Sunday, October 26, 2014

Kelley Lynch Email To IRS Re: Cohen's Personal Decision To Pursue IP Sales

From: Kelley Lynch <>
Date: Sun, Oct 26, 2014 at 1:55 PM
To: "irs.commissioner" <>, Washington Field <>, ASKDOJ <>, MollyHale <>, nsapao <>, fsb <>, "Doug.Davis" <>, Dennis <>

Hello IRS,

I spoke to Greg in April 2010, after Gianelli posted Cohen's Complaint online, and just prior to moving to Ft. Lauderdale.  We talked about Rock Star and issues related to Scientist.  

We discussed my ownership interest in Blue Mist Touring, the situation with TH and the private annuity obligation, and people's concerns about the tax advice Cohen sought and received.  Stuart Fried and Don Friedman addressed the fact that Neal Greenberg and Richard Wesitn handled the corporate and tax matters related to the TH deal and annuity.  

Greg mentioned that he's followed the Cohen/Lynch litigation issues in the trade and cannot believe this because, as he mentioned, Cohen and I were so close for so many years.  We talked about Kory's offer of palimony/50% community property.  That's addressed in DiMascio's memorandum to me and Dale Burgess did ask me to confirm for IRS and Treasury that he was present for that meeting with Kory.  I also met with my lawyers and Dale Burgess immediately after that meeting where this issue was discussed. We also discussed the need for a Blue Mist valuation.  Dale Burgess flew in for that meeting.  

Greg and I also discussed the fact that Cohen is now saying I was his business manager when I was his personal manager.  

Greg's position is that "Leonard Cohen was right to sell at that time.  He could never have gotten that much money again."  We all worked incredibly hard on these miserable deals.  Greg then advised me:  "I remember flying out t Los Angeles and meeting him {Cohen].  "I asked him, why are you selling this publishing catalogue?" Greg remembers he, Cohen, and I sitting outback at Cohen's picnic table.  Cohen replied to Greg:  "I want to sell this.  I don't believe in the future of hte music business."  

The following are excerpts from Leonard Cohen’s Declaration filed in the UCC
Lending Corp/CAK Universal Credit Corp v. Leonard Cohen (United States District
Court Southern District of New York, 00 Civ. 1068 DAB) matter dated August 30,
2000.  While Korn's Objections document, never filed with the Court per Judge Hess, refers to this as hearsay, Leonard Cohen personally signed this document under the oath of penalty.  The Terms & Conditions document Cohen signed, which led to this litigation, contains far more extensive confirmations including with respect to royalty amounts that were received on a yearly basis.  Obviously, Cohen understood that a $5.8 million bond securitization required serious yearly royalty income.  Maybe that's why Cohen, Kory, Rice, etc. failed to mention the CAK deal in the Complaint.  It's very important and was the sole reason for the creation of LCI.  It was created by me and Westin.  That's a lie in the Complaint.  Reeve Chudd formed it and it was owned 100% by Cohen so didn't give me IRS defense re. "unfettered control" insane accusations.  

This declaration confirms that Cohen understood he received substantial royalties on a  regular basis; Cohen decided to terminate the bond securitization loan deal; and that Cohen personally decided to pursue a deal with Sony: 

“I receive what I view to be substantial royalties, on a regular basis, from sales of my albums and uses of my compositions. On June 24, 1999, my transactional counsel advised plaintiffs in writing, as follows: As we discussed earlier today, due to the significant changes concerning the possible loan amount, our client Leonard
Cohen and his manager Kelley Lynch have decided to terminate the previous engagement letter with CAK … and to pursue another opportunity. My representatives subsequently discussed with Sony Music the possibility of Sony’s acquisition of the Rights … plaintiffs offered to advance $5.8 million as part of a proposed loan transaction. It is my understanding that in November of 1999, my representatives informed plaintiffs that I was seriously considering selling the Rights to Sony, if acceptable financial and related terms could be reached. In
response, on or about November 8, 1999, plaintiffs wrote to my personal manager and advised her that “In light of the recent events regarding Sony and their potential offer to purchase Leonard Cohen’s assets, we offer an alternative to the proposed Loan structure. I ultimately decided not to proceed with the loan and my representatives so advised plaintiffs. I declare under penalty of perjury that the foregoing is true and correct. Dated: August 30, 2000. Signed: Leonard Cohen.”

All the best,