Posted on 12/08/2005 8:44:58 AM PST by COUNTrecount
LOS ANGELES - Michael Jackson faces a crushing $270 million foreclosure in two weeks that could mean he loses his Neverland Ranch and Sony Beatles music catalog, the Daily News has learned. And as the fallen star's financial D-day, Dec. 20, looms, he is "isolated and intoxicated" on prescription pills in Bahrain while frantic family members rush to plan a rescue mission to the Middle Eastern nation, sources said yesterday.
"It's a meltdown - Michael's life is on the line, physically, and his finances are in ruins because he has listened to the wrong people," said one source familiar with Jackson's business woes.
His family, especially brother Randy and sister Janet, are frantic. "Janet thinks he needs 12 months of rehab. ...Randy wants to get Michael out of the clutches of handlers who don't have his best interests at heart," alleged the business source.
"All of the chickens have come home to roost. Michael will be homeless - a houseguest of the prince [of Bahrain]," said a family source familiar with the crisis.
Jackson's three kids and nanny Grace Rwaramba are with him, guests of the royal family. "Grace has been calling the shots. She has made it difficult for the family to communicate with Michael," said the business source.
The heavily mortgaged and leveraged pop star's financial woes heated up last spring while he was on trial for child molestation, according to the business source.
At the time, Jackson owed $270 million to Bank of America (two loans, one for $70 million and another for $200 million.), the source said. The debt was secured by the singer's Neverland Ranch and his share of the SONY/ATV music catalog, which some experts think may be worth $1 billion or more.
In April, Jackson defaulted on the smaller loan, triggering a total revamp of his finances, the source said. In May, Fortress Investments bought Jackson's $270 million loan package from the bank and tried to work out a payment plan with the pop star, who was acquitted of all criminal charges last June.
But Jackson failed to make his payments and defaulted in October, according to the source. Now, Dec. 20 looms as the foreclosure date and sources say Jackson has no way of paying off the massive note. That means Fortress will have to sell off his assets to recoup their $270 million, the source said.
In addition, Jackson has failed to make payments on a $2.2 million second mortgage he took out on the family's Hayvenhurst mansion in Encino, Calif., and his kin expect to get the boot in the new year.
Jackson bought the home for his family in the 1970s, and his mom, Katherine, brothers Randy and Jermaine, Jermaine's ex-wife Alejandra and several of Randy and Jermaine's kids now live there. Dad Joe is said to spend little time there.
"They are making plans to move. This is the home where Katherine raised her children and now she has to leave," said the source. Fortunately, Janet Jackson bought her 75-year-old mom a house in Las Vegas, so she won't be homeless.
I think that Sony (which co-owns the rights under a joint venture with Jackson) has the right to match any offer.
Life is so unfair. (sniffle)
Rwaramba ping! I have no idea how to begin pronouncing that.
Once Tooky fries next Tuesday, all his fans now sending big checks to San Quentin (you bet they are!) can start sending them to another neverland instead!
Let's see.
He owes 270 million.
The Beatles catalog is worth (according to the article) as much a billion dollars.
I know I took the old math in school, but doesn't MJ have a pretty easy way out?
The state of California has been trying to offer him a more permanent residence for many years. Quarters are a bit cramped, but the (formerly) rich white woman would get "three hots and a cot."
I don't know how either, but this is how they sing it in China:
etc, etcPara bailar la bamba Para bailar la bamba Se necesita una poca de gracia...
I tried it, but it sounded like I was about to spit out a mouthful of sludge!
First, the value of the asset, say $1 billion, will be sharply discounted, by at least 15%, because another party owns the other 50%. IOW, there is no clear controll...it is "encumbered" and therefore worth less..
Next..it is believed that MJ has fradulently pledged the asset, and/or the stream of income from the asset, to cover other loans..
But the big problem for MJ is the tax consequences..when he aquired the asset it was for about $200 mill..so on his now 50% residual piece, he's looking at a capital gain of between $300 -$400 mill..A forclosure sale is still a sale, and the tax bill ..say $150 mill between the US and California..will be due, and the IRS and Cal will file liens on the transfer..MJ won't get a thin dime...
Yeah..I'm all broken up. ;)
How can someone, even a stupid someone, lose billions probably? Some things in life I will never understand.
Seriously, I wouldn't be at all surprised if we hear that Jackson has become a Muslim.
He won't sell it. The bank will eventually foreclose and we'll all go to court.
..His creditors will have a hard time collecting now....
They can forclose on the assets pledged.
He probably has other hidden assets offshore where the family can't get at them. He has to stay in the bunker thill the forclosure is over.
Then he can molest little boys legally.
Huuummmm... a lesson for GW and the congress?
Damn those tax-cutting Republicans!
"...he has listened to the wrong people"
"he's in "the clutches of handlers"
"Grace [nanny] has been calling the shots"
"Jackson defaulted on the smaller {$70 million] loan"
"Jackson has failed to make his payment [$200 million loan] and defaulted in October"
"Jackson has failed to make payments on a $2.2 million 2nd mortgage"
Is this middle-aged "man" incapable of thinking for himself? Does he not know that he MUST pay bills or else...?
What goes around comes around. Amen.
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