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ABC7 Court News @ABC7Courts 11h
We hope to see you tomorrow for full coverage. For latest watch @ABC7 and http://www.abc7.com . Have a great night everyone!
ABC7 Court News @ABC7Courts 11h
Judge adjourned session until tomorrow morning at 9:45 am PT. Ackerman is ordered to return then. He's expected to last all day on the stand
ABC7 Court News @ABC7Courts 11h
Panish told the judge this is a good point to stop. He says he needs to argue with the court. Judge responded: "And you can't wait!"
ABC7 Court News @ABC7Courts 11h
Panish: Did you read that MJ had 28.8 year life expectancy? Objection -- sustained
ABC7 Court News @ABC7Courts 11h
Panish: What was the standard life expectancy for Michael Jackson? Ackerman: I don't know.
ABC7 Court News @ABC7Courts 11h
Ackerman: He was providing the bulk of the support for his mother.
ABC7 Court News @ABC7Courts 11h
Panish: Do you agree with me that Mr. Jackson was paying for his mother's life necessities?
ABC7 Court News @ABC7Courts 11h
"Mr. Panish, I'm just trying to say that she was also being subsidized by his daughter," Ackerman explained.
ABC7 Court News @ABC7Courts 11h
Ackerman said Mrs. Jackson testified Janet was giving her $10,000 a month.
ABC7 Court News @ABC7Courts 11h
"I know that Janet Jackson was also providing, so you have to draw the line where life necessities is," Ackerman explained.
ABC7 Court News @ABC7Courts 11h
"It appears that he was providing support," Ackerman said.
ABC7 Court News @ABC7Courts 11h
Panish: $5 million would've covered the entire expense at Hayvenhurst in 2009, correct? Ackerman: Yes, sir.
ABC7 Court News @ABC7Courts 11h
"Some people were of that frame of mind," Ackerman answered.
ABC7 Court News @ABC7Courts 11h
Panish: Did you testify in your deposition that it was stated by a number of people that Dr. Tohme was incompetent and dishonest.
ABC7 Court News @ABC7Courts 11h
"I made aware that Dr. Tohme may had been holding some money for MJ," Ackerman responded.
ABC7 Court News @ABC7Courts 11h
Panish: Was Dr. Tohme sitting on $5 million of Michael Jackson's money in 2009?
ABC7 Court News @ABC7Courts 11h
Ackerman: Michael Jackson Company was created on Feb 8, 2007. It's a Delaware company.
ABC7 Court News @ABC7Courts 11h
Panish: Was it a single liability company? Ackerman: I don't recall, have to look up.
ABC7 Court News @ABC7Courts 11h
Panish: Who were the officers of Michael Jackson Company, sir? Ackerman: I know Michael Jackson was.
ABC7 Court News @ABC7Courts 11h
Ackerman said he, himself, did not read all the documents related to the case.
ABC7 Court News @ABC7Courts 11h
Ackerman: Looking at this graph, it's an average of somewhere between $30-$35 million.
ABC7 Court News @ABC7Courts 11h
Panish: And from 2008 versus 2009? Ackerman: I show the debt going up only a few hundred thousand dollars.
ABC7 Court News @ABC7Courts 11h
Panish: How much did MJ's debt increase from 2007 versus 2008? Ackerman: Approximately $1.5 million.
ABC7 Court News @ABC7Courts 11h
"I didn't come up with specific number, but probably in the $30-$50 million range," Ackerman testified.
ABC7 Court News @ABC7Courts 11h
Panish: You were very critical of Erk's consumption amount, right? Ackerman: I was very critical of it.
ABC7 Court News @ABC7Courts 11h
Ackerman estimated the bill for last month to be between $50,000-$100,000, which is on top of the $800,000-$825,000 already billed.
ABC7 Court News @ABC7Courts 11h
Panish: A professional way would be to itemize your bill, right? Ackerman: I don't know, I know what our company does.
ABC7 Court News @ABC7Courts 11h
Ackerman said he keeps time records for the he does. "I don't know what the industry standard is, I know what we do in our firm."
ABC7 Court News @ABC7Courts 11h
The bill of $800,000 to $825,000 was for work up until July. Since then, Ackerman worked another 60-100 hours.
ABC7 Court News @ABC7Courts 11h
Panish: Did your firm bill in excess of $1 million for that case? Ackerman: I don't know exactly, but I'd not be surprised.
ABC7 Court News @ABC7Courts 11h
OMM hired Ackerman in another case, the Cussler case. Bert Fields was the opposing counsel. Anschutz company was one of the defendants.
ABC7 Court News @ABC7Courts 11h
Ackerman said the general requirement is to have a written agreement before work begins.
ABC7 Court News @ABC7Courts 11h
Panish asked if he has a contract. He said yes. Attorney asked if he could bring a copy of it.
ABC7 Court News @ABC7Courts 11h
Brian Panish did cross examination. Ackerman said he has an engagement letter with AEG for work in this case.
ABC7 Court News @ABC7Courts 11h
Out of twitter jail.... here's the rest of Ackerman's testimony today.
ABC7 Court News @ABC7Courts 11h
"He would have to have some form of income to pay those figures," Ackerman testified. Strong concluded her examination.
ABC7 Court News @ABC7Courts 15h
For MJ, he calculated 15 and half years of life expectancy, although he didn't offer his opinion on how much MJ would live.
ABC7 Court News @ABC7Courts 15h
Ackerman said Mrs. Jackson's life expectancy was 10 years from 2009. So he stopped calculating future earnings based on that.
ABC7 Court News @ABC7Courts 15h
Period 11 - End 12/31/2019 -- for KJ and children -- $19,452,000 Period 16 - End 12/31/2024 -- for KJ and children -- $21,498,000
ABC7 Court News @ABC7Courts 15h
Projected Support to Plaintiffs (cumulative) Period 1 - End 12/31/2009 -- for KJ and children -- $1,684,000
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Katherine Jackson -- Projected Support From 2009 - 2019 Period 1 - Ending 12/31/2009 -- $557,000 Period 11 - Ending 6/30/2019 -- $6,111,000
ABC7 Court News @ABC7Courts 15h
Ackerman used a discount rate of 18% to put numbers in present value.
ABC7 Court News @ABC7Courts 15h
Ackerman said he gave $110,000 cushion in the last category to catch all that was possibly missed.
ABC7 Court News @ABC7Courts 15h
Groceries: $17,000 per year per child Other $121,000 per year per child for toys, gifts, clothes, electronics, books, jewelry, boats, places
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Ackerman said he projected kids to have own cars at 16. He testified he thinks the dream car would be a convertible BMW -- $35k/year/child
ABC7 Court News @ABC7Courts 15h
Auto: Ackerman said MJ had acquired 2 top of the line Escalades. $42,000 for MJ and 3 children, about $14,000 per child.
ABC7 Court News @ABC7Courts 15h
Security: $69,000 per child per year Caretaker: $22,000 per child per year
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Travel: $122,000 per child Ackerman said MJ would travel by private plane and would rent entire floors of hotels.
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2013 cost of private university -- $63,000 (Harvard). Ages 18-21. In 2009, it was $51,000. This included tuition and room and board.
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Education: Buckley School in 2013 is $36,000 for ages 12-17. In 2009 was $28,000.
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Chef (Kai Chase) -- $128,000 Utilities -- $64,000 Total Annual Cost -- $1,454,000 25% Allocation per child -- 364,000
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Rent -- $1,200,000 Butler -- $31,000 Housekeeper -- $31,000
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The difference is because Prince was going to Buckley School, which Ackerman said is higher than home schooling for Paris & Blanket in 2009.
ABC7 Court News @ABC7Courts 15h
Prince, Paris and Blanket Annual Support Around 2009: Prince -- $785,000 Paris -- $780,000 Blanket -- $780,000
ABC7 Court News @ABC7Courts 15h
Strong: What you see on the records, it decreased overtime? Ackerman: It appears that way.
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Ackerman said the books and records listed out the gifts MJ gave to Mrs. Jackson. In some years, there was no gift amount listed.
ABC7 Court News @ABC7Courts 15h
Travel -- $35,000/year (Family vacations for 2010 was $118,362 and 2011 was $160,471) Gifts -- $40,000/year
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Auto/RV MJ had given Mrs. Jackson a top of the line Mercedes and recreational vehicle -- $118,000/year
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Hayvenhurst security/alarms -- $69,000/year Food allowance -- $30,000/year (just for Mrs. Jackson)
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Hayvenhurst employees/independent contractors -- $252,000/year (groundkeeper, butler, housekeeper, personal assistant, driver, security man)
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Hayvenhurst repairs and maintenance -- $111,000/year Hayvenhurst homeowner insurance -- $36,000/year Hayvenhurst utilities -- $64,000/year
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Annual Support for Katherine Jackson alone: Hayvenhurst mortgage on March 2009 -- 31,513/month Hayvenhurst property taxes -- 34,000/year
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Annual Support for Katherine Jackson included all expenses for Hayvenhurst, Auto/RV,Travel, Gifts.
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Prince -- $785,000 Paris -- $780,000 Blanket -- $780,000
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Ackerman calculated Annual Support to Plaintiffs Around 2009: Katherine - $1,167,000
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"He was in a very precarious financial condition," Ackerman opined. "He dig himself in pretty good hole."
ABC7 Court News @ABC7Courts 15h
Ackerman said the mortgage at Hayvenhurst was delinquent 3-4 months and was scheduled to be foreclosed on June 26, 2009, a day after MJ died
ABC7 Court News @ABC7Courts 15h
Colony Capital came in and replaced primary lender -- non-interest bearing loan to MJ for $23 million.
ABC7 Court News @ABC7Courts 15h
"It has become very close to foreclosure by Colony Capital in 2008," Ackerman said about Neverland.
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Neverland: Ackerman said about $23 million had been lent against Neverland.
ABC7 Court News @ABC7Courts 15h
Bankruptcy remote trust was formed in March 2006. It was called "New Horizon Trust."
ABC7 Court News @ABC7Courts 15h
Ackerman said his understanding is that the trust would protect the catalogues against other borrowers.
ABC7 Court News @ABC7Courts 15h
A bankruptcy remote trust is established to protect the interest of the lender in case the borrower files for bankruptcy.
ABC7 Court News @ABC7Courts 15h
Ackerman said he believes lenders were getting nervous in 2006, formed bankruptcy remote trust that included Sony/ATV and MIJAC catalogues.
ABC7 Court News @ABC7Courts 15h
"It was earmarked to either pay the interest of the debts or the debts themselves," Ackerman said.
ABC7 Court News @ABC7Courts 15h
Ackerman: Mr. Jackson never got paid that money from royalties, it went straight to the lender.
ABC7 Court News @ABC7Courts 15h
Ackerman said that, based on his review of the documents, the royalties were dedicated to repay the debt.
ABC7 Court News @ABC7Courts 15h
Profile of Financial Condition: 5- Neverland 6- Hayvenhurst
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Profile of Financial Condition: 3- Catalog Cash Flow Committed to Servicing Debt 4- Bankruptcy Remote Trust Formed in 2006
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Strong showed another chart of MJ's Finances. Profile of Financial Condition: 1- Significant Debt 2- High Borrowing Rates
ABC7 Court News @ABC7Courts 15h
"The income goes away," Ackerman said.
ABC7 Court News @ABC7Courts 15h
Strong: I want you to assume, if MJ did not have the Sony/ATV catalogue, do you have an opinion if he would receive $6.5 to $11 million?
ABC7 Court News @ABC7Courts 15h
If not paid, Ackerman said he'd assume MJ would not receive the amount he was to receive annually for royalties.
ABC7 Court News @ABC7Courts 15h
Ackerman said the $300 million loan against the Sony/ATV catalogue was due in full in December of 2010.
ABC7 Court News @ABC7Courts 15h
Ackerman: Yes, ma'am. "I don't think he was able to borrow any more money," Ackerman said.
ABC7 Court News @ABC7Courts 15h
Strong: Assuming Briggs testified value of MJ's interest in the catalogue is roughly in line w/ debt, is that consistent he was tapped out?
ABC7 Court News @ABC7Courts 15h
The Hayvenhurst residence was 3-4 months in arrears by June 2009. Ackerman said he does not know the value of Sony/ATV catalogue.
ABC7 Court News @ABC7Courts 15h
Ackerman: He was having troubles to meet his obligations in the period of 2007-2009, as well as other periods.
ABC7 Court News @ABC7Courts 15h
"He was tapped out," the expert explained. He said his opinion is based on the documents he reviewed in the case.
ABC7 Court News @ABC7Courts 15h
Ackerman said after 2007 no debt had been incurred. "Nobody would lend him money," he said.
ABC7 Court News @ABC7Courts 15h
"After 2008, people were just not giving him more money," Ackerman said.
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The title of Hayvenhurst house was in Michael and LaToya's name, Ackerman said.
ABC7 Court News @ABC7Courts 15h
Loan Balance - $383,500 Total: $ 398,878,414 in asses securing debt.
ABC7 Court News @ABC7Courts 15h
Neverland Residence - $ 71,509,703 Hayvenhurst Residence - $ 23,000,000 Lindley Residence - $ 3,985,211
ABC7 Court News @ABC7Courts 15h
Strong showed chart with MJ's Assets Securing Debt in June 2009: 50% Interest in Sony/ATV Catalog MIJAC Catalog - $ 300,000,000
ABC7 Court News @ABC7Courts 15h
The expert said MJ created new companies for the "HIStory" tour and he analyzed the books, which showed he lost money.
ABC7 Court News @ABC7Courts 15h
Ackerman said the books and records shows MJ lost $11.2 million in the "HIStory" tour.
ABC7 Court News @ABC7Courts 15h
Ackerman said he believes Dangerous tour in 1993 broke even or lost money. He reviewed Gongaware's testimony with that info.
ABC7 Court News @ABC7Courts 15h
Strong asked what that means. "He liked to spend money," Ackerman responded.
ABC7 Court News @ABC7Courts 15h
Ackerman said MJ received in Oct 1995-97 -- received $150 million from Sony. But he spent $32 million in 1993, $140 million in 1998.
ABC7 Court News @ABC7Courts 15h
Ackerman said in 2007 it was $400 million, plateau there until his passing in 2009.
ABC7 Court News @ABC7Courts 15h
Strong showed chart with MJ's outstanding debt: 2001 -- $231 million 2005 -- $275 million 2006 -- $325 million
ABC7 Court News @ABC7Courts 15h
"It continued to grow over time to the final numbers," Ackerman said.
ABC7 Court News @ABC7Courts 16h
Ackerman said he saw on documents that MJ was as much as $30 million in debt as early as 1993.
ABC7 Court News @ABC7Courts 16h
Ackerman: He was close to about $400 million on long-term debt, had other debts to credit he received. Total debt is $400 and $500 million.
ABC7 Court News @ABC7Courts 16h
Ackerman said this amount was all separated from his monthly expenses.
ABC7 Court News @ABC7Courts 16h
"This is the cost to rent somebody else's money," Ackerman explained. He said the interest rate was 16,8%, almost 17%.
ABC7 Court News @ABC7Courts 16h
Ackerman said from 2001/2004 the annual interest on debt was from $13 to $15 million 2005: $20 million 2006: $25 million 2009: $30 million
ABC7 Court News @ABC7Courts 16h
Strong showed chart with MJ's Interest on Debt, which is the amount of incurred interest over the years.
ABC7 Court News @ABC7Courts 16h
Ackerman said Michael Jackson had to take on more and more debt to keep going, since income was not sufficient.
ABC7 Court News @ABC7Courts 16h
The expert said he had to take care of the animals at Neverland, had people on the payroll, spent half a million dollars in amusement rides.
ABC7 Court News @ABC7Courts 16h
Ackerman said MJ was a generous man and donated a lot money to charity. He also gave a lot of gifts to different people at different times.
ABC7 Court News @ABC7Courts 16h
Ackerman: All expenses of the different businesses he had, payroll, Neverland Ranch was very expensive to maintain.
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Strong: What things did you see MJ would spend? Ackerman: The large expenditures was in interest.
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Michael Jackson's Finances -- Expenses Erk: $6.8 million in consumption Ackerman said in 2008 it was $41/42 million in consumption
ABC7 Court News @ABC7Courts 16h
Ackerman said MJ was spending $15-20 million a year on average more than his income.
ABC7 Court News @ABC7Courts 16h
Ackerman said there were not a lot of books and records provided for the year 2007. MJ had some sort of dispute with his business manager.
ABC7 Court News @ABC7Courts 16h
The expert said those were the years MJ was living at Neverland Ranch. And no expenses were reported.
ABC7 Court News @ABC7Courts 16h
Ackerman said 2002, 2003 and 2004 there were no personal expenditures record. So they were not included in the graphic.
ABC7 Court News @ABC7Courts 16h
MJ's Finances in 2008: $26 million in income $42 million in expenses
ABC7 Court News @ABC7Courts 16h
Strong showed a chart of MJ's Finances -- Spending Exceeded Income 2001: $17 million in income $33/34 million in expenses
ABC7 Court News @ABC7Courts 16h
Michael Jackson Company is the corporation that entered into an agreement with AEG.
ABC7 Court News @ABC7Courts 16h
Ackerman testified that some times the spending on a given company would be bigger than the income, would have a loss.
ABC7 Court News @ABC7Courts 16h
Ackerman said MJ had multiple corporations. He said most of his expenses were from one of his entities and not by himself as a person.
ABC7 Court News @ABC7Courts 16h
Ackerman said MJ paid $49,5 million dollars for the ATV catalogue, which then was merged with Sony.
ABC7 Court News @ABC7Courts 16h
Ackerman: MJ had ATV catalogue alone and received $115 million over a three year period of time for the merge with Sony's catalogue in 1995.
ABC7 Court News @ABC7Courts 16h
The expert said MJ was to continue to receive $6.5 million every year for royalties and $11 million from 2008 and forward until 2014.
ABC7 Court News @ABC7Courts 16h
Ackerman said the Sony/ATV catalogue merged in 1995. As part of deal, MJ received a substantial amount of money.
ABC7 Court News @ABC7Courts 16h
Ackerman: During the last decade of his life the primary source of income was Sony/ATV catalogue and his own MIJAC catalogue.
ABC7 Court News @ABC7Courts 16h
He said he focused on 2001 to June 2009 period, since the financial information was the most complete during this period.
ABC7 Court News @ABC7Courts 16h
Ackerman said he put together a profile of Michael Jackson's financial condition.
ABC7 Court News @ABC7Courts 16h
"He had significant debt over time, the interest had become more and more burdensome to meet," Ackerman described.
ABC7 Court News @ABC7Courts 16h
"MJ's spending exceeded his income on an annual basis," Ackerman testified.
ABC7 Court News @ABC7Courts 16h
Exhibit: A. Spending Exceeded Income B. Growing and Significant Debt C. Profile of Financial Condition
ABC7 Court News @ABC7Courts 16h
Ackerman: I think it's important to share with jury that there was some doubt of his ability to continue to provide support.
ABC7 Court News @ABC7Courts 16h
Ackerman said he looked at books and records for Michael Jackson and was asked to measure what MJ paid to plaintiffs for support.
ABC7 Court News @ABC7Courts 16h
"We submitted invoices in excess of $800,000" Ackerman testified. He said he doesn't know how it's possible to opine without reading all.
ABC7 Court News @ABC7Courts 16h
Ackerman's hourly rate is $475. Other people in his firm charge between $325 to $75 an hour.
ABC7 Court News @ABC7Courts 16h
Ackerman said it probably took well over 2000 hours just to read all the documents. He spent between 650 and 700 hours alone.
ABC7 Court News @ABC7Courts 16h
Ackerman said he reviewed all docs, didn't amount to millions of dollars. He testified his firm spent between 2800 - 3000 hours on this case
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Erk's testimony: Otherwise we'd spend millions of dollars and I didn't think this was necessary.
ABC7 Court News @ABC7Courts 16h
Erk responded he had access to them but decided to read only what he thought was pertinent.
ABC7 Court News @ABC7Courts 16h
Strong showed Ackerman a question that was posed to Arthur Erk. He was asked if he reviewed thousand of documents in this case.
ABC7 Court News @ABC7Courts 16h
Ackerman said he/his firm reviewed over 200,000 pages of documents. About 10 people in his office worked in reviewing these documents.
ABC7 Court News @ABC7Courts 16h
Ackerman explained he developed what we would describe as a financial profile of Michael Jackson.
ABC7 Court News @ABC7Courts 16h
Scope of Work - Michael Jackson's finances - Support, contributions, gifts and benefits - Present value calculation
ABC7 Court News @ABC7Courts 16h
Ackerman said he was asked to try to determine the amount of support plaintiffs would received/could expect to receive had MJ lived.
ABC7 Court News @ABC7Courts 16h
He has also worked on a handful wrongful death matters. Ackerman said he probably worked on 1,000 matters where he looked at damages issues.
ABC7 Court News @ABC7Courts 16h
"I don't choose my clients, they choose me" Ackerman said. The witness has testified on behalf of O'Melveny & Myers about a handful of times
ABC7 Court News @ABC7Courts 16h
Ackerman testified in a little over 60 cases, all as expert witness. He said the split is half between being hired by plaintiffs/defendants.
ABC7 Court News @ABC7Courts 16h
Ackerman studied Business Administration with emphasis in Accounting at Georgetown University.
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He's works in all kinds of civil litigation and some criminal matters. The only litigation his firm does not do is marital dissolution.
ABC7 Court News @ABC7Courts 16h
Ackerman said his work is primary is the damage areas, says he works on several cases and they are all different.
ABC7 Court News @ABC7Courts 16h
He's been working in the accounting firm for a little over 22 years.
ABC7 Court News @ABC7Courts 16h
Ackerman works currently at Freeman & Mills, consulting in accounting, finance, economics, business practices, primarily business settings.
ABC7 Court News @ABC7Courts 16h
He said he did an extensive review of the financial information provided to him, did a financial evaluation of MJ.
ABC7 Court News @ABC7Courts 16h
Ackerman was asked to determine the amount of support the plaintiffs received and could expect to receive had MJ lived.
ABC7 Court News @ABC7Courts 16h
Sabrina Strong did direct examination of Ackerman. She asked how tall he is. The expert said he's 6'7".
ABC7 Court News @ABC7Courts 16h
AEG called a new witness on the stand, William Ackerman. Before seating down, Ackerman laid out several large binders from 2 boxes.
ABC7 Court News @ABC7Courts 16h
Prior to beginning of session, attorneys discussed with judge about the next witnesses/exhibits outside the presence of the jury.
ABC7 Court News @ABC7Courts 16h
Katherine Jackson is back in the courtroom today. She's wearing a long white pique jacket and sporting silver hoop earrings.
ABC7 Court News @ABC7Courts 16h
Hello from the courtouse in downtown LA.Day 67 of Jackson family vs AEG trial, Week 16, has just concluded.
ABC7 Court News @ABC7Courts 11h
We hope to see you tomorrow for full coverage. For latest watch @ABC7 and http://www.abc7.com . Have a great night everyone!
ABC7 Court News @ABC7Courts 11h
Judge adjourned session until tomorrow morning at 9:45 am PT. Ackerman is ordered to return then. He's expected to last all day on the stand
ABC7 Court News @ABC7Courts 11h
Panish told the judge this is a good point to stop. He says he needs to argue with the court. Judge responded: "And you can't wait!"
ABC7 Court News @ABC7Courts 11h
Panish: Did you read that MJ had 28.8 year life expectancy? Objection -- sustained
ABC7 Court News @ABC7Courts 11h
Panish: What was the standard life expectancy for Michael Jackson? Ackerman: I don't know.
ABC7 Court News @ABC7Courts 11h
Ackerman: He was providing the bulk of the support for his mother.
ABC7 Court News @ABC7Courts 11h
Panish: Do you agree with me that Mr. Jackson was paying for his mother's life necessities?
ABC7 Court News @ABC7Courts 11h
"Mr. Panish, I'm just trying to say that she was also being subsidized by his daughter," Ackerman explained.
ABC7 Court News @ABC7Courts 11h
Ackerman said Mrs. Jackson testified Janet was giving her $10,000 a month.
ABC7 Court News @ABC7Courts 11h
"I know that Janet Jackson was also providing, so you have to draw the line where life necessities is," Ackerman explained.
ABC7 Court News @ABC7Courts 11h
"It appears that he was providing support," Ackerman said.
ABC7 Court News @ABC7Courts 11h
Panish: $5 million would've covered the entire expense at Hayvenhurst in 2009, correct? Ackerman: Yes, sir.
ABC7 Court News @ABC7Courts 11h
"Some people were of that frame of mind," Ackerman answered.
ABC7 Court News @ABC7Courts 11h
Panish: Did you testify in your deposition that it was stated by a number of people that Dr. Tohme was incompetent and dishonest.
ABC7 Court News @ABC7Courts 11h
"I made aware that Dr. Tohme may had been holding some money for MJ," Ackerman responded.
ABC7 Court News @ABC7Courts 11h
Panish: Was Dr. Tohme sitting on $5 million of Michael Jackson's money in 2009?
ABC7 Court News @ABC7Courts 11h
Ackerman: Michael Jackson Company was created on Feb 8, 2007. It's a Delaware company.
ABC7 Court News @ABC7Courts 11h
Panish: Was it a single liability company? Ackerman: I don't recall, have to look up.
ABC7 Court News @ABC7Courts 11h
Panish: Who were the officers of Michael Jackson Company, sir? Ackerman: I know Michael Jackson was.
ABC7 Court News @ABC7Courts 11h
Ackerman said he, himself, did not read all the documents related to the case.
ABC7 Court News @ABC7Courts 11h
Ackerman: Looking at this graph, it's an average of somewhere between $30-$35 million.
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Panish: And from 2008 versus 2009? Ackerman: I show the debt going up only a few hundred thousand dollars.
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Panish: How much did MJ's debt increase from 2007 versus 2008? Ackerman: Approximately $1.5 million.
ABC7 Court News @ABC7Courts 11h
"I didn't come up with specific number, but probably in the $30-$50 million range," Ackerman testified.
ABC7 Court News @ABC7Courts 11h
Panish: You were very critical of Erk's consumption amount, right? Ackerman: I was very critical of it.
ABC7 Court News @ABC7Courts 11h
Ackerman estimated the bill for last month to be between $50,000-$100,000, which is on top of the $800,000-$825,000 already billed.
ABC7 Court News @ABC7Courts 11h
Panish: A professional way would be to itemize your bill, right? Ackerman: I don't know, I know what our company does.
ABC7 Court News @ABC7Courts 11h
Ackerman said he keeps time records for the he does. "I don't know what the industry standard is, I know what we do in our firm."
ABC7 Court News @ABC7Courts 11h
The bill of $800,000 to $825,000 was for work up until July. Since then, Ackerman worked another 60-100 hours.
ABC7 Court News @ABC7Courts 11h
Panish: Did your firm bill in excess of $1 million for that case? Ackerman: I don't know exactly, but I'd not be surprised.
ABC7 Court News @ABC7Courts 11h
OMM hired Ackerman in another case, the Cussler case. Bert Fields was the opposing counsel. Anschutz company was one of the defendants.
ABC7 Court News @ABC7Courts 11h
Ackerman said the general requirement is to have a written agreement before work begins.
ABC7 Court News @ABC7Courts 11h
Panish asked if he has a contract. He said yes. Attorney asked if he could bring a copy of it.
ABC7 Court News @ABC7Courts 11h
Brian Panish did cross examination. Ackerman said he has an engagement letter with AEG for work in this case.
ABC7 Court News @ABC7Courts 11h
Out of twitter jail.... here's the rest of Ackerman's testimony today.
ABC7 Court News @ABC7Courts 11h
"He would have to have some form of income to pay those figures," Ackerman testified. Strong concluded her examination.
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For MJ, he calculated 15 and half years of life expectancy, although he didn't offer his opinion on how much MJ would live.
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Ackerman said Mrs. Jackson's life expectancy was 10 years from 2009. So he stopped calculating future earnings based on that.
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Period 11 - End 12/31/2019 -- for KJ and children -- $19,452,000 Period 16 - End 12/31/2024 -- for KJ and children -- $21,498,000
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Projected Support to Plaintiffs (cumulative) Period 1 - End 12/31/2009 -- for KJ and children -- $1,684,000
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Katherine Jackson -- Projected Support From 2009 - 2019 Period 1 - Ending 12/31/2009 -- $557,000 Period 11 - Ending 6/30/2019 -- $6,111,000
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Ackerman used a discount rate of 18% to put numbers in present value.
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Ackerman said he gave $110,000 cushion in the last category to catch all that was possibly missed.
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Groceries: $17,000 per year per child Other $121,000 per year per child for toys, gifts, clothes, electronics, books, jewelry, boats, places
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Ackerman said he projected kids to have own cars at 16. He testified he thinks the dream car would be a convertible BMW -- $35k/year/child
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Auto: Ackerman said MJ had acquired 2 top of the line Escalades. $42,000 for MJ and 3 children, about $14,000 per child.
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Security: $69,000 per child per year Caretaker: $22,000 per child per year
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Travel: $122,000 per child Ackerman said MJ would travel by private plane and would rent entire floors of hotels.
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2013 cost of private university -- $63,000 (Harvard). Ages 18-21. In 2009, it was $51,000. This included tuition and room and board.
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Education: Buckley School in 2013 is $36,000 for ages 12-17. In 2009 was $28,000.
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Chef (Kai Chase) -- $128,000 Utilities -- $64,000 Total Annual Cost -- $1,454,000 25% Allocation per child -- 364,000
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Rent -- $1,200,000 Butler -- $31,000 Housekeeper -- $31,000
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The difference is because Prince was going to Buckley School, which Ackerman said is higher than home schooling for Paris & Blanket in 2009.
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Prince, Paris and Blanket Annual Support Around 2009: Prince -- $785,000 Paris -- $780,000 Blanket -- $780,000
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Strong: What you see on the records, it decreased overtime? Ackerman: It appears that way.
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Ackerman said the books and records listed out the gifts MJ gave to Mrs. Jackson. In some years, there was no gift amount listed.
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Travel -- $35,000/year (Family vacations for 2010 was $118,362 and 2011 was $160,471) Gifts -- $40,000/year
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Auto/RV MJ had given Mrs. Jackson a top of the line Mercedes and recreational vehicle -- $118,000/year
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Hayvenhurst security/alarms -- $69,000/year Food allowance -- $30,000/year (just for Mrs. Jackson)
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Hayvenhurst employees/independent contractors -- $252,000/year (groundkeeper, butler, housekeeper, personal assistant, driver, security man)
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Hayvenhurst repairs and maintenance -- $111,000/year Hayvenhurst homeowner insurance -- $36,000/year Hayvenhurst utilities -- $64,000/year
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Annual Support for Katherine Jackson alone: Hayvenhurst mortgage on March 2009 -- 31,513/month Hayvenhurst property taxes -- 34,000/year
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Annual Support for Katherine Jackson included all expenses for Hayvenhurst, Auto/RV,Travel, Gifts.
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Prince -- $785,000 Paris -- $780,000 Blanket -- $780,000
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Ackerman calculated Annual Support to Plaintiffs Around 2009: Katherine - $1,167,000
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"He was in a very precarious financial condition," Ackerman opined. "He dig himself in pretty good hole."
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Ackerman said the mortgage at Hayvenhurst was delinquent 3-4 months and was scheduled to be foreclosed on June 26, 2009, a day after MJ died
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Colony Capital came in and replaced primary lender -- non-interest bearing loan to MJ for $23 million.
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"It has become very close to foreclosure by Colony Capital in 2008," Ackerman said about Neverland.
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Neverland: Ackerman said about $23 million had been lent against Neverland.
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Bankruptcy remote trust was formed in March 2006. It was called "New Horizon Trust."
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Ackerman said his understanding is that the trust would protect the catalogues against other borrowers.
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A bankruptcy remote trust is established to protect the interest of the lender in case the borrower files for bankruptcy.
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Ackerman said he believes lenders were getting nervous in 2006, formed bankruptcy remote trust that included Sony/ATV and MIJAC catalogues.
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"It was earmarked to either pay the interest of the debts or the debts themselves," Ackerman said.
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Ackerman: Mr. Jackson never got paid that money from royalties, it went straight to the lender.
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Ackerman said that, based on his review of the documents, the royalties were dedicated to repay the debt.
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Profile of Financial Condition: 5- Neverland 6- Hayvenhurst
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Profile of Financial Condition: 3- Catalog Cash Flow Committed to Servicing Debt 4- Bankruptcy Remote Trust Formed in 2006
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Strong showed another chart of MJ's Finances. Profile of Financial Condition: 1- Significant Debt 2- High Borrowing Rates
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"The income goes away," Ackerman said.
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Strong: I want you to assume, if MJ did not have the Sony/ATV catalogue, do you have an opinion if he would receive $6.5 to $11 million?
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If not paid, Ackerman said he'd assume MJ would not receive the amount he was to receive annually for royalties.
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Ackerman said the $300 million loan against the Sony/ATV catalogue was due in full in December of 2010.
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Ackerman: Yes, ma'am. "I don't think he was able to borrow any more money," Ackerman said.
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Strong: Assuming Briggs testified value of MJ's interest in the catalogue is roughly in line w/ debt, is that consistent he was tapped out?
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The Hayvenhurst residence was 3-4 months in arrears by June 2009. Ackerman said he does not know the value of Sony/ATV catalogue.
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Ackerman: He was having troubles to meet his obligations in the period of 2007-2009, as well as other periods.
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"He was tapped out," the expert explained. He said his opinion is based on the documents he reviewed in the case.
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Ackerman said after 2007 no debt had been incurred. "Nobody would lend him money," he said.
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"After 2008, people were just not giving him more money," Ackerman said.
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The title of Hayvenhurst house was in Michael and LaToya's name, Ackerman said.
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Loan Balance - $383,500 Total: $ 398,878,414 in asses securing debt.
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Neverland Residence - $ 71,509,703 Hayvenhurst Residence - $ 23,000,000 Lindley Residence - $ 3,985,211
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Strong showed chart with MJ's Assets Securing Debt in June 2009: 50% Interest in Sony/ATV Catalog MIJAC Catalog - $ 300,000,000
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The expert said MJ created new companies for the "HIStory" tour and he analyzed the books, which showed he lost money.
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Ackerman said the books and records shows MJ lost $11.2 million in the "HIStory" tour.
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Ackerman said he believes Dangerous tour in 1993 broke even or lost money. He reviewed Gongaware's testimony with that info.
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Strong asked what that means. "He liked to spend money," Ackerman responded.
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Ackerman said MJ received in Oct 1995-97 -- received $150 million from Sony. But he spent $32 million in 1993, $140 million in 1998.
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Ackerman said in 2007 it was $400 million, plateau there until his passing in 2009.
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Strong showed chart with MJ's outstanding debt: 2001 -- $231 million 2005 -- $275 million 2006 -- $325 million
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"It continued to grow over time to the final numbers," Ackerman said.
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Ackerman said he saw on documents that MJ was as much as $30 million in debt as early as 1993.
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Ackerman: He was close to about $400 million on long-term debt, had other debts to credit he received. Total debt is $400 and $500 million.
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Ackerman said this amount was all separated from his monthly expenses.
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"This is the cost to rent somebody else's money," Ackerman explained. He said the interest rate was 16,8%, almost 17%.
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Ackerman said from 2001/2004 the annual interest on debt was from $13 to $15 million 2005: $20 million 2006: $25 million 2009: $30 million
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Strong showed chart with MJ's Interest on Debt, which is the amount of incurred interest over the years.
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Ackerman said Michael Jackson had to take on more and more debt to keep going, since income was not sufficient.
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The expert said he had to take care of the animals at Neverland, had people on the payroll, spent half a million dollars in amusement rides.
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Ackerman said MJ was a generous man and donated a lot money to charity. He also gave a lot of gifts to different people at different times.
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Ackerman: All expenses of the different businesses he had, payroll, Neverland Ranch was very expensive to maintain.
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Strong: What things did you see MJ would spend? Ackerman: The large expenditures was in interest.
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Michael Jackson's Finances -- Expenses Erk: $6.8 million in consumption Ackerman said in 2008 it was $41/42 million in consumption
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Ackerman said MJ was spending $15-20 million a year on average more than his income.
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Ackerman said there were not a lot of books and records provided for the year 2007. MJ had some sort of dispute with his business manager.
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The expert said those were the years MJ was living at Neverland Ranch. And no expenses were reported.
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Ackerman said 2002, 2003 and 2004 there were no personal expenditures record. So they were not included in the graphic.
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MJ's Finances in 2008: $26 million in income $42 million in expenses
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Strong showed a chart of MJ's Finances -- Spending Exceeded Income 2001: $17 million in income $33/34 million in expenses
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Michael Jackson Company is the corporation that entered into an agreement with AEG.
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Ackerman testified that some times the spending on a given company would be bigger than the income, would have a loss.
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Ackerman said MJ had multiple corporations. He said most of his expenses were from one of his entities and not by himself as a person.
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Ackerman said MJ paid $49,5 million dollars for the ATV catalogue, which then was merged with Sony.
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Ackerman: MJ had ATV catalogue alone and received $115 million over a three year period of time for the merge with Sony's catalogue in 1995.
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The expert said MJ was to continue to receive $6.5 million every year for royalties and $11 million from 2008 and forward until 2014.
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Ackerman said the Sony/ATV catalogue merged in 1995. As part of deal, MJ received a substantial amount of money.
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Ackerman: During the last decade of his life the primary source of income was Sony/ATV catalogue and his own MIJAC catalogue.
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He said he focused on 2001 to June 2009 period, since the financial information was the most complete during this period.
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Ackerman said he put together a profile of Michael Jackson's financial condition.
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"He had significant debt over time, the interest had become more and more burdensome to meet," Ackerman described.
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"MJ's spending exceeded his income on an annual basis," Ackerman testified.
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Exhibit: A. Spending Exceeded Income B. Growing and Significant Debt C. Profile of Financial Condition
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Ackerman: I think it's important to share with jury that there was some doubt of his ability to continue to provide support.
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Ackerman said he looked at books and records for Michael Jackson and was asked to measure what MJ paid to plaintiffs for support.
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"We submitted invoices in excess of $800,000" Ackerman testified. He said he doesn't know how it's possible to opine without reading all.
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Ackerman's hourly rate is $475. Other people in his firm charge between $325 to $75 an hour.
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Ackerman said it probably took well over 2000 hours just to read all the documents. He spent between 650 and 700 hours alone.
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Ackerman said he reviewed all docs, didn't amount to millions of dollars. He testified his firm spent between 2800 - 3000 hours on this case
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Erk's testimony: Otherwise we'd spend millions of dollars and I didn't think this was necessary.
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Erk responded he had access to them but decided to read only what he thought was pertinent.
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Strong showed Ackerman a question that was posed to Arthur Erk. He was asked if he reviewed thousand of documents in this case.
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Ackerman said he/his firm reviewed over 200,000 pages of documents. About 10 people in his office worked in reviewing these documents.
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Ackerman explained he developed what we would describe as a financial profile of Michael Jackson.
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Scope of Work - Michael Jackson's finances - Support, contributions, gifts and benefits - Present value calculation
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Ackerman said he was asked to try to determine the amount of support plaintiffs would received/could expect to receive had MJ lived.
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He has also worked on a handful wrongful death matters. Ackerman said he probably worked on 1,000 matters where he looked at damages issues.
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"I don't choose my clients, they choose me" Ackerman said. The witness has testified on behalf of O'Melveny & Myers about a handful of times
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Ackerman testified in a little over 60 cases, all as expert witness. He said the split is half between being hired by plaintiffs/defendants.
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Ackerman studied Business Administration with emphasis in Accounting at Georgetown University.
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He's works in all kinds of civil litigation and some criminal matters. The only litigation his firm does not do is marital dissolution.
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Ackerman said his work is primary is the damage areas, says he works on several cases and they are all different.
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He's been working in the accounting firm for a little over 22 years.
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Ackerman works currently at Freeman & Mills, consulting in accounting, finance, economics, business practices, primarily business settings.
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He said he did an extensive review of the financial information provided to him, did a financial evaluation of MJ.
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Ackerman was asked to determine the amount of support the plaintiffs received and could expect to receive had MJ lived.
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Sabrina Strong did direct examination of Ackerman. She asked how tall he is. The expert said he's 6'7".
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AEG called a new witness on the stand, William Ackerman. Before seating down, Ackerman laid out several large binders from 2 boxes.
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Prior to beginning of session, attorneys discussed with judge about the next witnesses/exhibits outside the presence of the jury.
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Katherine Jackson is back in the courtroom today. She's wearing a long white pique jacket and sporting silver hoop earrings.
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Hello from the courtouse in downtown LA.Day 67 of Jackson family vs AEG trial, Week 16, has just concluded.