Experts Expect Custody Battle Over Jackson's Kids, Legal Battle Over Finances

By Paul Farhi
Washington Post Staff Writer
Tuesday, June 30, 2009

LOS ANGELES, June 29 -- Now comes the sorting out.

Michael Jackson left behind three children, a pile of debts and a complicated financial empire that are likely to be the subjects of legal proceedings and courtroom battles for years, legal experts said Monday as the pop icon's family sought to take control of his affairs.

The late singer's mother, Katherine Jackson, 79, was granted temporary guardianship of his children Monday by a Los Angeles court and moved with her husband, Joseph Jackson, to control his major assets, including his stake in the Beatles song catalogue and his Neverland ranch near Santa Barbara, Calif.

But the elder Jacksons face a potential custody battle with Debbie Rowe, Michael Jackson's former wife and the estranged mother of his eldest children, Michael Jr., 12, and Paris, 11. Jackson married Rowe, an Australian who had served as his nurse, in 1996 and divorced her in 1999.

She gave up all custodial rights to their two children in a 2006 settlement with her former husband. But specialists in California family law say Rowe might have a strong claim if she asserts her right to custody.

"Deborah Rowe has a biological link and is in a better position than the grandparents," said Marshall Waller, a certified family-law specialist who practices in Beverly Hills. "The law tends to favor placing the children in the custody of the biological parent. . . . If she steps up, they would go to her unless the court determines that her guardianship would be harmful to the children."

Rowe's intentions aren't clear; she has made no public statements since Jackson's death Thursday. However, Iris Finsilver, a lawyer who represented Rowe in her custody case with Jackson, told the Associated Press on Friday that it was likely Rowe would seek custody. Finsilver could not be reached Monday.

A complicating factor is a contract that Rowe signed with Jackson, waiving her parental rights. She later went to court to void the contract, and in 2006 an appeals court ruled in her favor. Jackson and Rowe settled the custody issue out of court, for undisclosed terms.

Although Rowe retained her parental, if not custodial, rights, the contract "isn't a demonstration of a great commitment as a parent," commented Scott Altman, a law professor at the University of Southern California. "I am sure the court will notice some wavering in her commitment to her children. But it doesn't, in and of itself, waive your right to custody."

The outcome "depends on facts that we don't know right now," Altman added. "Has she seen the kids and been involved in their lives somehow over the years? If she has, she's very likely to get custody. Or if she's gone years without seeing them, it wouldn't surprise me if the court said the children's best interest is served by someone else."

A third Jackson child, Prince Michael, 7, presents an even more unusual set of custodial issues. The youngest Jackson, known as "Blanket," was born to an anonymous surrogate mother, apparently with donated eggs and sperm, and raised exclusively by Michael Jackson.

It's unclear who can claim a biological link to the child, or whether anyone ever will. But even if a woman comes forward asserting maternity, "it's very unlikely that after not having contact with the child for seven years that the court will give her standing," Altman said.

In view of his dispute with Rowe, Jackson probably had executed a "nomination of guardian," a legal document naming someone to care for his children in the event of his death, Waller said. But courts don't always abide by the deceased's wishes, he said.

In their petition to the court Monday, Katherine Jackson's lawyers said Michael Jackson's children "have a long-established relationship with their paternal grandmother and are comfortable in her care."

The Jacksons also asked to be named administrators of their son's estate and said they would use its assets for his children, who are the sole beneficiaries under state law. The family said it had not yet determined the value of Jackson's assets.

In a televised briefing outside the Jackson family's home in Encino on Monday, Joseph Jackson said the family hasn't seen the will and would await the results of a second autopsy commissioned by the family before announcing funeral arrangements.

Jackson's finances involve guesswork because his most valuable asset -- his stake in Sony/ATV Music Publishing -- is difficult to assess. The joint venture with Sony Corp.'s Sony Music unit holds the copyrights to 750,000 songs by such artists as Bob Dylan and the Jonas Brothers. Its income stream comes from royalties paid by anyone who uses or plays the songs for a commercial purpose, such as radio or movie soundtracks.

The single most valuable piece of the vast catalogue might be the rights to 236 Beatles songs that Jackson acquired for $47.5 million in 1985, after a bidding war with Paul McCartney and Yoko Ono. The Beatles songs have been a long-running annuity for Jackson and Sony; some of the songs will be used later this summer in a Beatles version of the video game "Rock Band."

While some experts peg the joint venture's value at $1 billion, it's unclear how much of it Jackson still owns, given heavy borrowings against it over the years, and whether Sony would contest the sale of his remaining stake.

Jackson took out bank loans totaling $270 million in 2000, using his stake in Sony/ATV and his own song copyrights as collateral, according to a lawsuit filed in 2002 by a creditor.

Assuming creditors and other claimants don't tie up Jackson's estate in court, Jackson's executors will probably spend months identifying his assets and liabilities. After paying taxes and satisfying creditors, whatever remains would go to his beneficiaries, most likely his children.

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