MILLS MUSIC TRUST - Quarter Report: 2009 March (Form 10-Q)

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PART I — FINANCIAL STATEMENTS
	Item 1. Financial Information
MILLS MUSIC TRUST STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS THREE MONTHS ENDED MARCH 31, 2009 AND 2008
	Item 2. Management’s Discussion and Analysis of Results of Operations
	Item 3. Quantitative and Quantitative Disclosures About Market Risk.
	Item 4T Controls and Procedures
PART II — OTHER INFORMATION
	Item 6 Exhibits and Reports on Form 8-K
SIGNATURES
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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Table of Contents

*		In December 2007, $4,375 of Trustee and transfer agent fees, scheduled to be paid, were not paid due to a clerical error. These fees were paid in February 2008.

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PART I — FINANCIAL STATEMENTS

Item 2. Management’s Discussion and Analysis of Results of Operations

     The Trust’s receipts are derived principally from copyrights established prior to 1964 and such receipts fluctuate based upon public interest in the “nostalgia” appeal of older copyrighted songs.

     The Trust’s contingent fee income over the last three years has averaged approximately $1,151,000 per year. In addition to the above, there are a number of factors which create uncertainties with respect to the ability of the Trust to continue to generate that level of income on a continuing, long-term basis. Those factors include the effect that foreign and domestic copyright laws and any changes therein have or will have on both licensing fees and renewal rights ultimately, copyright expirations under such laws and the effect of electronic copying of materials without permission.

     In 1976, the copyright law was changed for works that were within renewal terms between December 31, 1976 and December 31, 1978 to add an extension of 19 years to the 28-year renewal term. The original copyright term is 28 years. That amendment made the copyright term 75 years. The Copyright Act of 1976 provided for a single term of life plus 70 years after author’s death (with some variations in different circumstances) for works created after January 1, 1978. The 1976 act provided that the writer and his heirs could terminate a transfer or license of the renewal copyright that was executed before 1978, so long as the termination was effected in a five-year period following the end of the initial 56-year period.

     The copyright laws were modified by the Sonny Bono 1998 Copyright Term Extension Act (the “Act”), which generally provided an additional 20 years of copyright protection. For works created by identified natural persons the term now lasts from creation until 70 years after the author’s death. For anonymous works, pseudonymous works, and works made for hire, the term is 95 years from publication or 120 years from creation whichever expires first. For works published before 1978 with existing copyrights as of the effective date of the Act, the Act extends the term to 95 years from publication. In January 2003, the U.S. Supreme Court upheld the constitutionality of the Act in the Eldred v. Ashcroft decision, which affirmed a 2001 decision of the U.S. Court of Appeals for the District of Columbia Circuit.

     The copyright laws provide that renewals vest in any person who is entitled under the rules of statutory succession to the renewal and extension of the copyright at the time the application to renew is made. If no renewal is made, renewals vest in any person entitled under the rules of statutory extension as of the last day of the original term of copyright to the renewal and extension of copyright. The writer (and not the publisher to whom the copyright was originally assigned) owns the renewal right. The laws name specified classes of persons (the writer’s wife, his children, etc.) who will succeed to the renewal right if the writer dies before the end of the original term. The Act does not distinguish between composers and lyricists. However, if the composer and lyricist are not the same, each owns a portion of the renewal rights. The composer and the lyricist may, assign their respective interests in the renewal rights to a publisher at the time of the

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assignment of the original copyright term. Such an assignment of the renewal term is effective, however, only if the assignor survives the original term. If he does not, his heirs will succeed to his share of the renewal rights; and, in such event, these heirs are not obligated by the assignment of the rights to the publisher to whom the original assignment was made unless they joined in the assignment. In addition, the 1998 Copyright Extension Act allows writers (or their heirs) to elect, after either a 35 or 40-year period as specified in the statute, to terminate a transfer of license or renewal within five years of the expiration.

     A listing received in 2009 from EMI (the current owner and administrative entity for the copyright materials) of the top 50 money earning songs for the year 2008, of the subject copyrighted songs, with the original copyright dates shown, indicates that the copyright dates range from 1922 to 1960. The listing indicates that the copyright of one song has expired and is in “public domain”. The gross royalties EMI received for this song aggregated less than 2% of the gross income of the top 50 earning songs. EMI continues to administer this song for the copyright owner.

     No copyrights of the balance of the top 50 songs will reach the 95-year expiration within the next five years. However, in 2010 EMI will lose the U.S. rights to one song, amounting to approximately 1% of the gross income of the top 50 earning songs, but will continue to administer this song on behalf of the copyright owner.

     Seven of the top 50 songs account for approximately 65% of the earnings attributable to the 50 songs. The earliest expiration of the copyrights for these seven songs is 2024.

     The Trust cannot determine EMI’s ability to secure renewals of the copyrighted material; however, under the trust agreement, EMI must use its best efforts to do so.

     EMI and the Trust agreed to continue efforts to settle disputes arising from deductions taken by EMI in connection with royalty payments to the Trust in prior years, without any litigation.

     In furtherance of those efforts, on October 4, 2007, EMI and the Trust executed a Tolling Agreement. Pursuant to the Tolling Agreement, the parties agreed to suspend recognition of the passage of time for purposes of any relevant statue of limitations defenses to claims under the agreement governing the payment of royalties and not to commence litigation while the Tolling Agreement is in force. The Tolling Agreement, which was scheduled to initially expire on April 1, 2008, has been extended by mutual written consent through August 24, 2009.

Item 3. Quantitative and Quantitative Disclosures About Market Risk.

     Not applicable.

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Item 4T Controls and Procedures

     As of the end of the period covered by this Quarterly Report, the Trust carried out an evaluation of the effectiveness of the design and operation of the Trust’s “disclosure controls and procedures” (as defined in Rules 13a-15 (e) and 15d-15 (e) of the Securities and Exchange Act of 1934, as amended) under the supervision and with the participation of the Trust’s management, including the chief financial individual providing accounting services and the trust officer of the corporate trustee. Based on that evaluation, the chief financial individual providing accounting services and the trust officer of the corporate trustee concluded that the Trust’s disclosure controls and procedures are effective.

     Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Trust’s reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Trust’s reports filed under the Exchange Act is accumulated and communicated to Trust’s management, including the chief financial individual providing accounting services and the trust officer of the corporate trustee, to allow timely decisions regarding required disclosure.

     There were no changes in the Trust’s internal control over financial reporting (as such term is defined in R 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended)during the fiscal period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, the Trust’s control over financial reporting.

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PART II — OTHER INFORMATION

Items 1 through 5, inclusive, are not applicable.

Item 6 Exhibits and Reports on Form 8-K

(a)

Documents Filed As Part of This Report

Exhibit No.		Description
31.1		Certification of the chief financial individual providing accounting services (filed herewith)
31.2		Certification of the trust officer of the corporate trustee (filed herewith)
32.1		Certification of Chief financial individual providing accounting services pursuant to 18 U.S.C. § 1350 (furnished herewith)*
32.2		Certification of trust officer for the corporate trustee pursuant to 18 U.S.C. §1350 (furnished herewith)*

	(b)		Reports on Form 8-K
			None

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.