Los Angeles- Michael Jackson borrowed $2 million from a finance company at 4%-per-month interest to make a charity record for victims of the Sept. 11, 2001, terrorist attacks, one of his lawyers acknowledged Tuesday during testimony in a business dispute between the pop star and a former associate.
The loan was one of several accounts of the pop superstar's unorthodox business practices that have surfaced as Jackson has been in court fighting claims that he owes F. Marc Schaffel, whom he hired to produce record and TV projects, $1.6 million. Closing arguments in the Santa Monica jury trial are expected today.
Thomas Mundell, who is representing Jackson, said outside the courtroom that his client obtained the loan at Schaffel's behest to finance production of the record "What More Can I Give."
"When you are close to Michael Jackson he will do anything for you," Mundell said. "He is amazingly trusting."
Jackson's lawyers have said the singer cut his business dealings with Schaffel when he learned the producer had once made pornographic films.
Another portrayal of Jackson's financial habits surfaced in a discussion of the days following the Sept. 11 attacks. Schaffel had said in a deposition that Jackson asked him to obtain $500,000 in cash in case Jackson decided he needed to "take his family underground."
But Jan Goren, an accountant retained by Jackson's lawyers, testified Tuesday that the $500,000 went into a money market account Schaffel controlled.
Schaffel's lawyer, Howard King, said outside the courtroom his client can "independently verify" his accounting.
But Mundell said Schaffel has "a pattern of claiming large cash loans to Mr. Jackson he never made."
Associated Press: A former lawyer for Michael Jackson testified Tuesday that he tried to persuade a Japanese company not to negotiate with a fired associate of the pop star for rights to a charity recording, but the company proceeded anyway with efforts to acquire the song and stage a concert tour.
Zia Modabber, testifying in a $1.6 million lawsuit against Jackson by former associate F. Marc Schaffel, said that when he learned of Schaffel's contacts with the company, Music Fighters, his first concern "was to find out who they were and whether they were legitimate people to negotiate with. I never got to the bottom of it."
He testified Monday that Schaffel at one point collected $900,000 from Music Fighters, but the company essentially received nothing.
Modabber was put on the stand by Jackson's attorney to support the pop star's position that Schaffel, who claims he's still owed royalties and other debts, enriched himself at Jackson's expense while producing "What More Can I Give," a song that was intended raise money for victims of the Sept. 11 terrorist attacks.
Modabber testified Monday that it was he who informed Jackson of Schaffel's past as a producer of gay pornography movies, leading to the man's firing in November 2001, and that he sought to untangle Schaffel's continuing efforts to profit from the recording after being terminated.
Plaintiff's attorney Howard King quizzed Modabber about his contacts with the Japanese company.
"You informed Music Fighters they had to negotiate with Jackson and whatever they were stupid enough to buy through negotiating with Schaffel it would be worthless?" King asked.
Modabber replied: "I believe I let them know that without Mr. Jackson what they were buying was worthless."
Modabber acknowledged Schaffel was never paid a fee for his role in producing the record but said Schaffel breached the contract with Jackson which called for Schaffel to pay production expenses.
He acknowledged that Schaffel owned the master recording. "He had to use it within the purpose of the agreement, which was for charity," the witness said.
He was adamant that Schaffel's contact with the project was terminated in November 2001.
