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Little Remains of Menendez Estate, Records Show : Courts: Inheritance of $14.5 million was lost to taxes, lawyers' fees and inflated real estate appraisals, probate files reveal.

April 03, 1994|ALAN ABRAHAMSON | TIMES STAFF WRITER

The Menendez brothers have said they are broke. It turns out they are right.

Initially valued at $14.5 million, the Menendez family estate has almost entirely been run through, according to recently unsealed probate records that explain how the millions were lost to taxes, legal fees, inflated real estate appraisals and even bad karma.

All that technically remains of an estate that boasted of prime Beverly Hills real estate and millions of dollars in entertainment industry stocks is one house in Calabasas, a condominium in New Jersey, some jewelry, a few pieces of furniture and $651,948 in cash, the probate files show.

Nearly $10.8 million has already been spent, the records reveal, about half of that in taxes and lawyers' fees for the defense of sons Lyle and Erik Menendez, who admit that they killed parents Jose and Kitty Menendez.

What's left, after figuring in millions in losses on the sale of real estate and stocks, is simply not enough to pay a mountain of debts that grows higher each day as interest accrues.

"The money goes," said one attorney familiar with the files. "It just goes."

So much of it is gone, according to the files, that even if Lyle and Erik Menendez were to be acquitted of murder in the Aug. 20, 1989, shotgun slayings of their parents, they would stand to inherit nothing--a remarkable turn of events for a case in which prosecutors have long contended that the brothers killed out of hatred and greed.

At their first trial, the brothers asserted that money had nothing to do with it. They testified that they killed in fear and self-defense after years of physical, emotional and sexual abuse.

That first trial ended in January when separate juries, one for each brother, deadlocked between murder and lesser manslaughter charges. Prosecutors immediately vowed to try the brothers on murder charges, and again to seek the death penalty.

No date has yet been set for the retrial. But in anticipation of the second trial, and after reviewing the probate files, a judge assigned two public defenders to take over Lyle Menendez's case. Attorney Jill Lansing left the case to spend more time with a young daughter.

Defense lawyer Leslie Abramson, who represents younger brother Erik Menendez, wants to stay on for the retrial. She is due to appear Tuesday at a Los Angeles Superior Court hearing to renew her request to be paid $100 per hour, up to $250,000, in taxpayer money.

Abramson has justified her request by saying that the brothers are out of money.

The probate files back up that assertion.

*

When he was killed, Jose Menendez was the highly paid chief executive officer of Live Entertainment, a Van Nuys-based video distribution firm and a subsidiary of Carolco Pictures, the movie production company. If he had lived, he stood to make a bonus of $850,000 for 1989 alone, the probate files reveal.

Under California law, all his property was split equally with his wife. Under their wills, their sole heirs were their sons.

The estate was first thought to be worth $14,501,342, according to a probate document filed Aug. 22, 1990.

That, though, left out $164 in savings bonds, $30,470 in jewelry and $28,044 in furniture, clothes and personal things that had been overlooked.

The added $58,678 brought the original total to $14,560,020, according to a Nov. 26, 1990, probate filing.

In large measure, according to the court records, the estate was made up of three assets: a mansion in Beverly Hills appraised at $4.8 million, the house in Calabasas appraised at $2.65 million and 330,000 shares of stock in Live Entertainment appraised at $6.58 million.

The remainder included items such as the jewelry, the furniture and oddities such as 16 French francs said to be worth $2.46.

For accounting purposes, the probate files also include in the asset column some $1.3 million in income generated from 1989 through April 30, 1993, the date on which the executors submitted the balance books. No updates have been filed since.

The files also add in gains on stock sales during those four years, bringing the value on the books to a grand total of $16,018,906.

It is that figure--not the $14.5 million estimated in the estate at the time of the killings--from which the calculating is actually done.

The estate has paid $3,906,280 in taxes, most of it in estate taxes.

To defend Lyle Menendez, it spent $740,000. That sum was divided among attorneys Gerald Chaleff, Joel Isaacson and Lansing. To defend Erik Menendez, it spent $755,000. Abramson earned $740,000; Robert Shapiro, the younger brother's first attorney, earned $15,000. Total in criminal defense fees: $1,495,000.

The estate spent $2,743,219 on the Beverly Hills house and $1,404,007 on the Calabasas site, mostly for mortgages and upkeep.

The estate allocated $314,384 for "Lyle's miscellaneous expenses." Of that, $300,000 went for the purchase of a New Jersey chicken-wing restaurant, said an attorney familiar with the file.

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