The Angell Foundation: Income Irregularities

This post is comprised of material originally posted on Let's Roll and is reproduced here for the purpose of keeping my blog up-to-date and active. The originals can be found @ http://letsrollforums.com/showpost.php?p=189785&postcount=20 and http://letsrollforums.com/showpost.php?p=189814&postcount=23.

On the subject of financing, here's some details on The Angell Foundation's assets and income for financial years 2007/8 and 2008/9:

2007/8
Assets $65,963,860
Income $12,225,299
Source: http://www.faqs.org/tax-exempt/CA/Angell-Foundation.html

2008/9
Assets $82,434,193
Income $23,782,211
Source: http://www.implu.com/nonprofit/10789717

This is serious money indeed. The couple's entire estate was valued at $55 million in 2001, yet somehow the Foundation has managed to earn close to half that amount in just one financial year, and well over half in just two financial years!

For those interested, I provide below links to the Foundation's tax returns for the period June 2002 - June 2009.

• 2002/3
• 2003/4
• 2004/5
• 2005/6
• 2006/7
• 2007/8
• 2008/9

To put this in perspective, here's the Foundation's total grantmaking for the years in question:

2008: $2,814,200
2009: $3,560,800

A spreadsheet listing all the Foundation's grants made between 2002 and 2009 is available at http://www.mediafire.com/?h9b99v2v6po7a99 for those interested.

Could the bulk of this extraordinary large income represent Frasier royalties? Is this show bringing in similar amounts for Angell's partners, David Lee and Peter Casey, over six years after production ended and nine years after Angell's last input? Is this even remotely plausible?

The answer to this question appears to be Yes and No. On the one hand, the 'estate of David Angell' initiated (and ultimately lost) a lawsuit against Angell's partners, Peter Casey and David Lee. The suit alleged that Angell was entitled to receive producer fees for the last two seasons of Frasier. The full details are as follows:

Chathamscape, Inc. v. Mudville Productions, Inc. and Donut City Productions, Inc. (Edward A. Klein, Joseph R. Taylor – Liner Yankelevitz Sunshine & Regenstreif). Mr. Neches testified as an expert in an A.A.A. arbitration on behalf of Respondents Mudville and Donut City in this breach of contract matter. Chathamscape was a loan-out corporation owned by David Angell, one of three executive producers of the successful television series Frasier. Based on its interpretation of a partnership agreement among the three parties, the estate of Mr. Angell (who was killed in the 9/11/2001 terrorist attack) claimed Chathamscape was entitled to a one-third share of executive producer fees earned by Respondents (loan-out corporations for two other executive producers of Frasier) for the last two seasons of the show (which aired in 2003 and 2004). Mr. Neches testified regarding his analysis of income tax returns and financial statements of the parties, which showed that Claimant's claim was inconsistent with the manner in which executive producer fees had been distributed among the parties throughout the life of the partnership. Result: the Arbitrator ruled in favor of Respondents."

Source:http://www.thomasneches.com/trial.htm#Grub

Here, Mudville and Donut City are the loan out companies of Peter Casey and David Lee respectively. This case suggests that the Angell estate did not receive any additional revenue over-and-above any royalty fees Angell may have been entitled to. In this context, we should note that that Angell's loan out company, Chathamscape, is listed as active, so I assume that royalty payments are still channeled through this company. You can view the company's details by visiting http://kepler.sos.ca.gov/cbs.aspx and searching for Entity Number C1408982.

On the other hand, we know that Frasier was embroiled in a financial scandal, with NBC claiming that the most successful sit-com ever was $200 million in the red and never made a profit, despite the $1.5 billion in revenues it generated. This resulted in a 2005 lawsuit brought by representatives of David Lee, Peter Casey and David Angell. The outcome of this case is unknown. As the LA Times article on the subject reminds us, Hollywood doesn't like to air it's dirty laundry in public. Accordingly, the case probably ended in an unpublicised out-of-court settlement. This could, then, explain the Foundation's recent income, although in the absence of evidence this remains pure speculation.

Regardless, I for one am in dire need of Perry Oretzky's services as a financial advisor!