NEWBERRY — Reviewers are raving: the biopic of music legend James Brown opened in theaters across the nation on Aug. 1. But who will benefit from the success of the movie “Get On Up?” The current trustee of the Brown estate leaves that question and many others unanswered.
In the 2013 accounting report for the Brown estate, from the Aiken Probate Court, sole trustee Russell Bauknight of Columbia lists disbursements of $2,475,246 and receipts of $2,774,258.
Of the total in receipts, $1.75 million was provided by transfers from two corporations, but no accounting was provided for them. Also unknown are their shareholders, officers, or beneficiaries.
Since Bauknight was appointed trustee by former Attorney General Henry McMaster in May 2009, he has formed two corporations: JB BIOPIC LLC (Oct. 31, 2012) and JB IP Holdings, LLC (April 25, 2013). The Secretary of State website also lists Bauknight as the registered agent for James Brown Enterprises Inc.
BIOPIC transferred $600,000 into the estate in 2013, and James Brown LLC transferred $1,150,000.
BIOPIC is listed as “profit” by the Secretary of State, but the estate accounting does not reveal what James Brown corporations are earning or their value. When asked in two emails (July 7 and July 13) for information about who the beneficiaries, officers and/or shareholders are, Bauknight’s attorney David Black of Nexsen Pruet in Columbia did not respond.
The value of these corporations is listed at $1 in Bauknight’s 2013 accounting.
It is common practice when opening an estate to use a $1 value for assets as a “place-holder” until an “inventory and appraisement” form is completed. After five years, Bauknight is still submitting the value of “other assets” at $1. Bauknight explains this practice in a footnote: “Consistent with prior accountings filed by the current Personal Representative, beginning and ending carrying balances of all other assets are continuing to be reported at the indicated $1 amount.”
In response to Freedom of Information Act requests for documents related to the James Brown corporations, the Attorney General produced none but referred the question to Bauknight and the Secretary of State.
The Secretary of State website lists no James Brown charity with Bauknight as registered agent, even though Brown’s estate plan left his music empire to an education charity for needy students in South Carolina and Georgia, the “I Feel Good” trust.
Brown died in 2006, and in 2007 his will and trust were contested by companion Tomirae Hynie and several children, despite a clause that said anyone who contests either document receives nothing.
In 2009 McMaster worked a settlement deal that gave the will contestants over half the assets Brown left to charity. Also as part of the deal, Brown’s directive to have three trustees was ignored, and the AG took for himself the right to appoint a single trustee who would be chosen by and serve “at the pleasure” of the AG.
The McMaster settlement was appealed by the second set of trustees, Adele Pope of Newberry and Robert Buchanan of Aiken. In May 2013 the Supreme Court overturned the settlement, calling it a “dismemberment” of Brown’s “noble” estate plan.
The Court also voided Bauknight’s appointment as trustee and returned the case to Aiken with a directive to appoint trustees in accordance with Brown’s estate documents.
In September 2013 Circuit Court Judge Doyet Early interviewed five candidates for the trustee positions, but Bauknight told the court he would refuse to serve if other fiduciaries were appointed. He also asked the court to appoint David Sojourner as a limited special administrator (LSA) for the sole purpose of defending against the will contests.
The court ruled as Bauknight requested, in defiance of Brown’s estate plan and the Supreme Court’s directive.
In the 2013 estate accounting, Bauknight reports royalties of about $520,000. From 2000 through 2007 Brown’s royalties averaged three million a year, according to filings with an affidavit in federal court from Richard Alexander, president of R.B. Alexander & Co. Ltd.
The income from royalties and the transfers from corporations raise questions related to Bauknight’s at-death valuation of Brown’s music empire.
After his appointment by McMaster, Bauknight filed documents with the IRS that claimed the at-death value of Brown’s music empire — including rights to over 800 songs and rights to his image — was $4.7 million.
According to other court filings, all previous trustees valued the music empire at between $85-100 million, minus a $15 million debt to a New York teachers union.
One of the original Brown trustees, Albert “Buddy” Dallas, has claimed that a $100 million offer was on the judge’s desk when the McMaster settlement deal was approved, and he recently characterized the $4.7 million value as “absurd.” In 2006, the year Brown died, the Royal Bank of Scotland appraised only the royalties (not rights to Brown’s image) for $42 million in relation to a proposed loan.
Bauknight has refused to release his $4.7 appraisal or the documents used to prepare it. The Probate Code form requires the name of the appraiser, but Bauknight did not provide it.
Bauknight’s attorney David Black did not respond to emailed questions related to the accounting, but his law firm, Nexsen Pruet, received the largest disbursements in 2013 from the Brown estate, $772,000. Bauknight Pietras and Stormer received $360,000, and the law firm representing LSA David Sojourner, Adams Reese, received $253,170 after being involved in the case for less than three months.
Listed in receipts for 2013 is a $500,000 payment from the Columbia law firm Sweeny Wingate and Barrow. The Wingate firm represents Bauknight, the Attorney General, the Legacy Trust (created by the McMaster settlement), and several will contestants in a lawsuit against the second set of trustees.
The suit was filed after Pope and Buchanan appealed the McMaster settlement, and the suit alleges they caused tens of millions in damages to the Brown estate during their 18-month tenure as trustees, despite Bauknight’s $4.7 million at-death valuation.
The Wingate firm was hired under a contingency fee contract and was to be paid a percentage from what is recovered. The firm has asked for a stay in the case, Richland 4900, until the estate proceedings in Aiken are concluded, and it is unclear who their clients are. The Attorney General has asked to be removed as a party, and AG Alan Wilson now claims he was never a plaintiff even though his name has appeared on all pleadings.
The Wingate firm is also in default in 4900 for not filing documents promptly. Still, the Brown estate paid the firm more than $500,000 in 2012. The 2013 accounting reflects a partial return of the 2012 payments.
The pot of money in the Brown estate will likely grow larger in the next few months.
Music industry executive Frank Copsidas of Intrigue Music Management was involved with the Brown music empire for many years. He commented: “Any exposure such as a major-release movie will once again increase awareness of Mr. Brown’s music, which should lead to increased use of his music in television, movie, and commercial advertising placements, not to mention merchandise sales. That, in turn, would lead to an increase in the value of the estate.”