“Startin’ to feel like there’s nothin’ left to talk about but the, money, money
Bill collectors keep comin’ . . . to get money, money”
-Curtis James Jackson, III – “Money”
On this summer Friday, this blogger would like to take a moment to reflect on the flexibility of chapter 11. Chapter 11 isn’t all about billion-dollar corporate debtors. It’s available to help out the little guy too (assuming you have a large amount of debt and/or complex finances)! From the likes of DMX to Anna Nicole Smith, celebrity bankruptcies are big news, and sometimes they result in significant changes in the law (see also Arkison, Wellness, and our other posts on the Stern Files). Though there have not been any legal fireworks yet, we here at the Weil Bankruptcy Blog have been entertaining ourselves by following the latest celebrity bankruptcy: that of rapper Fifty Cent.
As has been widely reported, on July 13, 2015, rapper Curtis James Jackson, III, better known by his stage name Fifty Cent, filed for chapter 11 protection in the United States Bankruptcy Court for the District of Connecticut. “Fifty,” whose hit albums Get Rich or Die Tryin, The Massacre, and Curtis have sold millions of copies, stated that the primary reason for his filing was his inability to satisfy two large court judgments. The first is a $7 million judgment owed to Lastonia Leviston because of a sex tape featuring Ms. Leviston that Mr. Jackson allegedly released to embarrass rival rapper Rick Ross. The second payment Fifty claims that he is unable to afford is an $18 million judgment related to a failed headphones venture with a company called Sleek Audio. In addition to the approximately $25 million in legal liabilities, Mr. Jackson also claims another $7 million in liabilities related to everything from maintaining his 21-bedroom home to leasing luxury cars. Based on disclosures about Fifty’s assets, liabilities, and financial condition made earlier this week, it also sounds as if Fifty has been doing a bit of “window shopping” – to the tune of $3,000 a month on clothes and $1,000 a month on personal grooming.
On Wednesday, Fifty had to answer (at least) 21 questions at his initial meeting of creditors. According toThe Wall Street Journal, even the U.S. Trustee was getting in on the rap jokes. Abigail Hausberg, the U.S. Trustee’s representative, is quoted as saying that the “gist” of the meeting was Fifty essentially saying “you can’t get a dollar out of me.” One of the biggest questions left unanswered: what happened to Mr. Jackson’s earnings from Coca-Cola’s 2007 purchase of Glaceau Vitaminwater for $4.1 billion. Mr. Jackson, an early investor in Vitaminwater, reportedly earned up to $100 million from the sale, though his lawyers claim that the real number is lower. (The exact number has yet to be disclosed).