jones was asked why McMaster did not use his authority to enforce the “I Feel Good” trust, including the enforcement of the in terrorem clauses against Brown’s children.
In terrorem clauses state that anyone who challenges the will or trust receives nothing.
The will was challenged on the assertion of undue influence, and Justice Toal wanted to know what steps were taken to determine the strength of such a claim.
Jones admitted that the AG’s office did not interview any of the witnesses to Brown’s 2000 will and trust as to his mental competence, and that the lower court judge had made no baseline determination about the strength of the challenge to the will.
Jones claimed the shrewdness of the original trustees convinced him of undue influence, but Toal responded that was the not the law in South Carolina.
Jones referred to last week’s plea by original trustee David Cannon who, according to court documents, paid himself almost $12 million of the $80 million Brown took in between 1999 and 2006.
Although indicted two years ago, it was only on Oct. 27, 2011, that Cannon was found guilty of breach of trust. Cannon was sentenced in Aiken County to three years of home confinement.
AG Alan Wilson’s office sought no restitution for the $12 million taken by Cannon, leaving Cannon with a $1 million retirement home he purchased in 2007 on the exclusive island Roatan in Honduras.
Brown’s will and trust directed that his fiduciaries were to “vigorously defend” his estate plan. In fulfillment of their duty as fiduciaries, Buchanan and Pope appealed McMaster’s rewrite of Brown’s will and trust.
The appellant’s filings assert that if McMaster’s destruction of the “I Feel Good” foundation is not reversed, it could destroy private philanthropy in South Carolina by discouraging wealthy citizens from creating charitable trusts in the state.

Posted by: sue summer | Nov 3, 2011 4:16:02 PM

Post a comment