2-6 Final Vol 3

Capital Reporting Company
IN THE UNITED STATES TAX COURT

_____________________________________________________
In the Matter of: )
)
ESTATE OF MICHAEL J. JACKSON, )
DECEASED, JOHN G. BRANCA, )
CO-EXECUTOR AND JOHN MCCLAIN, )
CO-EXECUTOR, )
)
Petitioner, )
)
v. )Docket No: 17152-13
)
COMMISSIONER OF INTERNAL REVENUE,)
)
Respondent. )
Pages: 202 through 229
Place: Los Angeles, California
Date: February 6, 2017
(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

202
1 IN THE UNITED STATES TAX COURT
_____________________________________________________
2 In the Matter of: )
)
3 ESTATE OF MICHAEL J. JACKSON, )
DECEASED, JOHN G. BRANCA, )
4 CO-EXECUTOR AND JOHN MCCLAIN, )
CO-EXECUTOR, )
5 )
Petitioner, )
6 )
v. )Docket No: 17152-13
7 )
COMMISSIONER OF INTERNAL REVENUE,)
8 )
Respondent. )
9
Room 1172
10 U.S. Tax Court
Edward R. Roybal Center and
11 Federal Building
255 East Temple Street
12 Los Angeles, California 90012
13 February 6, 2017
14 The above-entitled matter came on for
15 trial, pursuant to notice at 4:00 p.m.
16
BEFORE: HONORABLE MARK V. HOLMES
17 Judge
18 APPEARANCES:
19 For the Petitioner:

AVRAM SALKIN, ESQUIRE
20 STEVEN TOSCHER, ESQUIRE
ROBERT S. HORWITZ, ESQUIRE
21 LACEY E. STRACHAN, ESQUIRE
Hochman, Salkin, Rettig, Toscher & Perez
22 9150 Wilshire Boulevard, Suite 300
Beverly Hills, California 90212
23 (310) 281-3200
24
25

203
1 APPEARANCES Cont.
2
HOWARD WELTZMAN, ESQUIRE
3 Kinsella Weitzman Iser Kump & Aldisert, LLP
808 Wilshire Boulevard, 3rd Floor
4 Santa Monica, California 904010
(310) 566-9800
5
JERYLL S. COHEN, ESQUIRE
6 Hoffman Sabban & Watenmaker
10880 Wilshire Boulevard, Suite 2200
7 Los Angeles, California 90024
(310) 470-6010
8
For the Respondent:
9 DONNA HERBERT, ESQUIRE
MALONE CAMP, ESQUIRE
10 SEBASTIAN VOTH, ESQUIRE
DENISE LARSON, ESQUIRE
11 JORDAN MUSEN, ESQUIRE
Internal Revenue Service
12 Office of Chief Counsel
950 Hampshire Road, East Pavilion
13 Thousand Oaks, California 91361
(805) 367-0079
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1 C O N T E N T S
2 WITNESSES: DIRECT CROSS REDIRECT RECROSS
3 FOR THE PETITIONER:
4 John Branca 223 -- -- --
5 FOR THE RESPONDENT:
6 (None) -- -- -- --
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1 E X H I B I T S
2 EXHIBITS: IDENTIFIED RECEIVED
3 (None) -- --
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1 P R O C E E D I N G S
2 (4:00 p.m.)
3 MR. VOTH: Can we have a brief break, Your
4 Honor?
5 THE COURT: Of course. Come get me when
6 they're ready.
7 THE CLERK: All rise.
8 (Whereupon, at 4:00 p.m., a brief recess
9 was taken; proceeding resumed at 4:17
10 p.m.)
11 THE CLERK: All rise. The court is now
12 back in session.
13 THE COURT: Please be seated. Mr. Branca?
14 Oh, there he is.
15 MR. WEITZMAN: So I just meant I was done,
16 Your Honor.
17 THE COURT: Mr. Voth, the floor is yours.
18 MR. VOTH: Yes. Thank you, Your Honor. So
19 Respondent has decided to call Mr. Branca during its
20 case in chief. Now Respondent wants to confirm that
21 Mr. Branca will be -- given that he's a party he'll
22 be available during that time. And we can make
23 whatever necessary arrangements with Petitioner's
24 counsel.
25 THE COURT: We will do that, Mr. Voth.

207
1 MR. WEITZMAN: So I assume they're
2 foregoing any cross examination on any questions
3 asked on direct?
4 THE COURT: Only. Yes. You can make
5 objections on scope in other words.
6 MR. WEITZMAN: Okay. But, I mean, I just
7 want the record clear for --
8 THE COURT: Oh, he's --
9 MR. WEITZMAN: -- Mr. Voth.
10 THE COURT: That's a deal.
11 MR. WEITZMAN: You're assuming he totally
12 gets it. I just want to make sure.
13 THE COURT: Okay. Go ahead, Mr. Voth.
14 MR. VOTH: Respondent will during his dir-
15 -- will call Mr. Branca during its case in chief and
16 proceed as Respondent desires. And given that he is
17 the opposing party, Respondent will in a way cross
18 examine Mr. Branca with whatever topics Respondent
19 deems suitable.
20 MR. WEITZMAN: I thought that's what we
21 were trying to avoid.
22 THE COURT: Well, you have to object beyond
23 the scope.
24 MR. WEITZMAN: I understand.
25 THE COURT: And I will enforce so rules if

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1 they're being -- going to call him on their case in
2 chief.
3 MR. WEITZMAN: Thank you.
4 MR. VOTH: Now, in terms -- I just want to
5 clarify that --
6 THE COURT: You're limited to the -- you're
7 limited in your cross examination to the topics
8 discussed on direct examination under these rules.
9 MR. VOTH: Right. But at this point we
10 have no cross, Your Honor.
11 THE COURT: Oh.
12 MR. VOTH: Right. That's --
13 THE COURT: Okay. I see. Then actually
14 Mr. Branca is free to step down and we'll see if the
15 Government calls him on their case in chief.
16 MR. WEITZMAN: But I -- if I didn't make my
17 record clear, as I understand your ruling on our
18 request early on, the Respondent -- no, they're the
19 --
20 THE COURT: They're the Respondent.
21 MR. WEITZMAN: Got it. This is not my
22 venue, Your Honor. The Respondent should not be
23 allowed to cross examine in their direct. Their
24 direct is to raise subjects that are new and for
25 their case and that's why --

209
1 THE COURT: Not necessarily new, but for
2 their case, yes. Moreover, they'll probably, if you
3 insist, have him declared a hostile witness or
4 whatever it is so they can lead him and pretend that
5 it's cross examination in terms of the form of
6 questions, which is perfectly fine, too.
7 MR. WEITZMAN: Okay. So -- so --
8 THE COURT: And then your re- -- your cross
9 examination of their direct testimony of Mr. Branca
10 will be limited similarly to whatever questions and
11 topics they discuss.
12 MR. WEITZMAN: So when we talked sometime
13 earlier on the phone about getting a witness on and
14 off in one appearance it doesn't seem to apply --
15 THE COURT: Not happening now, yeah.
16 MR. WEITZMAN: Why?
17 THE COURT: Well, they want to present
18 their case in chief in some coherent way. And I'm
19 prepared in a trial of this length to let them do so
20 especially when it comes to a party who should be
21 here more or less at call.
22 MR. WEITZMAN: There's not much I can say
23 except --
24 THE COURT: Yeah.
25 MR. WEITZMAN: -- I probably disagree but

210
1 it doesn't make any difference.
2 THE COURT: Yeah, I understand.
3 MR. WEITZMAN: Okay.
4 THE COURT: Normally it's more efficient to
5 get them on, get them off. But I understand the need
6 for a coherent story in a giant case so.
7 Oh, I do have a few questions for you
8 still, Mr. Branca. You said you were involved in the
9 deal with Sony to create Sony ATV. Did I remember
10 that right?
11 THE WITNESS: Yes.
12 THE COURT: Okay. In the course of that,
13 according to the deal sheet as I understand it, Sony
14 gave $100 million to Mr. Jackson; is that correct?
15 THE WITNESS: 115.
16 THE COURT: 115. Why did they give him 115
17 --
18 COURT REPORTER: I'm sorry. Mr. Branca,
19 could you move the microphone in front of you?
20 THE WITNESS: Oh, I'm sorry. I'm sorry.
21 THE COURT: I need to do that, too. Why
22 did you give the -- why did Sony agree to give $115
23 million to Mr. Jackson to give them half ownership of
24 the combined company?
25 THE WITNESS: We took the position that

211
1 Michael's catalog was more valuable than Sony's
2 publishing company so that that was an equalization
3 payment. I think that's what it was referred to
4 actually.
5 THE COURT: How were the respective
6 catalogs of Sony and ATV when it was owned only by
7 Mr. Jackson valued back in 1995?
8 THE WITNESS: You know, I don't recall. I'd
9 have to go back and look. But generally a catalog
10 would be valued based on what's called the net
11 publisher's share, which is the cash flow after the
12 writers are paid. Whereas an operating company would
13 be valued based on EBITDA profits.
14 THE COURT: Huh. And was your intent at
15 that time to create an operating company or an even
16 bigger, better catalog company?
17 THE WITNESS: By merging ATV into Sony ATV
18 we were accepting the fact that it was going to be an
19 operating company.
20 THE COURT: Did you have a formula in mind
21 to equate value as measured by NPS to value as
22 measured by EBITDA?
23 THE WITNESS: I mean, obviously I don't
24 recall what I -- exactly what I was thinking 21 years
25 ago. It to some degree was a negotiation. But the -

212
1 - and I don't recall what multiples were on catalogs
2 at that time versus, you know, maybe eight times
3 EBITDA as a measure for the operating company.
4 But somehow we got to the point where I
5 convinced them that -- first of all, as I mentioned,
6 Michael needed the money so the exercise for me was
7 to get as much money as possible out of them and
8 still have half the company.
9 THE COURT: But you didn't have any rule of
10 thumb or more precise valuation formula to equalize
11 EBITDA earnings and NPS earnings?
12 THE WITNESS: At the time I'm sure I did. I
13 just don't recall at this time what it was.
14 THE COURT: Was that something that you had
15 experience with in context other than negotiating the
16 Sony ATV deal?
17 THE WITNESS: I mean, within our firm there
18 was the expertise of companies we had represented. In
19 '95, you know, I would have gone -- if I hadn't done
20 it myself, gone to others to be, you know -- to make
21 sure I wasn't -- I was being aggressive, if you will.
22 THE COURT: In 2009 had those ratios
23 changed in any respect that you're familiar with?
24 THE WITNESS: I mean, I would re- -- I
25 would defer to our investment banker Dave Dunn who

213
1 helped us do valuations both in '09 and last year and
2 even today. But generally speaking the multiple
3 that's used for the sale catalogs has come down a bit
4 since the heyday of the music business.
5 THE COURT: Is that a reflection in part of
6 the digitalization revolution?
7 THE WITNESS: Yeah. The risk -- the risk
8 of income going away, being cannibalized. To some
9 degree it's a reflection of interest rates or what
10 other investments are available in the marketplace.
11 Also one key component there was a time
12 when there were six major music companies and several
13 strong independent companies so the competition for
14 music publishing catalogs was intense. There's been
15 a lot of consolidation to the point now where there
16 are only three major companies and one strong
17 independent so the level of competitions gone down.
18 THE COURT: Does that reflect economies of
19 scale in the music publishing industry or is it kind
20 of like microbreweries where technologies advance to
21 the point where there's even more competition but it
22 just takes the form of smaller, lighter, faster
23 companies?
24 THE WITNESS: The latter.
25 THE COURT: What were your -- the terms of

214
1 your relationship with Mr. Jackson at the end of his
2 life by which I mean were you on a retainer, per-job
3 basis, or what other --
4 THE WITNESS: You mean in 2009?
5 THE COURT: 2009, yes.
6 THE WITNESS: When he hired me back in that
7 eight-day period?
8 THE COURT: Yeah.
9 THE WITNESS: We -- in that meeting at the
10 Forum we hadn't got to the point of discussing what
11 the arrangements were going to be. That was
12 something I would have discussed with Michael Kane
13 his business manager. I was assuming it would be 5
14 percent.
15 THE COURT: 5 percent of what?
16 THE WITNESS: Of his entertainment earnings
17 that I was working off.
18 THE COURT: Oh, like an agent or that?
19 THE WITNESS: Yeah.
20 THE COURT: Okay. Was that more or less
21 the way you billed him back during the heyday of --
22 you have to say yes or no, not nod because of the
23 transcript.
24 THE WITNESS: Oh, I'm -- yes. There was a
25 time when we were paid a retainer for doing non-music

215
1 industry work and then 5 percent on music industry
2 earnings as a lawyer, which is different, you know,
3 from the role we have today.
4 THE COURT: Thinking back again to
5 approximately the time of Mr. Jackson's death you had
6 mentioned that there was a great deal of debt owed. I
7 remember one was $40 million in debt to AE- --
8 THE WITNESS: AEG.
9 THE COURT: And what -- were the terms of -
10 - what were the terms of that debt? Was it going to
11 come due shortly?
12 THE WITNESS: They had advanced money to
13 Michael, it was actually approximately $38 million,
14 to prepare for the tour. Whether they had recourse
15 or not became academic when we had an opportunity to
16 put out This is It, but we couldn't put it out
17 without repaying that amount of money.
18 So I used the term a little perhaps more
19 loosely there than I would when referring to the
20 loans that were secured by the assets.
21 THE COURT: Yeah. It's clearly a claim as
22 the bankruptcy courts would say. Now there was
23 approximately $300 million owed that had been secured
24 by the Sony ATV --
25 THE WITNESS: 300 mil- -- yes. Secured by

216
1 Michael's half interest in Sony. That's in addition
2 to the company debt that was inside of Sony.
3 THE COURT: By which you mean it was debt
4 that Sony ATV owed to outsiders, right?
5 THE WITNESS: Yeah. They had borrowed to
6 acquire catalogs, et cetera.
7 THE COURT: Setting that aside, I'm
8 interested in the 300 million. Were the terms of
9 that debt such that it was going to be coming due
10 upon Mr. Jackson's death?
11 THE WITNESS: I -- not on -- that's a good
12 question. I don't recall. We refinanced it. But it
13 was a term loan and the term was always short. It
14 was always two or three years.
15 THE COURT: Was it secured by anything?
16 THE WITNESS: By his interest in Sony ATV.
17 THE COURT: Okay. Were there -- oh, you
18 had mentioned that he had real estate debt, as well.
20 THE COURT: What real estate debt did he
21 have at the time of his death?
22 THE WITNESS: Michael had a home at
23 Havenhurst Avenue in Encino which had been his
24 principal residence, but then he moved out.
25 THE COURT: That was his mom's house?

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1 THE WITNESS: And his mom was living there,
2 yeah.
3 THE COURT: And what were the debt problems
4 or the debt there?
5 THE WITNESS: There was a loan on it of
6 about 5 or $6 million and the utility bills were
7 unpaid -- electrical, water. They were about to get
8 turned off.
9 THE COURT: What were the terms of those
10 loans? Were they going to come due upon Mr.
11 Jackson's death?
12 THE WITNESS: No. That was a -- that was a
13 real estate loan. It was a $5 million real estate
14 loan, first trust deed. But when payments weren't
15 being made one could -- I believe it had already been
16 in -- started the foreclosure process.
17 THE COURT: Who owned Neverland at the time
18 of his death? Owned first. I know --
19 THE WITNESS: It was co-owned by Colony
20 Capital and Michael, but Colony Capital was the
21 majority partner. It was actually a joint venture
22 pursuant to which in addition to the money they had
23 paid Michael they had the right to charge interest on
24 it, they had the right to charge an operating fee,
25 operating expenses, and interest on the operating

218
1 expenses.
2 THE COURT: In the --
3 THE WITNESS: So the 25 million that they
4 had loaned to him at one point -- I think at this
5 point is up past $50 million.
6 THE COURT: And what were the terms of
7 that? Was that going to become due upon his death?
8 THE WITNESS: They owned the asset. They
9 had the right to sell it and take the proceeds that
10 they were entitled to. And if anything was leftover
11 it went to Michael.
12 I didn't -- I didn't count that in the debt
13 because that was a joint venture and there was no
14 recourse on it.
15 THE COURT: Was there any other debt that
16 was hovering around Mr. Jackson at the time of his
17 death?
18 THE WITNESS: Yes. Fortress.
19 THE COURT: What's Fortress?
20 THE WITNESS: Fortress had a -- I believe
21 it was $80 million loan secured by the Mijac catalog
22 and at one point it was secured by Neverland until
23 Colony took them out.
24 THE COURT: Okay. So Fortress is another
25 company?

219
1 THE WITNESS: That is a very aggressive
2 private equity firm back in New York.
3 THE COURT: A usurer.
4 THE WITNESS: You got it.
5 THE COURT: Okay.
6 MR. WEITZMAN: So stipulated.
7 THE COURT: Okay. Do you happen to know
8 the interest rate on that loan?
9 THE WITNESS: I believe it was 16 percent.
10 THE COURT: In 2009?
11 THE WITNESS: Yes.
12 THE COURT: Secured you said by --
13 THE WITNESS: Mijac Music.
14 THE COURT: And was that recourse or was it
15 just secured by the Mijac interest?
16 THE WITNESS: I believe it was secured by
17 Mijac.
18 THE COURT: Okay. Was there any other --
19 oh, and was that about to come due because of his
20 death or --
21 THE WITNESS: No. But we weren't able to
22 make the interest payments. We wouldn't have been
23 and he wasn't able to so foreclosure was certainly
24 more than possible.
25 THE COURT: Okay. Any other debt?

220
1 THE WITNESS: Well, there were a number of
2 creditors' claims that came in shortly after this
3 death of, you know, unpaid bills and monies.
4 THE COURT: Setting aside utilities and
5 phone bills and that kind of stuff, anything
6 substantial?
7 THE WITNESS: Unpaid royalties to John
8 Landis, the director of "Thriller" and "Black or
9 White" and just a number of other.
10 THE COURT: Are we talking millions,
11 hundreds of thousands?
12 THE WITNESS: Millions.
13 THE COURT: Tens of millions or millions?
14 THE WITNESS: 5 to 10 million maybe in
15 total.
16 MR. WEITZMAN: You might -- you might want
17 to direct your question at some point to --
18 THE COURT: To the lawyer?
19 MR. WEITZMAN: -- to me if you want.
20 THE COURT: Okay. If you're on the
21 Government's witness list.
22 MR. WEITZMAN: I don't mean that. Not yet.
23 THE COURT: All right. Anything else that
24 I've missed in terms of debt?
25 THE WITNESS: No. I think that's

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1 THE COURT: Did you come in the days and
2 weeks after Mr. Jackson's death to some understanding
3 of the cash flow needs of this estate for this debt
4 and for anything else it has to do?
5 THE WITNESS: I mean, yeah. I mean, there
6 is an accountant named Michael Kane who had been
7 Michael's accountant. But the cash flow needs were
8 certainly the debt service to begin with. And beyond
9 that, I mean, we're going to have bills to pay the
10 people we were hiring to help with the estate. But
11 the cash flow needs were obviously substantial.
12 THE COURT: How much per month?
13 THE WITNESS: I don't recall.
14 THE COURT: Was it in the millions?
16 THE COURT: Tens of millions?
17 THE WITNESS: No.
18 THE COURT: Just one more question.
19 THE WITNESS: Excuse me. Let me just say
20 one thing. When you tens of millions, if you're
21 looking at 9 percent interest on 300 million and 16
22 percent interest on 80 million, you probably are
23 looking at tens of --
24 THE COURT: You're getting very close to
25 tens of millions.

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2 THE COURT: Okay. You said you were
3 familiar with the album Thriller?
4 THE WITNESS: Yes.
5 THE COURT: What exactly does the "funk of
6 40,000 years mean"?
7 THE WITNESS: Karma. Bad karma.
8 THE COURT: Ah! Is that the same use of
9 the word "funk" with regard to Mr. James, Rick James?
10 THE WITNESS: Rick James, yeah.
11 THE COURT: That's also karma?
12 THE WITNESS: Yeah. I see you've been
13 listening to sole music lately.
14 THE COURT: He's from -- no. He's from
15 Buffalo. We know him up there.
16 THE WITNESS: Okay.
17 THE COURT: Richard James.
18 THE WITNESS: Okay.
19 THE COURT: Then he went to California and
20 everything --
21 THE WITNESS: Everything fell apart after
22 that.
23 MR. WEITZMAN: I only have two follow-up
24 questions --
25 THE COURT: Okay.

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1 MR. WEITZMAN: -- to your questions if I
2 may.
3 FURTHER DIRECT EXAMINATION
4 BY MR. WEITZMAN:
5 Q Mr. Branca, when Michael Jackson passed
6 away do you know whether there was any cash available
7 --
8 THE COURT: Ah!
9 THE WITNESS: Ah-ha.
10 BY MR. WEITZMAN:
11 Q -- cash available to --
12 A Yes.
13 Q -- to pay the debts that we dealt with with
14 respect to Havenhurst and loan service and just
15 living expenses for the children?
16 A Well, we did meet with Mr. Tohme because we
17 were trying to marshal the assets.
18 Q Why did we meet with Mr. Tohme?
19 A Because we had -- we believed that he might
20 be holding bank accounts in Michael's name. So in
21 our first meet with Mr. Tohme he told us he had --
22 absolutely had no money that belonged to Michael
23 Jackson.
24 So I think -- I can't recall if we put a
25 private investigator on it or you followed up,

224
1 Howard, but we found out he had several million
2 dollars of Michael Jackson's money.
3 Q And did we ever get some of that money back
4 from Mr. Tohme?
5 A We got some of it.
6 Q Do you remember how much?
7 A No.
8 THE COURT: Did you have any money of Mr.
9 Jac- -- did you know of any money that Mr. Jackson
10 had that was not with Mr. Tohme but subject to his
11 control?
12 THE WITNESS: Well, Michael Kane who's
13 still the accountant for the estate, you know, had
14 bank accounts. So from that $38 million advanced by
15 AEG there may have been some money in the accounts,
16 but it wasn't very substantial.
17 THE COURT: Not $10 million?
18 THE WITNESS: No.
19 THE COURT: More than a million?
20 THE WITNESS: Maybe in that vicin- -- I'm
21 just speculating.
22 THE COURT: Okay.
23 MR. WEITZMAN: I only have one more
24 question.
25 BY MR. WEITZMAN:

225
1 Q Were you -- did you believe there was not
2 enough money to pay the bills?
3 A Absolutely.
4 Q So that -- that's not quite a million
5 dollars, is it? So I don't mean to be impeaching my
6 own witness.
7 A Even if we had a million dollars --
8 MR. WEITZMAN: No further questions.
9 THE WITNESS: -- it wouldn't -- it wouldn't
10 have --
11 THE COURT: No. No further questions. Do
12 you have any follow-up questions, Mr. Voth?
13 MR. VOTH: No, Your Honor.
14 THE COURT: You might want to ask them in
15 the series during your direct. Okay. Thank you very
16 much, Mr. Branca.
17 THE WITNESS: Thank you, Your Honor.
18 THE COURT: Next, Mr. Toscher, Mr.
19 Weitzman?
20 MR. TOSCHER: Your Honor, we have another
21 witness, but we thought there was going to be cross
22 examination so --
23 THE COURT: I did, too.
24 MR. TOSCHER: -- I beg The Court's
25 indulgence to -- can we start tomorrow with Ms. Karen

226
1 Langford.
2 THE COURT: What's her role in this?
3 MR. TOSCHER: Karen Langford is Mr.
4 Branca's assistant. She has the title of a
5 paralegal.
6 THE COURT: Oh, okay. I know who you're
7 talking about.
8 MR. TOSCHER: That understates --
9 THE COURT: Her significance.
10 MR. TOSCHER: Yeah. I don't want to --
11 THE COURT: I do remember her now. What
12 other witnesses will we have tomorrow?
13 MR. TOSCHER: David Dunn, who's the
14 investment banker Mr. Branca referred to, and there
15 may be -- we're not quite sure. We think that'll
16 take the day.
17 THE COURT: Okay.
18 MR. WEITZMAN: Your Honor, may I, Your
19 Honor, please with respect to Mr. Branca's potential
20 recall.
21 THE COURT: Yes.
22 MR. WEITZMAN: I assume that won't be this
23 week. And I wanted to ask through The Court could
24 inquire whether or not it's anticipated they want to
25 recall him this week because -- it's okay if I do

227
1 this, right -- because this is Grammy week. He's
2 really kind of backed up this week.
3 THE COURT: It's Grammy week?
4 MR. WEITZMAN: Yeah. In other words, it's
5 a -- it's a huge business week in the music industry.
6 THE COURT: I've heard of Grammys.
7 MR. WEITZMAN: I know tomorrow or Wednes- -
8 - Thursday and Friday are really going to --
9 THE COURT: Okay.
10 MR. WEITZMAN: So if you can just inquire
11 of the Government --
12 THE COURT: I mean, we don't have to call
13 him during --
14 MR. VOTH: No, absolutely not. No, we
15 won't.
16 THE COURT: -- like this industry
17 convention or something.
18 MR. VOTH: We have a great working
19 relationship with Petitioner's counsel and --
20 THE COURT: Yeah. Try to work those kind
21 of things out --
22 MR. WEITZMAN: Thank you, Your Honor.
23 THE COURT: -- but I'm happy to bless
24 anything you come up with. Okay. We're not -- what
25 do you do for the Grammys?

228
1 This is off the record.
2 (Whereupon, a brief discussion was held
3 off the record.)
4 THE COURT: Very good. Ms. Langford and
5 Mr. Dunn tomorrow.
6 MR. TOSCHER: Yes, Your Honor.
7 THE COURT: We are done for today. Thank
8 you very much.
9 MR. VOTH: Thank you, Your Honor.
10 THE CLERK: All rise, please.
11 (Whereupon, at 4:45 p.m., the above-
12 entitled matter was concluded.)
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229
1 CERTIFICATE OF TRANSCRIBER AND PROOFREADER
2 CASE NAME: Estate of Michael J. Jackson,
3 Deceased, John G. Branca, Co-Executor and John
4 McClain, Co-Executor v. Commissioner
5 DOCKET NO.: 17152-13
6 We the undersigned, do hereby certify that the
7 foregoing pages, numbers 201 through 229, inclusive,
8 are the true, accurate and complete transcript
9 prepared from the verbal recording made by electronic
10 recording by Steve Hopkins, on February 6, 2017,
11 before the United States Tax Court at its session in
12 Los Angeles, California, in accordance with the
13 applicable provisions of the current verbatim
14 reporting contract of the Court, and have verified
15 the accuracy of the transcript by comparing the
16 typewritten transcript against the verbal recording.
17
18
19 ____________________________________
20 Lisa Beauchamp February 9, 2017
21 (Transcriber) (Date)
22
23 ____________________________________
24 Cynthia Cooley February 10, 2017
25 (Proofreader) (Date)

Page 1
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Page 3
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Page 5
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Page 7
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Capital Reporting Company

IN THE UNITED STATES TAX COURT

Pages: 202 through 229

Place: Los Angeles, California

Date: February 6, 2017

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

14 The above-entitled matter came on for

15 trial, pursuant to notice at 4:00 p.m.

19 For the Petitioner:

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

2 WITNESSES: DIRECT CROSS REDIRECT RECROSS

3 FOR THE PETITIONER:

4 John Branca 223 -- -- --

5 FOR THE RESPONDENT:

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

2 EXHIBITS: IDENTIFIED RECEIVED

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

3 MR. VOTH: Can we have a brief break, Your

5 THE COURT: Of course. Come get me when

7 THE CLERK: All rise.

8 (Whereupon, at 4:00 p.m., a brief recess

9 was taken; proceeding resumed at 4:17

11 THE CLERK: All rise. The court is now

13 THE COURT: Please be seated. Mr. Branca?

14 Oh, there he is.

15 MR. WEITZMAN: So I just meant I was done,

17 THE COURT: Mr. Voth, the floor is yours.

18 MR. VOTH: Yes. Thank you, Your Honor. So

19 Respondent has decided to call Mr. Branca during its

20 case in chief. Now Respondent wants to confirm that

21 Mr. Branca will be -- given that he's a party he'll

22 be available during that time. And we can make

23 whatever necessary arrangements with Petitioner's

25 THE COURT: We will do that, Mr. Voth.

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

2 foregoing any cross examination on any questions

4 THE COURT: Only. Yes. You can make

5 objections on scope in other words.

6 MR. WEITZMAN: Okay. But, I mean, I just

7 want the record clear for --

8 THE COURT: Oh, he's --

9 MR. WEITZMAN: -- Mr. Voth.

10 THE COURT: That's a deal.

11 MR. WEITZMAN: You're assuming he totally

12 gets it. I just want to make sure.

13 THE COURT: Okay. Go ahead, Mr. Voth.

14 MR. VOTH: Respondent will during his dir-

15 -- will call Mr. Branca during its case in chief and

16 proceed as Respondent desires. And given that he is

17 the opposing party, Respondent will in a way cross

18 examine Mr. Branca with whatever topics Respondent

20 MR. WEITZMAN: I thought that's what we

21 were trying to avoid.

22 THE COURT: Well, you have to object beyond

24 MR. WEITZMAN: I understand.

25 THE COURT: And I will enforce so rules if

(866) 448 - DEPO www.CapitalReportingCompany.com © 2016

3 MR. WEITZMAN: Thank you.

4 MR. VOTH: Now, in terms -- I just want to

6 THE COURT: You're limited to the -- you're

7 limited in your cross examination to the topics

8 discussed on direct examination under these rules.

9 MR. VOTH: Right. But at this point we