Tuesday, November 25, 2014

Just Incase Part II

A continuation of Just Incase You Don’t Hate the Brothers Koch Enough:


J. Howard Marshall II became a 14.6% stakeholder in the privately held Koch industries in the 1950’s when he invested in Daddy Koch’s oil refining business. JHM II had two sons. J. Howard Marshal III and E. Pierce Marshall (with no nifty generational numbers). At JHM III’s wedding, Daddy Marshall gave both sons 4% of Koch Industries. 

So far, relatively easy to follow, right?

Recall the 1980’s extensive legal battle of the Koch boys? Well, JHM II and his son E. Pierce backed the two Brothers Koch who were ultimately successful while JHM III backed the two Want-To-Be Brothers Koch. Never, never, never back the loosing side against your dad when an enormous amount of money is up for grabs. JHM II demanded a return of the gifted 4% and ultimately ended up paying $8 million to buy it back. (It is worth over $2 billion now.) Then, possibly following Daddy Koch’s lead, he cut his eldest out of the will.

Later that decade, post litigious victory, JHM II became um . . . “involved” with Lady Diane Walker, a woman with um . . . exotic talents. Sadly, she died in 1991 from complications of a facelift and JHM II, a classy guy, sued her estate to recover $15 million in gifts when he discovered her um . . . infidelity.  The 86 year old found himself in need of another stripper and met Anna Nicole Smith (then Vickie Lynn, either being appropriate Playboy monikers) at a Houston strip joint. 

This next sentence I’m lifting it right out of the Forbes article because it is perfect: “Vickie Lynn was reportedly on the day shift because of her lack of experience and (then) small breasts, and Howard was too old to go out at night.” So it was meant to be!

Anna Nicole, gifted with larger breasts, became the Playmate of the year and a Guess jeans model. JHM II became a groom for the third time.

From People Magazine’s article covering the 1994 nuptials: The bride wore cleavage. The 89-year-old groom, speaking from his wheelchair, assured the 11 people in attendance that he sure did adore his new 26-year-old wife, for whom he already had purchased $1 million worth of jewelry. After the champagne-and-chocolate-cake reception, the bride kissed her man and whispered, "Bye, darling, I'm off to Greece."

13 months later, like all good sugar daddies, JHM II died.

Unfortunately for Anna Nicole, E. Pierce Marshall had shuffled around the Koch stock to avoid financing both her and the IRS.

Pierce then sued his stepmother, 28 years his junior, for defamation. She may have suggested her stepson used deceit and fraud in prevented her dear husband from lavishing her with appropriate finances. The grieving bride filed for bankruptcy in 1996.

The California bankruptcy judge dismissed Pierce’s defamation case and awarded Anna Nicole $475 million against Pierce for interfering with her inheritance. Pierce appealed.

It gets even better! As said by Leona Helmsley, “We don’t pay taxes. Only the little people pay taxes.” Granted, that was before she was jailed for tax evasion, but it appears to be a popular attitude.

While the IRS might not have as nice cleavage as Anna Nicole, they do have more resources and Pierce was taken to court for tax evasion. The younger Marshall boy paid $63 million to the US Government and he agreed to pay $112 million more. However, not just yet because he was a little busy.

Anna Nicole and her older stepson JHM III (separately) tired to overturn JHM II’s will in 2001. Texas probate court took its sweet time to say nope. Pierce, quite the litigious impresario, counter-sued Anna Nicole and his brother, claiming they were interfering with his excellent management of his father’s estate. A Texas jury agreed and ordered JHM III to pay $35 million to his brother. They made no such claims against Anna Nicole. (Possible because of the cleavage.) However, the judgment was reevaluated by the probate court and reduced to $10 million.

JHM III and Mrs. JHM III filed for bankruptcy in California, listing $13 million in assets. Evidently the bankruptcy judge (the same judge that heard the bankruptcy case for Anna Nicole) agreed that amount was appropriate for bankruptcy and approved a reorganization plan in 2003. But Pierce, you may have guessed, brought a lawsuit in Texas probate court to block the reorganization, tattling on his brother that their mom had given him an additional $6 million, paying out $50,000 a month.

Pierce died in 2006. However, his widow filed an emergency stay to prevent the bankruptcy. Another lifted sentence from the Forbes article: “More than a decade later, they are still in apparently comfortable bankruptcy in Pasadena, California.”
In 2013, JHM III withdrew his case for bankruptcy leaving the Texas probate court back in control of his finances.

The IRS, estimated $413 million were paid in dividends from those stocks between 1996 and 2006. Not a bad investment. However, the E. Pierce Marshall estate representatives are claiming that this benefited the JHM II estate and certainly not the EPM estate and the JHM estate is now broke. Too bad so sad. 

A federal Texas court declined to accept this creative shell game and stuck with the originally agreed upon $112, plus interest and penalties. Sort of. The ruling is being held until 2015, after appeal. Pierce's widow was listed by Forbes as the fourth richest woman in America with $12.7 billion, but no rush to pay those taxes honey.  I'll send in some extra on my end.

Remember when Al Capone just went to prison for tax evasion instead of meandered around for an additional 20 years while he appealed? 

Once again, I have exceeded my length of attention span per post. However, trust me, you want to stay tuned for the rest of the story because it is truly bizarre, in that slow motion, larger than life, train wreck kind of way. (You know who I'm taking about.)

Also the Brothers Koch are coming up and who would want to miss that?

The final instillation is here: 


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