50 CENT AVOIDS CREDITORS BY FILING FOR BANKRUPTCY
There’s a growing consensus that business-savvy hip-hop star 50 Cent has filed for bankruptcy protection to shield his assets from circling creditors
Very few people are taking the news that 50 Cent is filing for bankruptcy as a sign that he is broke.
Instead, the talk around town is that the 40-year-old rapper, real name Curtis James Jackson III, is biding his time and giving himself breathing room to negotiate a more affordable payout option.
Leon Bayer, a bankruptcy attorney who spoke to CNBC on Monday, said Chapter 11 bankruptcy cases were filed periodically by celebrities who face large amounts of debt, as a means to curb losses.
“Chapter 11 is the drug of choice for celebrity debt problems. You don’t have to be broke to file for Chapter 11, but it could mean you don’t have a good cash flow,” Bayer was quoted saying.
Documents filed in Connecticut Bankruptcy Court yesterday claim Jackson has assets worth around $50 million (R622 million) and total liabilities adding up to around the same amount.
The amount Jackson has claimed in court is much lower than the $150 million (R1,8 billion) Forbesestimated his net worth to be earlier this year.
Last week, Jackson was ordered to pay $5 million (R62,2 million) to Lastonia Leviston who sued him for adding commentary to a sex tape Leviston had made with her boyfriend. The video was later leaked online.
Jackson is also expected to hear this week whether or not he will have to pay punitive damages in the invasion-of-privacy lawsuit, according to a BBC report.
His lawyer, William A Brewer, said the rapper would be able to continue his business operations uninterrupted.
“The filing allows Mr Jackson to reorganise his financial affairs as he addresses various professional liabilities and takes steps to position the future of his various business interests,” Brewer said in a statement.
“Mr Jackson’s business interests will continue unaffected in the ordinary course during the pendency of the Chapter 11 case. This filing for personal bankruptcy protection permits Mr Jackson to continue his involvement with various business interests and continue his work as an entertainer.”
Chapter 11 is the drug of choice for celebrity debt problems. You don’t have to be broke to file for Chapter 11, but it could mean you don’t have a good cash flow
Leviston’s lawyer, Hunter Shkolnik, told Business Insider that they see Jackson’s filing as “a failed attempt to avoid paying this woman who has been hurt so badly by his actions”.
The 2010 Grammy Award-winner – who has sold more than 30 million albums – has gained a reputation as a savvy businessman with an eye for acquiring and selling off businesses for a massive profit.
He’s had business interests in fashion, an underwear line, drinks, mining and boxing.
One of his most noteworthy deals was his sale of Vitamin Water to Coca-Cola for billions, a transaction that netted him around $100 million (R1,2 billion) personally.
In 2011, he founded headphones company SMS Audio to rival the likes of Dr Dre’s Beats Electronics, which has subsequently been acquired by Apple.
According to CNBC the rapper sold $175 000 (R2,1 million) worth of headphones in nine minutes when he appeared on TV advertising network QVC in 2012, while at the end of last year Jackson closed a $78 million (R971 million) deal to promote men’s underwear line Frigo Revolution Wear.
Bayer says Jackson’s intimate financial details will be laid bare over the next 14 days as he will be required to file his debt repayment plan or “schedules”.
“When he files schedules it’s going to show all the details of his debts, assets, even whether or not he paid his gardener on time,” said Bayer.
Source: CNBC, Business Insider and DESTINYCONNECT