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Date Posted: 22:40:17 04/08/02 Mon
Britney's attorneys tangle with Hub-based charity
by Gayle Fee
Monday, April 8, 2002
Pop princess Britney Spears and her erstwhile boyfriend, 'N Sync's Justin Timberlake, are the latest celebrity do-gooders to bolt from the controversial Boston-based Giving Back Fund.
But charity czar Marc Pollick, who previously parted ways with football hero Doug Flutie and ex-Celtic Dee Brown, isn't letting his prized pair go without a fight - he's filed a $14 million suit in federal court in Boston over the split.
``He's taken a very aggressive position,'' said attorney Michael Friedman, who is representing the Spears-Timberlake side. ``Their case claims that there is some obligation to continue the association with the Giving Back Fund when none exists.''
But the fund's lawyer, David Rosenthal, disagrees.
``Nobody's trying to hold on to something against somebody's will, that's not what this is about,'' he said. ``This is about the wrongful conduct of a couple of New York lawyers. I am offended at the way they behaved and I believe the judge will be, too.''
Pollick's Giving Back Fund filed suit against Mark Steverson, a New York attorney who represents Britney, Steverson's boss, Laurence Rudolph, and former Giving Back Fund employee Corina Biggar charging, among other things, ``misappropriation of a valuable business opportunity.''
The suit contends that Steverson, who sat on the board of directors of the Giving Back Fund, breached his ``fiduciary duty'' by advising Britney and Justin to leave the GBF and ``sabotaged GBF's business relationship with two of its most important donors to benefit himself and his employer.'' Biggar, the suit charges, aided ``the unlawful conduct.''
``This is not a suit against Britney Spears or Justin Timberlake,'' Rosenthal said. ``This is about a lawyer who sat on our board and as such did not have the right to interfere with the relationship between the Giving Back Fund and these clients.''
Rosenthal said Steverson and Rudolph tried to control the way the GBF did business, pressured Pollick to hire an ``unqualified'' fund-raiser and, when Pollick balked, ``took their ball and went home.''
``This is the conduct of bullies,'' he fumed. ``There's an attitude of `How dare anyone tell me what to do. I'm Britney Spears' lawyer.' ''
But Friedman said the issue is much simpler: Spears and Timberlake became disillusioned with the Giving Back Fund and wanted to take control over their foundations and run them themselves.
``These young entertainers have sought to pursue their charitable and philanthropic activities through their own efforts,'' he said. ``But the Giving Back Fund seems to take this proprietary view that once you step into their domain you can't exit their domain. It's not an appropriate or credible position for them to take.''
Court papers illustrate just how nasty this battle is shaping up. In a letter to Spears' attorney, Rosenthal offers to drop the suit if Spears and Timberlake make a ``total contribution'' of $500,000 to their foundations at the GBF, pay $750,000 to the GBF ``to compensate it partially for the destruction of its valuable business relationships with Britney Spears (and) Justin Timberlake . . .'' and allow the GBF to continue to use the pop stars' ``names and images'' in marketing materials. If the matter was not resolved ``amicably,'' the letter suggests that the GBF could make the dispute public.
In a motion to dismiss the suit, filed Friday, Spears' side termed the threat of ``adverse publicity'' an attempt to ``extract a tribute in an amount beyond the wildest imaginable damages.''
The ugly court fight comes at a particularly bad time for the Giving Back Fund and its director, Pollick. In addition to losing its most famous clients, the Fund has experienced a stream of resignations by board members and staff.
Also, Pollick and the Fund are being sued for $20 million by a California promoter who contends that Pollick collected more than $600,000 for charity - then threatened to hold onto the money until he was paid a $100,000 fee.
``The allegations are ludicrous,'' Rosenthal countered. ``This was a defensive lawsuit to avoid a lawsuit in Massachusetts.''
In fact, Pollick and the Fund have filed a cross complaint against the promoter, Aaron Tonken, for breach of contract, fraud, unfair business practices and breach of fiduciary duty. That complaint seeks damages of at least $1 million.
The Tonken dispute arose after the promoter hired the Giving Back Fund to be the fiscal agents for a charitable fund-raiser called Family Celebration 2001, held just over a year ago at the Beverly Wilshire Hotel in Los Angeles.
Former president Clinton was the guest of honor at the event that was chaired by ``Ally McBeal'' producer David E. Kelley and his wife, actress Michelle Pfeiffer. A parade of stars attended, including Calista Flockhart and the rest of the ``Ally'' cast, Elizabeth Taylor, B.B. King, Whoopi Goldberg, Dwight Yoakam, Marc Anthony, Timberlake, who performed with 'N Sync, and Spears.
In his suit, Tonken claims that Pollick and the GBF ``failed to provide those services normally performed by fiscal agents,'' and he had to hire another firm to do the work. That firm charged $11,000 for doing the work the GBF wanted $100,000 to do, the suit says.
The event raised $603,000 but, according to the suit, Pollick refused to distribute the funds to charity unless he was paid his $100,000 fee. Furthermore, the suit alleges that Pollick slandered Tonken by calling him ``a crook.''
``All of the parties, the cast of `Ally McBeal,' 'N Sync and Aaron Tonken want to see the monies released and are all chagrined that they weren't released sooner,'' said Tonken's attorney Philip Levy. ``But here we are almost a year down the road because of the hardball tactics of Pollick and the Giving Back Fund.''
Pollick did not return calls but Stephanie Sandler, senior vice president of the Giving Back Fund, said a dispute over which charities were entitled to the proceeds of the event is holding up distribution of the money - not the fund's demand for their fee.
``I don't believe the fee has ever been an issue,'' she said. ``We would like to be paid for the services provided but that's not an issue as far as the distribution of the money.''
Levy said there is an agreement in place that would settle which charities get how much but Sandler said the GBF knows of no such agreement and has asked the court to settle the matter.
``Pollick comes across as a very earnest and compassionate kind of a person but the allegations in the complaint tell a different story in terms of his actual business practices, which are unfair business practices,'' Levy said.
Countered Sandler: ``I know Marc and that's not true.''
Pollick started the nonprofit organization in 1997 offering athletes and celebrities a one-stop service for establishing and administering their charitable foundations. The service is attractive to stars who want to raise money for charity but don't have the time or expertise to complete the volumes of paperwork and legal obligations associated with setting up and running a foundation. Pollick charges a percentage - usually 5 percent - of the amount in the foundation for the fund's services.
``That's why Britney Spears goes to the Giving Back Fund,'' Rosenthal said. ``While she's running around the world dancing and singing and making Pepsi commercials she has people to do these things for her.''
But according to sources, some of the celebrities and sports figures who had foundations at the GBF became frustrated with Pollick's perceived reluctance to disburse funds that were raised for charity. The fund's fees are based on a percentage of the foundations' assets. Larger assets equal larger fees.
Sandler dismissed any suggestion that the fund was holding out on charities to pump up its fees.
``The Giving Back Fund has distributed over $6.5 million in grants in the five years it's been in business,'' she said. ``That's about 65 percent of the money we've received - far above the average.''
A year ago, San Diego Chargers quarterback Doug Flutie, who had raised more than $2 million for autism research, broke ranks with the Giving Back Fund. But Pollick refused to move the money Flutie and his wife raised to their new charitable organization, the Doug Flutie Jr. Foundation for Autism.
The Fluties have since reached an agreement with Pollick that will eventually lead to the funds being transferred. But until such time, the agreement allows the Giving Back Fund to continue to collect its fees, according to a source familiar with the deal.
Sandler declined comment citing ``client confidentiality.''
Ex-Celtic Dee Brown also attempted to move money, all of which he had personally donated, out of the GBF and into a fund under his control when he left Boston. But Brown was thwarted by the GBF and eventually agreed - unhappily - to leave the money there.
Spears established her charitable foundation at the Giving Back Fund in 1999 after her attorney, Rudolph, met Pollick at a fund-raiser and struck up a conversation. Among other things, her foundation helped finance the Britney Spears Camp for the Performing Arts on Cape Cod. Around the same time Spears joined the GBF, Timberlake started a foundation there, too.
Last fall the pop stars made the decision to leave the GBF and establish their own foundations under their control. Biggars and another former GBF employee, John McMahon - the ``unqualified fund-raiser'' Pollick didn't want to hire - run Spears' new operation.
Because of the split, the pop stars' people refused to turn over $100,000 raised at a charity basketball event in Las Vegas to the Giving Back Fund, despite the fund's demands that they do so.
``As the relationship deteriorated there were feelings of mistrust,'' Friedman said. ``They didn't want to turn the proceeds over to the Giving Back Fund but the money is being maintained and will be used for charitable purposes.''
But Rosenthal said that funds raised when Spears was still with the Giving Back Fund shouldn't go to her new foundation.
``We know that there is a population of 14-, 15-, and 16-year-old girls who want to be Britney Spears and when a 14-year-old makes a contribution it should go to the foundation that it was intended for,'' he said.
Although Spears and Timberlake's publicist says the pair ``ended their association with the Giving Back Fund in the fall of 2001,'' a flattering Boston Globe profile of Pollick in January said they were still clients. And the GBF Web site continues to feature pages on Britney and Justin.
Of course, as the court battles rage on, the money that was raised for various charities sits in limbo. That includes the $603,000 from the Family Celebration 2001, the $100,000 from the Las Vegas basketball game, and an unknown amount that came from a plea Britney made for donations in the best-selling book she wrote with her mother, Lynne.
But the pop star has given a clear signal that she's moving ahead with her charitable program despite the legal hassles. Last week, she announced that the new Britney Spears Foundation will donate $1 million to the Twin Towers Fund to support the children of Sept. 11 heroes.
I think its cool she has donated 3 million dollars. How much has Nsync donated? And these people are obvious just after their money. How sad.