AIKEN — The son of music legend James Brown has challenged a May 8 status report on his father’s estate submitted to the S.C. Supreme Court by Aiken Judge Doyet Early.
In a May 13 filing, Daryl Brown said the Aiken Court had not allowed discovery on several key questions, including the spousal claim of Tommie Rae Hynie and the will contest.
Judge Early ruled in January that Hynie was Brown’s spouse, a ruling Daryl Brown characterized as “fatally flawed because it ignored known facts …”
The determination of Brown’s marital status is important for Brown’s charity, which is funded by copyrights to over 850 songs and rights to his image because of the Federal Copyright Act.
Daryl Brown also disputed the judge’s claim related to the will contest: “Despite assertion to the contrary in the status report, the parties have not agreed to a discovery order nor has a consent scheduling order been circulated.”
In his May 13 filing, Daryl Brown said some parties had been ordered to a mediation they considered to be a “futile and wasted effort,” and that Judge Early failed to follow the dictates of the will, which required three trustees to be appointed.
Judge Early held “interviews” for the three trustee positions in the fall of 2013, but current trustee Russell Bauknight said he would refuse to serve if others were appointed. Judge Early then re-appointed Bauknight the sole trustee, in defiance of a Supreme Court directive to follow Brown’s will and trust documents.
Bauknight was originally appointed by former Attorney General Henry McMaster under a 2009 settlement deal that was overturned by the South Carolina Supreme Court in May 2013. The Court called the settlement a “dismemberment” of Brown’s estate plan, which left his music empire to the “I Feel Good” Trust, an education charity for needy students in South Carolina and Georgia.
Brown’s will and trust documents contained in terroreum clauses that said anyone who contests either document receives nothing. McMaster did not enforce the clauses, but instead he gave over half of what Brown left to charity to the will contestants.
Brown’s will was contested by five of six children named and his companion, Tommie Rae Hynie, who claimed to be his wife.
In February 2015 the Supreme Court halted all estate proceedings in Aiken and requested copies of all orders issued by Judge Early since May 2013, when the Court returned the case to Aiken. On April 20 the Supreme Court ordered Judge Early to update the Court on what has happened in Brown’s estate since the case was returned to him.
The status report from Judge Early did not address the salient question of what was the value of Brown’s estate when he died.
Current trustee Bauknight has filed documents with the IRS that claim the at-death valuation of Brown’s music empire was $4.7 million. All previous trustees set the value between $85 and $100 million.
The music empire includes rights to Brown’s image and the rights to over 850 songs. Only months before Brown died on Christmas Day 2006, in anticipation of a loan, the Royal Bank of Scotland secured a professional appraisal that valued Brown’s royalties at $42 million — without publicity rights to Brown’s image.
Bauknight and the AG have fought the release of the $4.7 million appraisal and supporting documents since 2011. In a FOIA lawsuit filed by this reporter, the AG claimed he never saw the appraisal and it was not in his possession. In 2011, however, the AG argued that the S.C. Supreme Court should accept the $4.7 million appraisal as the value of Brown’s music empire in Wilson v Dallas, the appeal in which the McMaster settlement was overturned.
Emails from 2011, released under the Freedom Of Information Act, reveal that much of the valuation “strategy” for the Brown estate was developed by attorneys for Brown’s companion, Tommie Rae Hynie Brown.
One week before the Supreme Court heard oral arguments in Wilson v. Dallas on Nov. 1, 2011, one email discussed why the trustees who appealed the settlement deal were not provided with the appraisal. “They have already demonstrated that they would sabotage the estate’s dealings with the IRS by sending in the ‘roadmap.’’”
Under the McMaster settlement deal, private parties received over half of the assets in Brown’s music empire. Under IRS regulations, no estate taxes are due on gifts to charity.
The trustees who appealed the settlement claimed that $50 million would be subject to estate taxes under the McMaster settlement, but Hynie Brown’s attorney wrote the IRS had accepted their claims: “the tax is zero, and we got the charitable and marital deductions.”
The at-death valuation is critically important in determining the number of students who can be helped by Brown’s charity. According to the website foundationsource.com, the Internal Revenue Service (IRS) requires a private foundation to make an annual minimum distribution of five percent from the foundation’s value for charitable purposes.
Whether that distribution is made from $85 million or $4.7 million would make a big difference in the number of students who could receive scholarships—perhaps, the difference between 8-10 students or over 150 a year.
In Judge Early’s status report to the Supreme Court, he wrote: “I am confident my management of the case has now put it in a posture for the final resolution of all issues…”
Daryl Brown said, however, “There are contested issues that need to be resolved by discovery…”
The recent actions of the Supreme Court in the Brown case were characterized by Daryl Brown’s attorney David Bell of Georgia as “unprecedented,” and it would be difficult to predict what now may happen from here and when.