AEG execs face questions about Michael Jackson’s death

Updated 4:46 PM EDT, Mon May 20, 2013

Story highlights

NEW: AEG Live exec says listing doctor's fees as "production costs" was a mistake

NEW: AEG Live asked Jackson estate to repay $300,000 for the doctor

AEG Live's controller confirms company budgeted $1.5 million for Michael Jackson's doctor

An AEG expert testifies it should have been "a red flag" when Murray asked for $5 million

(CNN) —  

AEG Live asked Michael Jackson’s estate to repay the concert promoter $300,000 for Dr. Conrad Murray’s fee three weeks after Jackson’s death, court testimony revealed Monday.

The revelation contradicts AEG Live’s defense that it did not hire or pay the doctor convicted in Jackson’s death.

“To me, it’s a mistake,” AEG Live Senor Vice President and General Counsel Shawn Trell said when confronted with a letter sent to Jackson’s estate.

Trell, testifying Monday in the Michael Jackson wrongful death trial, also said his company’s chief financial officer made another major error by classifying Dr. Murray’s fees as “production costs” and not “advances” in all of the budgets for Jackson’s “This It It” tour.

“Mistakenly, yes,” Trell said.

Despite these “mistakes,” Trell called the CFO “a very detailed-oriented guy.”

Jackson’s mother and children are suing AEG Live, contending the concert promoter is liable in the singer’s death because its executives negligently hired, retained or supervised Dr. Murray, who was convicted of involuntary manslaughter.

The promoters ignored a series of red flags that should have warned them Jackson was in danger as he was pressured to get ready for his comeback concerts, the Jackson lawsuit claims.

AEG Live lawyers counter that it was Jackson who chose, hired and supervised Murray, and that he was responsible for his own bad decisions. Its executives could not be expected to know Murray was using the surgical anesthetic propofol, the drug the coroner ruled killed Jackson, to treat his insomnia, they argue.

Testimony from Trell – and, earlier, AEG LIve controller Julie Hollander – showed the company’s budgets included $1.5 million to pay Murray $150,000 a month.

The budget terminology could be key in the jury’s decision on AEG’s liability, since production costs were the promoter’s responsibility, while advances were basically loans to Jackson. The revelation that the doctor’s fees were designated as production contradicts the defense that AEG lead lawyer Marvin Putnam shared with CNN before the trial.

AEG Live’s role with Murray was only to “forward” money owed to him by Jackson, just as a patient would use his “MasterCard,” Putnam said. “If you go to your doctor and you pay with a credit card, obviously, MasterCard in that instance, depending on your credit card, is providing the money to that doctor for services until you pay it back. Now, are you telling them MasterCard in some measure in that instance, did MasterCard hire the doctor or did you? Well, clearly you did. I think the analogy works in this instance.”

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The doctor signed the contract prepared by AEG lawyers and sent it back to the company a day before Jackson’s death. The company argues it was not an executed contract because their executives and Michael Jackson never signed it.

The Jackson lawyers argue that e-mails, budget documents and the fact that the doctor was already working for two months showed a binding agreement between AEG and Murray.

Panish, speaking outside of the courtroom Friday, said he would also ask Trell about AEG’s insurance claim, which he said his team recently discovered was filed with Lloyds of London on June 25, 2009, hours after Jackson was pronounced dead at UCLA Medical Center.

That revelation may not relate to the heart of the wrongful death lawsuit against Michael Jackson’s last concert promoter, but Jackson lawyers hope it could sway jurors to see AEG Live executives as motivated by money over the pop icon’s needs.

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A Lloyds of London underwriter later sued AEG, claiming the company failed to disclose information about the pop star’s health and drug use. AEG dropped its claim for a $17.5 million insurance policy last year.

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Jackson lawyers played video testimony of one of AEG’s own expert witnesses Friday – 25-year veteran tour manager Marty Hom.

The opinion Hom submitted for AEG concluded he saw no red flags that should have alerted the promoter that something was wrong with Murray.

He was asked if AEG Live should have realized something was wrong when Murray initially asked for $5 million a year to work as Jackson’s personal physician. “That raised a red flag because of the enormous sum of money,” Hom testified.

Hom acknowledged he had not seen many of the documents and depositions in the case, and AEG was considering him for a job as the Rolling Stones tour manager at the same time he was asked to testify.

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