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.
That wouldn't last him six months!
Lose the entourage, hire a respectable accountant and follow his advise, move into a modest 6 bedroom ranch house in AZ, continue to write music and try to live comfortably on your remaining wealth.
My $0.02
Right there you're already off the track. The article cites "some experts" as the source for that number. Feh. A more realistic number is half that. Furthermore, Jackson only owns half of the rights under a joint venture with Sony. So his real stake is maybe worth $200-$250 million--just about what the loan was. The whole "Michael Jackson owns the Beatles Catalog" thing has always been a bit of a sham.
I'm wondering when the "Reverend" Jackson will come forth and help poor whacko out. Oh wait...... that'll happen when pigs fly.
So MJ owes Bank of America $270M. Sounds like Bank of America is in more trouble than MJ. I wouldn't want to be the guy at B of A who has to explain writing off that "bad debt".
Just like Michael does little boys.
Well, at least the prince can afford to keep him as a house pet.
So9
See, now you're talking sense. We can have none of that.
Jacko Pity Alert!
All proceeds beyond the amount needed to repay the loan, interest, and lenders' legitimate costs associated with collecting, will go to Jackson. Seller may sell the assets at a little less than market, due to having the right to make itself whole reasonably quickly, but there won't be much discount. Plenty of bidders will surface for both these assets, and by selling at unreasonably low prices, the lender would be opening itself up to huge, and likely successful, lawsuits for the difference between sale price and reasonable market price. Jackson will be very rich for a while, but in his condition, it won't take him long to run through the $800 million or so.
Do they think we are suppose to be concerned about Mikey welfare ??
Cause I'm not
Pedophilia aside, I have a hard time working up sympathy for a feller who's down to his last few million bucks. Call me again when he's living in a box.
Oh, dear lord, don't say that!
Do you think we should send them some money?
A fool and his money are soon parted.
As long as he was supporting the family they would not take the chance of trying to help the mentally ill clown at the expense of being lopped off the dole roll. They loved being taken care of more than they loved their brother/son/friend/whatever.
How about this: how about THEY get real jobs and pay for the place THEY live?
Thanks for the ping. Did you happen to hear the news byte from a talking head in which is was reported that he was found in a women's restroom in Bahrain, with full flowing dress and veil?
Nope .. but I would send him a Merry Christmas card
It doesn't work that way. No U.S. court would uphold such a transaction, even if it weren't specifically prohibited in the loan documents, which I guarantee it is. See my post #50. The Fortress Investments folks are not lightweights. You can be sure they bought the loans at a significant discount from BofA, and they already know exactly what their profit will be -- the difference between face value and what they paid for it. Banks don't like to have bad loans on their books for regulatory reasons, and for shareholder image reasons (non-performing or otherwise imparied loans will be shown separately on the bank's publicly available financial statements), so they will often sell them for somewhat less that they could ultimately realize if they held onto them.
[[Michael's life is on the line, physically, and his finances are in ruins because he has listened to the wrong people]]
Michael's life is in ruins because of his obsession with little boys.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.