February 21, 2012 11:55am PT by Eriq Gardner
Why Michael Jackson's Former Manager Is Fighting With the Estate
The last few years of Michael Jackson's life are the subject of dueling lawsuits filed Friday on the part of both the Michael Jackson estate and the late singer's former manager, Tohme Tohme, against each other. Both sides present different pictures about how the "King of Pop" attempted to get his career back on track. At stake is at least 15 percent of the hundreds of millions of dollars earned since Jackson died on June 25, 2009.
The estate, now run by entertainment lawyer John Branca and music industry veteran John McClain, agree that Tohme played a big role in the last year of Jackson's life. But according to their complaint, Tohme's goals were mostly selfish. "With no oversight or supervision," says the lawsuit, "Tohme quickly set about to and did install a far-reaching and very lucrative financial package for himself obtained as a result of a manifest breach of fiduciary duties."
Tohme, of course, paints a different picture in his own complaint. "At the time Tohme began working with Michael Jackson in 2008, Michael Jackson's personal and financial affairs were in turmoil," his lawsuit reads. "Through Tohme's advice, guidance, and skillful work, Michael Jackson's public image was greatly improved, he was returned to the public eye as the 'King of Pop,' and was positioned to sign the agreements with AEG Live for the historic shows at London's 02 Arena which led to the documentary concert film, 'This Is It!' and, ultimately, millions of dollars for the Jackson Estate."
Who exactly is Tohme Tohme?
The Estate presents him as a character who had no experience whatsoever as a personal manager for any artist by the time he began working for Jackson in 2008.
Tohme himself doesn't offer much background either, but traces his work for Jackson back to a dispute that erupted between the singer and Sheikh Abdullah of Bahrain, whose music label had signed Jackson to an exclusive production agreement. The relationship between Jackson and the Prince of Bahrain went south and for several years in the middle part of the last decade, Jackson wasn't able to create anything new as the two were in court with each other. Tohme says that he personally stepped in here, flying to Bahrain to make peace, which he says led to a settlement agreement.
Afterwards, Tohme assumed his role as Jackson's personal manager. Much of his work involved housing, loans and coordinating media appearances. One piece of work -- efforts to save Jackson's beloved Neverland Ranch -- is important to both lawsuits.
Tohme, repped by LA law firm Sheppard Mullin, says that the home was on the verge of foreclosure, and that at Jackson's request, he supervised negotiations of the contracts for the buyout of the loan to prevent foreclosure. Specifically, he talked to many lending institutions before eventually getting Colony Capital to agree to provide $23 million in financing. For the work, Tohme says he was promised a 10 percent loan finder's fee, or $2.3 million.
The estate agrees that Tohme was promised in writing a finder's fee, but also says that Jackson signed the documents without getting a full explanation of what he was doing, without having the benefit of an arm's length negotiation, and without having an independent legal advisor. The estate maintains that Tohme had many conflicts in his various duties, that Colony reaped a tremendous deal, and that Tohme placed his interests above Jackson's.
Similar allegations are made to the "Services Agreement" that Jackson signed with Tohme on July 2, 2008, which formalized the relationship between the singer and his personal manager. For services that included event management, maintaining licensing agreements, coordinating payments, and managing housing and personal business affairs, Tohme was to get "15 percent of all gross compensation" of Jackson's various endeavors.
Again, the estate says the deal happened without independent legal advice, an arm's length negotiation, or an explanation of what the singer was signing. Instead, Jackson signed the deal, according to the estate, because he trusted that Tohme wouldn't lead him to a deal that held provisions that "far exceed normal and customary terms for personal managers, and particularly managers with Tohme's complete lack of experience for any artist, let alone an artist comparable to Jackson."
Tohme might have gotten more for his services, but he says that he did quite a bit for Jackson during his last days. He says he was instrumental in doing the work that led to the AEG "This Is It!" concert series, that he negotiated and completed a contract for Broadway and cartoon adaptations of "Thriller," that he oversaw royalty examinations, that he approved licensing agreements, worked with lawyers to resolve trademark issues, worked on re-releases, played an instrumental role in the implementation of Michael Jackson's website, and much more.
Having completed those services, Tohme feels he's entitled to the 15 percent commission, which includes a cut of the hundreds of millions of dollars that have been earned in the years since the singer died. He's also seeking his finder's fee from the Neverland loan, and wants the estate to submit to an accounting.
Meanwhile, the estate says that Tohme's power grab finally became too much for Jackson before the singer's death. Not only did Tohme enter into a "Services Agreement" with Jackson, he also got his client to hand over power of attorney and also had him sign an indemnity agreement. With those powers, Tohme allegedly executed the transfer of copyright interests in artwork to charities and took possession and control over some of Jackson's property.
In March, 2009, Jackson terminated Tohme, according to the estate. In their lawsuit against Tohme, Branca and McLain seek to "unwind the self-serving and unconscionable agreements," recover property, and gain damages from breaches of fiduciary duty.
Tohme is responding in part by suing the executors of the estate for breaching the indemnity agreement.