Sat Oct 22 23:53:15 SAST 2016

godfather's legacy

By unknown | Apr 25, 2008 | COMMENTS [ 0 ]

Lynnley Browning

Lynnley Browning

A dispute over the estate of the legendary soul singer James Brown has reached a bitter new pitch - on Wall Street.

The estate's guardians are accusing Morgan Stanley, the investment bank, of failing to prevent the estate's previous manager, David G Cannon, from draining millions of dollars held for Brown at the bank.

The money, which was to have been used to finance Brown's lavish lifestyle, came from the 1999 sale of R202 million of Pullman Bonds that were tied to Brown's future royalty income.

The Brown estate's guardians have already sued Cannon and two other former business managers, contending that the three men defrauded Brown, the Godfather of Soul, over many years. On Monday the guardians, who are court-appointed trustees, filed a separate civil lawsuit against Morgan Stanley. Both lawsuits seek to recover the lost money as well as damages.

It is unclear how much is left of Brown's estate, though his songs, including classic soul hits like I Got You (I Feel Good), continue to produce royalties.

After Brown died on December 25 2006, a welter of lawsuits emerged involving his children and grandchildren, people who claim to be his children, his wives, and women who claim to be his wives, each seeking a piece of the singer's estate.

In a statement on Wednesday, Morgan Stanley said that the newest lawsuit "is without merit and we will contest it vigorously". The bank said it had documentation authorising Cannon to manage the funds in question.

Though held in the name of James Brown Enterprises, the Morgan Stanley investment account was set up to produce R7,7 million a year for Brown's personal use.

The estate trustees, Adele J Pope and Robert L Buchanan Jr, who are both lawyers, accuse Cannon of improperly engineering R53 million in withdrawals from 2000 to 2002 to James Brown Enterprises, which was controlled by Cannon and which, with Brown's trust, controlled the bulk of Brown's estate. Cannon then transferred R28 million to himself, the new lawsuit contends. The entire R70 million account was depleted by 2002.

Joseph Lizzio, the Morgan Stanley financial adviser who oversaw the account, said in a 2007 deposition that "it was just understood that the account was for Brown's personal use, not for Cannon or for business enterprises".

Lizzio said that he questioned Cannon about the transfers and received cursory replies, and even tried to call Brown once but could not reach him. Lizzio said he was worried about offending Brown by calling him too much.

While it is not atypical for estate lawyers or court-appointed trustees to sue former business managers, it is unusual for them to sue the banks that managed the accounts overseen by the former managers, said Alan F Rothschild an estates lawyer who is a senior member of the section of the American Bar Association that focuses on estates and trust law.


Login OR Join up TO COMMENT