These headphones are part of 50 Cent's money problems
Image Source: Flickr User TigerDirect.com
In a recent celebrity bankruptcy alert, we covered the Chapter 11 business bankruptcy filing of hip hop musician and businessman Curtis Jackson, better known as 50 Cent. The business Chapter 11 bankruptcy filed in late May was mostly due to the struggles of Jackson's boxing business SMS Promotions. You can click here to read the details of the singer's business bankruptcy. The second bankruptcy filing was also a Chapter 11, but this time related to Jackson's personal debts and liabilities.
Why two bankruptcies?
For your average consumer, even one that owned a small business, two bankruptcies would likely not be necessary. But in Jackson's case it makes sense. Because his business was incorporated, and he was the major shareholder, the business bankruptcy allowed him to deal with the debts of the business independent of his personal assets and liabilities. His financial situation may have stayed in good shape with just the business bankruptcy, but recent court battles left him owing two large personal judgments.
Jackson allegedly opted for a personal bankruptcy to buy time to deal with these two large court debts. Jackson said, “It’s a move that’s necessary for me to make at this point so I didn’t allow myself to create that big red/white bullseye on my back when I become the person that people consistently come to.” In essence, he's implying that people are deliberately suing him because he's got the money to pay and that this bankruptcy will let potential lawsuit filers know he's not going to take it lying down.
Is Jackson broke?
Despite filing two bankruptcies between May and July, by all appearances, 50 Cent is not, in fact, broke. Chapter 11 bankruptcies allow consumers who have debts and assets greater than a Chapter 7 or Chapter 13 case allow to get time to reorganize their debts and, in some cases, unload some of them. Jackson's lawyer William A. Brewer III released a statement saying, “This filing for personal bankruptcy protection permits Mr. Jackson to continue his involvement with various business interests and continue his work as an entertainer, while he pursues an orderly reorganization of his financial affairs.”
And since the filing, 50 has gone out of his way to show stacks of cash on social media to his fans plus Forbes had estimated his net worth at $155 million back in 2007. So did Jackson spend all that money - more than a hundred million? Likely not. Fellow rapper and friend of Jackson's Method Man says, “Yeah, he’s being sued by a lot of people and he’s protecting his bank. Ain’t nothin’ wrong with that.” Jackson is reputed to be an astute businessman.
So why the bankruptcy?
For most consumers, a bankruptcy filing is chosen because they're struggling with burdensome debt and need help to get their head above water financially. But in rare cases, like Curtis Jackson's, bankruptcy can be a strategic move. In this instance, Jackson is facing more than $10 million in civil lawsuit verdicts that he's likely trying to avoid, delay or diminish through the bankruptcy filings. The largest judgment is $18.4 million to Sleek Audio - a company that 50 had a deal with to make a headphone line.
According to the lawsuit, Jackson broke a deal with them then began producing his own line of competing headphone products similar to theirs. The court agreed. He also owes $5 million to Lastonia Leviston, an ex of rival rapper Rick Ross, for leaking a personal video of hers online and causing her emotional distress. His other debts include $130k owed on his Bentley lease, $65k in credit cards and $5k to a New York stylist. In all, only the lawsuits seem to be a significant issue.
Are you being sued?
If you are being sued by creditors, bankruptcy can shut down these lawsuits before they get to the judgment stage. And if you already have judgments against you, bankruptcy can get rid of them before they move to the stage of liens on your assets. So long as the debt underlying it is dischargeable, the judgment should be dischargeable as well. If you're struggling with debt and are receiving lawsuit threats, bankruptcy can help. If you live in North Carolina, contact the Law Offices of John T. Orcutt for a free consultation in Raleigh, Greensboro, Fayetteville, Wilson, Garner or Durham. Call +1-919-646-2654 and ask about zero down bankruptcy today.