The S.C. Supreme Court has rejected a settlement deal forged by former Attorney General Henry McMaster in the estate of music legend James Brown, calling the deal “unjust and unreasonable” and “overreaching.”
In the opinion issued Feb. 27, Justice Donald W. Beatty, writing for the majority, said the McMaster deal ignored Brown’s “painstakingly developed” estate plan, which left the bulk of his fortune to the “I Feel Good” Trust, an education charity for disadvantaged youth in South Carolina and Georgia.
Instead, McMaster took over half of Brown’s assets away from the charity, gave them to those who had contested the will — and then “hijacked” the estate by giving himself the right to appoint its sole trustee, who serves at the AG’s pleasure.
“(T)he compromise condoned by the AG here results in an outright gift of half of the estate to the family members and purported family members who challenged Brown’s will and trust based on tenuous claims,” the Court said.
The will and trust were contested in 2007 by five of the six children named in Brown’s will and by companion Tomi Rae Hynie, who claimed she was Brown’s wife even though she was married to another man when the two exchanged vows in 2001.
“In sum, the Court has rightly decided that the AG simply does not possess the sweeping and unprecedented authority he assumed in this case,” according to the opinion.
Brown’s estate plan anticipated challenges. Both his will and trust state that anyone who contests either document receives nothing. He also directed his fiduciaries to defend all challenges as an affront to his wishes.
In accordance with these instructions, the second set of trustees — Adele Pope of Newberry and Robert Buchanan of Aiken — opposed the McMaster settlement deal and appealed its approval by Circuit Court Judge Doyett Early of Aiken.
The original trustees of Brown’s estate — Albert “Buddy” Dallas, Judge Bradley, and David Cannon — resigned under suspicions related to missing money. Cannon later entered an Alford plea for millions that were missing from the estate.
The original trustees were replaced by Pope and Buchanan, who were appointed by Judge Early and given the same authority as if appointed by Brown. Arguments in their appeal were heard before the Supreme Court on Nov. 1, 2011.
The Court affirmed the validity of the Buchanan/Pope appeal with strong criticism of the McMaster deal but then directed that another “neutral” trustee be appointed when the case is returned to the Aiken Circuit Court for further hearings. The reason given was that there had been conflicts between Buchanan/Pope and the “settling parties,” who stood to gain from the McMaster deal and were opposed to the appeal.
However, Chief Justice Jean Toal stated: “I would further find that the circuit court erred in removing Appellants (Buchanan/Pope) as fiduciaries of the estate based on the recommendation of the settling parties.”
Toal also affirmed that writing a will and directing how one’s property will be distributed is a fundamental right in our society, and any settlement agreement must defer to the wishes of the deceased. Otherwise, private philanthropy in the state is jeopardized.
The Feb. 27 opinion does not resolve all lawsuits associated with the Brown estate.
After Buchanan/Pope filed their appeal, the settling parties sued, alleging the former trustees had caused tens of millions in damages to Brown’s estate during the 18 months they served as trustees. Buchanan/Pope filed a counterclaim, alleging that McMaster and the settling parties had caused millions of dollars in damages to Brown’s education charity.
That suit is still pending, as are two Freedom of Information Act lawsuits filed by Pope. In the suits she requested copies of the contract with Columbia attorney Kenneth Wingate under which the AG joined with private parties to sue her and Buchanan; a copy of the Legacy Trust, which was created by former AG McMaster in the settlement deal; documents related to the at-death valuation of Brown’s music empire; and the diary of Tomi Rae Hynie, in which sources claim Hynie wrote about pleading with Brown to marry her.
Gag orders related to the diary are the subject of a pending appeal in the Supreme Court. Without holding a hearing, Judge Early issued the gag orders in 2008, and in 2012 he refused to lift the orders. That decision has been appealed by Pope.
The documents related to the at-death valuation of Brown’s music empire are also discussed in footnote 29 of the Feb. 27 opinion in which the Court admonishes the Circuit Court to hear the FOIA lawsuits “at the first instance.”
From Brown’s death in 2006 until 2011, family members and others estimated the value of Brown’s music empire from $80 to $120 million. In 2011, however, current trustee Russell Bauknight filed with the Court documents he had presented to the IRS.
In the documents, Bauknight asserted Brown’s worldwide music empire was worth less than $4.7 million at his death on Christmas Day 2006. When Bauknight’s counsel David Black was asked to provide the valuation documents, as required by the S.C. Probate Code, he said those documents were under “lock and key.”
The music assets and rights to Brown’s image earned $10 million in 2011, but Bauknight has not provided an accounting for earnings in 2012.
While the settlement was the work of former AG McMaster, the settlement and FOIA lawsuits have been defended by current Attorney General Alan Wilson, who issued the following statement: “While we believe the position taken before the Supreme Court by the Attorney General’s Office was legally correct, we respect the Court’s decision.”
He made no comment about whether he would respect the Court’s opinion by releasing the documents requested under the FOIA.