If my blogpost is late today, it’s because I’ve just emerged from 271 (count ’em, 271, and I have) pages of Judge Mark V. Holmes’ opinion in Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McClain, Co-Executor, 2021 T. C. Memo. 48, filed 5/3/21*.

The co-ex’rs and IRS stiped out most of the multi-multimillion dollar estate tax fight, leaving only three open items, for the ten attorneys for the co-ex’rs and the five IRS attorneys to fight over. Judge Holmes will tell you a lot more about popular music marketing than you wanted to know. I’ve blogged this story all the way for the last eight (count ’em, eight) years, from Mr. Woods’ rather flippant comment through the perjured expert, through Judge Holmes deciding to review the evidence his own self. I won’t list them all.

Both sides have Boss Hoss problems, with BProd on IRS, but BoP on the estate (not an individual). In the end, the estate’s experts, though not getting everything right, were at least as credible as IRS’ appraiser of the Century (2021 T. C. Memo. 48, at p. 60). No chops.

If the sad story of the King of Pop’s meteoric rise, unparalleled success (even an American President did not want to be seen basking in Jackson’s limelight; 2021 T. C. Memo. 48, at p. 11, footnote 4), and final collapse does not move you, I am truly sorry for you. Judge Holmes starts with a quote from Plutarch; I’d suggest Aeschylus.

There are numbers; oh, are there numbers! It’s clear the co-ex’rs managed a great salvage job after Michael died, but the test is our old friend the willing buyer.

Judge Holmes notes the evolution of business organizations; tax affected (or tax effected) analyses are on their way out. The C Corp double-taxation vis-a-vis S Corp passthrough and ownership limitations don’t matter as much now.

“There has also been a boom in different types of pass-through entities–such as limited liability companies–that give organizations the many benefits of C corporations in raising capital from large numbers of shareholders or members while avoiding double taxation. Many of our precedents arose from S corporations, which have sharp restrictions on who and what can own them. With the advent and popularity of other, less restrictive, forms of pass-through ownership we cannot but find that the gap between C corporations and other entities has narrowed over time. The Estate’s experts did not consider such distinctions and did not consider both the tax detriments and benefits of pass-through status.” 2021 T. C. Memo. 48, at pp. 81-82.

Finally, the “rarefied heights of higher mathematics” boil down to Michael Jackson’s image and likeness being worth $1.1 million more than estate claimed; Bankruptcy protection trust No. 1 worth zero, as the estate claimed (not the $200 million IRS claimed); but Bankruptcy protection trust No. 2 worth $105 million more than the estate claimed. So estate takes a $111 million hit.

Specialists in valuation will find this opinion interesting reading.

*MichaelJackson 2021 T. C. Memo. 48