In the world of music and poetry, Leonard Cohen's name resonates as one of the greatest. Known for his iconic songs like "Hallelujah" and "So Long Marianne," Cohen was more than a musician—he was a poet, a thinker, and a man deeply in touch with the struggles of love, loss, and life's inevitable falls. Yet, behind the scenes, his career and personal affairs were far more complex, entangled in legal and financial troubles that would eventually lead to a contentious fallout between Cohen and his longtime personal manager, Kelley Lynch.
Lynch, who worked with Cohen for 17 years, found herself embroiled in a web of tax disputes, allegations of fraud, and attempts to defame her character—culminating in one of the music world's most shocking betrayals.
The Beginning: A Promising Partnership
Kelley Lynch began working with Cohen in April 1988, shortly after the sudden death of his longtime manager and attorney, Marty Machat. Stepping into this role, Lynch had big shoes to fill but was well-prepared, having worked with Machat on projects for icons like Phil Spector and Cohen himself. In the early years, Lynch handled traditional management duties: overseeing Cohen’s tour for his iconic album I’m Your Man, working with the record company and tour promoters, and helping boost Cohen's catalog value by securing the rights to songs like "Suzanne." She also managed Cohen’s son, Adam Cohen, launching his music career and securing a recording deal.
Marty Machat’s Legacy and the Financial Shift
Marty Machat's death marked significant changes in Cohen's financial affairs. Without the guiding hand of his seasoned manager, Cohen turned to Herschel Weinberg, his personal family attorney, to help untangle various offshore accounts that had been established during Machat’s time. Cohen later told Lynch that Rolf Budde, his publisher in Germany, had helped him create these offshore accounts. After Rolf’s death, his son Andre Budde confirmed this information for Lynch. Budde handled the German-speaking (GAS) territories for Cohen, although the exact timeline for establishing the accounts remains unclear.
This marked the start of a complex financial saga, involving the establishment of new entities, convoluted deals, and a growing web of offshore companies that Lynch found increasingly suspicious.
IRS Concerns, Multiple Social Security Numbers, and the Earlier Audit
Shortly after Machat’s death, Lynch noticed discrepancies involving Cohen's social security numbers. In 1988, the IRS reached out about inconsistencies in Cohen’s records. Despite Cohen's testimony that he never changed his social security number, IRS documentation showed otherwise, raising suspicions about possible fraud.
During this period, Cohen and Weinberg worked to unravel offshore accounts such as New Era B.V., which handled Cohen’s music publishing. Lynch was asked to assist Cohen’s transactional attorney, Peter Shukat, with issues that arose during this process. These maneuvers raised alarms, particularly when Lynch discovered substantial sums being transferred through these accounts—such as a $100,000 gift to Cohen's then-girlfriend Dominique Issermann—raising concerns about tax evasion and income allocation.
In 1996, the IRS conducted an audit of Cohen's first intellectual property transaction: the sale of Leonard Cohen Stranger Music, Inc. to Sony. The audit scrutinized Cohen’s decision to gift stock from Stranger Music to the Mt. Baldy Zen Center, which added complexity to the tax implications of the deal. Lynch worked with Cohen’s accountant, Ken Cleveland, throughout the audit, which ultimately concluded favorably for Cohen. However, these events highlighted Cohen's pattern of using convoluted transactions to achieve financial and tax advantages. It was during this transaction that Machat & Machat's ownership interest in Leonard Cohen Stranger Music, Inc. was effectively disregarded. Cohen sold the entity's share without compensating Machat & Machat and withheld commissions due to them following Marty Machat's death—actions that further raised suspicions about Cohen's handling of financial matters.
The Tipping Point in 2002
The breaking point for Lynch came in 2002. By then, she was deeply aware of Cohen's financial and tax dealings. Cohen instructed her to assist his accountants and lawyers with documentation concerning two tax-related 1099s—one for $1 million and another for $7 million—which should have been issued to Traditional Holdings, LLC but were instead issued directly to Cohen. This caused panic among his advisors. Lynch became increasingly alarmed by what she was witnessing, feeling that Cohen or his representatives were attempting to obscure the truth and deceive the people involved, although she was not entirely sure of their exact intentions. Cohen had instructed Richard Westin to invoke attorney-client privilege on behalf of Neal Greenberg, which effectively left Lynch locked out of crucial information regarding what was going on.
Around this time, Lynch spoke with Steve Blanq at Hochman Rettig, the firm Cohen had brought in to handle the IRS investigation into the 1099s and ultimately assist with a tax petition in Tax Court and resolve the issue with the IRS Chief Trial Counsel. Lynch explained her concerns and tried to provide relevant documents related to Traditional Holdings, LLC, but Blanq informed her that Westin had invoked attorney-client privilege, effectively excluding her from the conversation. Lynch also heard lies being transmitted to Hochman Rettig by Westin on behalf of Cohen. Despite attempting to address these issues with Hochman Rettig, Cohen and Westin obstructed her efforts, leading to Lynch's growing concern. Given that the IRS had issued a request for business records to Sony, Lynch reviewed the request and ensured she took home all the documents they needed, including those that related to her ownership interest in the entities at issue, contracts, and more.
Traditional Holdings, LLC: A Complicated Entity
Traditional Holdings, LLC was intended to serve as the vehicle for Cohen's intellectual property and provide tax advantages.
In 1999, Cohen began negotiations with Sony for an $8 million intellectual property deal, leveraging this entity. Lynch’s role in both of these intellectual property transactions was to aid in negotiations, working directly with both Sony and Cohen's transactional lawyers to facilitate any requests for documents or information from all involved parties—including Neal Greenberg, Richard Westin, Ken Cleveland, and others. Cohen was deeply involved in the day-to-day details of these transactions as they unfolded, with Lynch primarily assisting with coordination, logistical support, and negotiations—including issues related to the delivery of Cohen's album Dear Heather, which arose later but were tied to the Traditional Holdings structure.
Dear Heather was a studio album requirement, and Cohen had promised Sony that he would tour to support it. Sony even wrote to Cohen, thanking him for letting Lynch cut through the over-lawyering by dealing directly with Stuart Bondell from Sony Business Affairs and resolving or tabling items related to the deal so it could close, the album could be delivered, and the advance paid.
Cohen insisted on structuring the deal as a stock sale rather than a straightforward asset sale, a decision that would later prove problematic. Lynch noticed glaring issues, such as Westin's concerns about “collapsible corporation” rules and the likely IRS scrutiny that would follow attempts to convert ordinary income into capital gains—a red flag for potential tax evasion.
Richard Westin: A Lawyer Who Inspired Distrust
Richard Westin was introduced to Cohen by Neal Greenberg and was brought on to help restructure Cohen’s business dealings and manage tax implications. However, Lynch found Westin evasive and incoherent, and his explanations often left her with more questions than answers. Even other professionals, such as those at the Grubman firm, found his suggestions unsatisfactory.
Later, she learned that the Grubman firm had consulted their outside counsel about Traditional Holdings, LLC, and were informed that it "wouldn't fly with the IRS." This confirmed what Lynch had suspected all along.
Due to the way these matters were handled—particularly the formation of Traditional Holdings by Cohen and his lawyers—Lynch had asked for an indemnity agreement regarding her role in the entity. She did not fully understand her position or how she had invested in it via a promissory note. After discussing these concerns with Cohen, he instructed Westin to prepare the agreement for her, ensuring that she wouldn't be left with debt related to the promissory note if Cohen were to die. Initially, Lynch thought this was a considerate gesture, but she later saw it as part of an ongoing scheme.
The Role of Neal Greenberg
Neal Greenberg played a prominent role in Cohen’s financial dealings. He was, in Lynch’s view, a manipulative figure who defrauded many people, including elderly individuals and the Buddhist community he was a part of, until he was investigated and effectively shut down by the SEC. Despite his unethical behavior, Cohen had a close professional relationship with Greenberg and seemed to hold him in high regard.
The Growing Web of Financial Complexities
As the years went by, Cohen’s financial affairs grew even more convoluted.
Lynch was a key figure supporting Cohen as he pursued multiple intellectual property transactions, including a deal involving his catalog with Sony. She was responsible for facilitating these deals and assisting with negotiations that Cohen believed would ultimately benefit him. However, the deeper Lynch delved, the more she saw that these complexities were both legal and ethical.
In retrospect, Lynch realized that her role had evolved far beyond that of a typical manager. She had become embedded in a network of legal structures, tax arrangements, and business deals—many of which carried significant risks. The evasive answers from Cohen’s advisors further fueled her suspicions. When these financial dealings began to unravel, Lynch found herself at the center, particularly as Cohen’s insistence on retaining control over his intellectual property while attempting to circumvent tax liabilities came into focus.
A Story Still Unfolding
What began as a promising partnership based on trust and creative collaboration spiraled into a legal and financial quagmire, leading to lawsuits, accusations, and a very public fallout. Kelley Lynch’s story is one of loyalty that turned into disillusionment—a journey from the height of fame into the shadows of complex financial dealings and their consequences. As the lawsuits continue to unfold, Lynch’s revelations about Leonard Cohen, his estate, and the Family Trust are shining a light on the dark side of fame, exposing the lengths some will go to in order to protect their wealth.
