Court told of Jackson's financial troubles
A forensic accountant has testified that Michael Jackson owed $285-million more than he had in assets about the time a damaging documentary was aired, bolstering prosecutors’ claims that financial distress led the superstar to panic.
Accountant John Duross O’Bryan testified on Tuesday that he traced Jackson’s finances from 1999 to 2004 at the request of prosecutors, and concluded that the singer spent $20-million to $30-million more every year than he earned.
O’Bryan said by February 2003—the month that the Living with Michael Jackson documentary aired—Jackson had $10,5-million in unpaid vendor invoices and only $38 000 in cash in bank accounts.
Jackson (46) is accused of molesting a 13-year-old boy at his Neverland ranch in February or March 2003, giving him alcohol and conspiring to hold the accuser’s family captive to get them to rebut the documentary.
Prosecutors contend the superstar was in deep financial trouble at the time and was afraid the broadcast—in which the singer said he allowed children to sleep in his bed—would harm his image.
Defence attorneys argued Jackson had plenty of financial resources.
Another witness, a sheriff’s investigator, said Jackson’s ex-wife Deborah Rowe told him last year that the singer was a “sociopath” who considered his children possessions. The testimony from sheriff’s Sergeant Steve Robel was aimed at countering testimony last week in which Rowe unexpectedly praised Jackson.
On Wednesday, the prosecution was to resume its questioning of Rudy Provencio, who worked with Jackson and an associate, Marc Schaffel, on a planned charity recording. Schaffel is one of several men named by prosecutors as unindicted co-conspirators in the case.
Under questioning by Deputy District Attorney Gordon Auchincloss, O’Bryan said he obtained only one balance sheet, from June 30 2002, which showed Jackson with a net worth of negative $285-million.
He said this included assets of $130-million and liabilities of $415-million.
“Does this mean Michael Jackson is bankrupt?” asked the prosecutor.
“No, it doesn’t,” said the witness.
However, O’Bryan said, there was “an ongoing cash crisis, not enough cash to pay bills”.
On cross-examination, defence attorney Thomas Mesereau Jnr suggested that the accountant underestimated the value of Jackson’s half-share of the Sony-ATV music catalogue, which contains the rights to works of artists including The Beatles.
Mesereau said the catalogue was worth $1-billion in 2003 and there have been estimates that it is now worth between $4-billion and $5-billion.
The accountant testified that although Jackson and Sony each own half the catalogue, Jackson would have gotten only $200-million for his share because he has taken more money in royalties from the catalogue than Sony.
Mesereau also suggested the accountant had not considered lucrative offers available to Jackson as an entertainer, including a $100-million offer to do a world tour in 2002.
“Wouldn’t it be relevant if you knew Mr Jackson could accept one opportunity and solve [his liquidity problem] in a day?” Mesereau asked.
“If it could be solved, why wasn’t it?” the accountant replied.—Sapa-AP
AP special correspondent Linda Deutsch contributed to this report