Posted by Auction House Settles Lawsuit with Michael Jackson about Memorabilia – MB#39
MAY 18 – After all of the blustering talk via press releases, Universal Express (UE) has settled a lawsuit brought against them by Michael Jackson over the sale of his memorabilia.
Universal Express had previously called the lawsuit against them “frivolous” and claimed they would prove ownership. They settled the case today right before a court hearing was supposed to take place.
In an Associated Press report today (May 18), one of the attorneys for UE admitted that “very little” items belonging to Michael Jackson will be a part of the auction. Ouch.
Previous media reports claimed UE was threatening to release “embarrassing items” if Jackson didn’t back down. Claims of “paintings of naked boys” and other such ridiculous nonsense were floating in the media.
However, no source — independent or otherwise — who had access to the collection of material before it was sold to UE has confirmed that there were any “embarrassing items” in the collection.
Even tabloid reporter Diane Dimond, who was shown the items in 2004 before they were sold to UE, says she never saw any such items in the collection during a May 17th appearance on Nancy (dis)Grace’s CNN show.
You could bet that if Dimond had seen such items, she would have been on the phone calling up the Santa Barbara County District Attorney’s office back in 2004.
Some observers say it’s doubtful that Jackson would have ‘backed down’ from UE’s apparently hollow threat considering he had already sat through a 4 month trial where every piece of anything slightly embarrassing about his personal life was plastered all over the courtroom for a jury to see.
There are also some misleading statements about the alleged value of the items in UE’s possession. In a previous press release from UE, they claimed the items they have were worth “hundreds of millions of dollars” (see Michael ordered to court to determine ownership of auction items).
However, according to reports released today as well as court documents, that figure has shrunk down to “$50 million”. As mentioned above, Jeffrey Sylvester, one the attorneys representing UE, is quoted in an Associated Press article as saying the following:
Jeffrey Sylvester, a Las Vegas lawyer for Universal, said "very little" of Jackson's personal items would be sold. (see Memorabilia Settlement, Bid to Block Auction Dropped)
For now we’ll leave you to draw your own conclusions as to who “backed down” and why not many items belonging to Michael Jackson will be sold after this settlement agreement was reached earlier today.
Universal Express is no stranger to legal proceedings either. Earlier this year a New York Federal District Court judge ordered the company to pay over $25M after violating securities trading laws and issuing misleading press releases inflating the value of those securities.
The CEO of UE, Richard Altomare, was ordered to pay $3.1M and Chris Gunderson was ordered to pay $794,711. UE is currently appealing the verdict (see Damages against Universal Express, officers total $25.7 million).
The South Florida Business Journal reported in an April 13 2007 article that UE issued 12.9 billion shares in 2006. I suppose they simply forgot to tell the SEC about it. Woops!
If they had followed the rules, they would have been required to file a public offering or private placement memorandum with the SEC according to the judge’s ruling in that securities case.
The company claimed they could engage in such behavior as a result of a 1994 bankruptcy court case they were involved in. The judge disagreed. In the last 6 months of 2006, UE is reported to have generated $5 million from issuing common stock for cash.
They also signed an agreement to pay $5 million for the Jackson items. The problem is UE’s year-end filing with the SEC showed that they only had $8.7 million in assets and only $335,137 “in cash and equivalents”. Not that I care all that much about other peoples’ money, but one wonders how they paid for the Jackson memorabilia. That is, if they paid in full up front.
The auction of memorabilia is scheduled to go on at the end of this month apparently without a lot of Michael Jackson’s stuff. Stay tuned.
-MJEOL