A Settlement in Billy Preston's 10-Year Bankruptcy Case Opens a New Chapter For the Rock'n'Roll Legend
Courtesy Gerald R. Ford Library
Around this time last year, it didn’t seem like we would ever see the end of the Billy Preston Bankruptcy case. For more than nine years, the battle over the legacy of the legendary keyboardist, composer and vocalist dubbed by many (including John Lennon himself) as The Fifth Beatle, raged quietly under our nose in Ronald Reagan courthouse in Santa Ana. But finally, in May of 2015 the parties involved in the bankruptcy agreed to reach a settlement. The time it took to craft the language of the agreement between the parties took even longer—which brings us to early 2016.
We wrote a cover story last year detailing the rock star's life and tangled legal battle between Preston’s long-time friend and manager Joyce Moore (CEO of Preston Music Group Incorporated) and the William Preston Trust—Preston's Probate Avoidance Trust he'd created in 1999—against the bankruptcy Trustee R. Todd Neilson and his team of lawyers over Preston's rights, physical property, intellectual property and royalties sought after to settle his debts. Talk of a settlement didn’t emerge until after our story was published and even that didn’t seem to be going anywhere fast. Preston, who it was contended never authorized the bankruptcy filing in the first place, didn’t live to see how long and arduous the case would be (he died in 2006 after being in a coma for six months).
Court documents filed in January indicate that PMGI and the Trustee agreed to an uneven split sum of just under $2 million of Preston’s royalties that were held in contention. In addition, PMGI recovered all of Preston’s personal items, intellectual property rights, catalog, name, likeness, publishing, unregistered copyrights and works in progress at the time of his death. Moore drove a 16-foot truck full of Preston’s once seized belongings back from LA to her offices in Arizona the day after the Grammys.
“At the end of the day, giving up a substantial amount of royalties that belonged to PMGI was what it took to get this done, it wasn’t a problem for me,” Moore says. “I wasn’t thrilled, naturally, but sometimes you just gotta go 'oh well' and look at the big picture...Billy’s genius has gone unnoticed for too many years since his passing and it was truly time to resolve and move forward for a host of reasons.”
Ten years worth of unsuccessful attempts were made by Preston’s disinherited family members and the trustee’s bankruptcy lawyers at Lewis-Brisbois, Bisgaard & Smith (LBBS), to revoke The William Preston Trust. The Trust was reconfigured by Preston in 2004 to do acts of charity in his name and memory. They also voiced their disagreement with the terms of the settlement. However, in his tentative regarding the settlement, the case’s long time judge Theodore Albert said that unless the case was resolved soon, there would be no money left to pay anyone but the lawyers in the case, with the possibility of litigation dragging on for another 10 years.
“The terms of the settlement appear to assure that at least a portion of the identified assets, [the monies PMGI and the trustee agreed as settlement] will come into the bankruptcy estate without more opposition,” Albert wrote in his tentative ruling. “And if the numbers mentioned are realized, there might be some cents on the dollar for creditors on a net basis.”
Aside from his debts, which were primarily 20 year old IRS issues and the questionably filed bankruptcy, Preston’s illustrious career was also marked by drug addiction, health problems, and prison time. But despite all those obstacles throughout his life, Preston was still far from financially insolvent at the time of the bankruptcy and the coma and eventual death that occurred one month to the day after its filing. Moore says in 2006 Preston stood to make well over a million dollars between touring with stars likes Eric Clapton, the release of his Beatles tribute album and touring on his own.
“Billy Preston went to great pains to try to keep his house in order as it related to his legacy,” Moore says. “He set up a probate avoidance trust, set up a corporation, he and PMGI assigned the assets and the rights to his intellectual property to the corporation...[the Preston family and the trustee lawyers by nature of the bankruptcy process] did everything they could to undermine what he directed, what he wanted and how he wanted it. To me, protecting and upholding his wishes, well that was critical.”
Preston’s family says the deal reached between PMGI, The William Preston Trust and the Trustee unfairly denies them any assets in their probate case which is where the family, including Preston’s half sisters Lettie and Rodena Preston, would get to claim any money or property that belonged to Preston. Documents obtained by the Weekly show that a "Rodena Preston Williams" filed to open a probate in the name of William Everett "Billy" Preston on June 3, 2006—three days before Billy’s death, with full knowledge that he had a probate avoidance trust, that he was not a resident of California (he lived in Arizona at the time and for more than a year prior to his coma and eventual death) and didn’t own any real property in his name. With the Preston Trust intact, they don’t appear to be entitled to anything. Lettie was never named a beneficiary of Billy’s trust and Rodena and her son Henry were specifically disinherited in 2004 by Billy.
”The final agreement was a kick in the butt,” says Larry Watkins, the attorney representing Lettie Preston. Moore has called Lettie's blood relationship into question several times in court documents, stating that Lettie (who Watkins referred to in an interview with the Weekly as a "step sister") never provided a certified copy of her birth certificate verifying her parentage and relationship to Billy.
"The final agreement was an underhanded, undercover sneaky agreement that LBBS did with Joyce Moore,” Watkins says. By settling with Moore and splitting the assets, Watkins and Rodena Preston’s attorney Larry Lewellyn say that their clients are left on the sidelines.
"I feel like if you’re gonna sue somebody, you sue them and let the 9th circuit court make a decision of who’s right and who’s wrong,” Watkins says. “If [Moore] is wrong, then the suit should continue. The trustee should not capitulate because Joyce tired them out and the judge got tired also.”
The next hearing in the Preston family’s probate case will be in May. Watkins is attempting to sanction Janis Turner, The Preston Trust's lawyer—possibly as a way to get paid something somehow.
With the decade long bankruptcy out of the way, Moore says she still barely has time to savor the victory, there’s lots of work to be done to remind the world of Preston’s genius. In addition to working with Ray Charles, The Rolling Stones, Sam Cooke, Mahalia Jackson and more, Preston is the only artist ever given full label credit on a Beatles record, “Get Back.” His huge solo career in the ‘70s garnered hits such as "Nothing From Nothing," "Will It Go Round in Circles" and "That's the Way God Planned It." Now at age 70, Moore is happy that she still has the ability to make sure her friend is not forgotten.
“It means I can finally take and do what I promised Billy I would do which is protect, develop and operate his legacy,” Moore says. “It’s a lot of responsibility that requires a lot of assistance and cooperation so I’m calling on a lot of the top people I know in the industry to assist and advise.”
Had Preston been alive today, he’d be looking forward to his 70th birthday on September 2, a day that Moore says is a target to plan something special and noteworthy to honor his memory.
“I don’t know what that means just yet,” Moore says. “That day and Billy Preston will definitely not go unnoticed. I now have the clear right and rights to do what I promised I would do and honor my word to him which is all I’ve been trying to do this whole time.”
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Orange County, delivered to your inbox Monday through Friday.