Published March 13, 2008
Michael Jackson’s Neverland Ranch may temporarily be out of financial peril on Wednesday. But there’s been a mini-financial soap opera running in the background, one which Michael probably knows nothing about, and it’s a doozy.
Sources tell me that for the last several months, Jackson’s former manager and press person Raymone Bain has been spearheading a drive to refinance Neverland without actually bothering to tell Jackson or his legal representatives.
Indeed, she and a group of financial advisers she organized may have been doing it long after Jackson dismissed her as his manager.
The result is that a rock-solid investment group in Los Angeles has been taught the lesson that no good deed goes unpunished.
According to the story, a Los Angeles investor named Jason Cestaro was located by a financial group called Genesis Group, run by Kevin Kinsey. Kinsey, I am told, sent Cestaro letters identifying himself as lead adviser to MJJ Neverland Ranch Finance Restruct Project. Kinsey, this source says, told Cestaro that he was brought on board by Bain, Jackson’s then-manager.
In correspondence and in conference calls with Kinsey and Cestaro, Bain represented herself and her PR assistant Aidean King as a firm called North Star.
Based on the letters, e-mails and calls that then began, Cestaro and wealthy East Coast investors planned for the refinancing of Neverland.
By last month, based on back-and-forth e-mails and telephone conversations, Cestaro — acting on good faith — placed $46 million in escrow with the goal of refinancing the Neverland lien held by Fortress Investments in New York and getting Jackson out of trouble.
But then things started to sound strange to Cestaro, sources tell me. The escrow company received a notice from Genesis indicating that $4.6 million of the Cestaro money would go to it once escrow on the property closed.
At that point, sources say, Cestaro began asking to speak with Jackson directly. When that didn’t happen, Cestaro’s suspicions — which already had been brewing — blossomed. He demanded an answer. I’m told that at that point a rep for Bain contacted Cestaro saying, suddenly, the deal was off.
Simultaneously: In New York and other parts of Los Angeles, Jackson’s legal representatives knew nothing about these transactions. They had no idea that such a large amount of money was in escrow or that Cestaro and his investor existed.
What they did know was that Neverland was in danger of being auctioned off in public on March 19 on the steps of the Santa Barbara County Courthouse.
Similarly, unbeknownst to Cestaro, Fortress was agreeing, albeit reluctantly, to renegotiate Jackson’s Neverland loan, charge him a hefty fee and extend the default arrangement for one year. The plan was for Fortress to avoid the public embarrassment of evicting Jackson from his home, and in broad daylight.
Ironically, while both sides proceeded, it’s more than likely Jackson also knew nothing of the $46 million placed in escrow for him, or anything of the Cestaro deal.
Wednesday morning, sources tell me, Jackson’s people feel they may have a deal in place with Fortress. At the same time, Cestaro — who did not return calls — is left holding a $46 million bag. He and his investor will get their money back, but not the time, aggravation or fees from dealing with Bain’s people.
Still, a major question lingers: the request for the $4.6 million from Genesis. I’m told Cestaro was informed that was for fees for Kinsey, Bain, King and even possibly Michael’s brother, Randy, who was mentioned as being part of the deal to refinance Neverland.
"They were supposedly people who expected to be paid something for putting the financing into motion," a source says.
More to come on this issue…
So is Neverland saved? It’s still a bit foggy. But there is some good news on the horizon. The "Thriller 25" album has sold better than anyone imagined. A month later, the revamped package is holding its own in the top 10. Last week, "Thriller 25" was one of the few CDs that actually increased its sales, by 20 percent. It sold almost 50,000 copies. In this economy, with the record biz dead, that’s quite an accomplishment.
At a total 300,000-plus, "Thriller 25" is heading for gold certification with the RIAA. That would be quite an accomplishment for a CD that’s been reissued several times. It also might be a sign of how bad things are in the marketplace. Good music is being drunk like water in the desert!
Get ready. Kathie Lee Gifford is coming back.
You’ve probably heard the rumblings that Gifford is in talks to host the 10 a.m. hour of the "Today" show.
But I can tell you it’s a done deal, and it will be happening sooner rather than later.
According to my sources, we can expect to see Kathie Lee in the anchor seat sometime before May sweeps begin, maybe as soon as April 1.
Kathie Lee would be replacing the capable Hoda Kotb, who really tried to make very little seem like a lot as she poured through recipes and designs.
But Kotb is a news person, as one "Today" source pointed out to me, and seemed a little uncomfortable making the switch to lighter fare.
Kathie Lee, on the other hand, is a natural comedienne who can switch from crafts to celebrities without blinking an eye. In the New York market, Kathie Lee will pose the most threat, I would think, to Rachael Ray at 10 a.m., and to what’s left of CBS’ decimated soap "Guiding Light," which now looks like a reality show gone bad since it forsook its studios for location shoots.
The weird thing might be: If Gifford’s successful, she could also be used in the 9 a.m. hour of "Today" on slow news days. Then she’d be on opposite former cohort Regis Philbin. But that’s not likely to happen. And Regis’ show is notable for destroying everything in its path, anyway.