Rapper 50 Cent filed for bankruptcy on Monday.
This comes as a bit of a surprise since the New York Times just described him as a man of “exceptional business instincts” less than a week ago. Forbes pegged his net worth at $US155 million in May.
50 Cent, also known as Curtis Jackson III, reportedly earned $US60-$US100 million from a stake in Vitamin Water when it sold to Coca-Cola in 2007, according to the Washington Post.
Yet, in the abbreviated Chapter 11 filing Monday, Jackson’s lawyers said that his assets range from $US10 million to $US50 million, including cash. The same goes for his liabilities.
What could be going on here?
The lawyers for a woman who just won a lawsuit against Jackson believe he’s trying to protect himself from paying their client.
Lastonia Leviston is due $US5 million as a result of a sex tape Jackson posted in 2009 as part of an attempt to stir the pot with rival rapper Rick Ross.
Hunter Shkolnik, Leviston’s lawyer, told Business Insider, “We think this is a failed attempt to avoid paying this woman who has been hurt so badly by his actions.”
Here’s the backstory: Ross and Leviston had a child together in 2003. In 2008, Leviston was recorded having sex with her boyfriend at the time (who was not Ross). That boyfriend gave Jackson a copy of that sex tape, according to the AP.
Jackson posted the tape online to humiliate Ross. But, he didn’t simply post the tape. He added his own commentary while wearing a wig. Jackson called himself “Pimpin’ Curly” and recorded a demeaning, vulgar voice over for the tape, according to The Daily News. (We haven’t watched the video.)
It ended up humiliating Leviston. The AP, citing news reports, says Leviston testified in court, “This was something done to me. I didn’t have a choice. I would never, ever do this to myself.”
Leviston won a $US5 million judgement against Jackson for that tape three days ago. She could earn more from punitive damages, says the AP.
So what does this have to do with Jackson’s bankruptcy?
One source familiar with the matter speculated that the move Monday is an attempt to wrangle better settlement terms from Leviston. Our source speculated that this could be a way to get Leviston to accept a discounted settlement.
And the source said it is possible that Jackson — if he can in fact prove that he is bankrupt — could reduce damages he owes after he lost lost a $US17 million lawsuit in Florida with headphones manufacturer in the wake of a botched business partnership.
The same source pointed out that other attempts similar to Jackson’s move have failed celebrities. O.J. Simpson was still held in prison but could not duck legal liabilities to Nicole Brown Simpson’s survivors even after his bankruptcy filing, for example.
If the celebrity committed an intentional act (such as releasing the sex tape) and is responsible for damages, those cannot be discharged via bankruptcy. (That may not extend to the $US17 million lawsuit he lost to the headphones company, however.)
Jackson filed for bankruptcy protection Monday morning in Connecticut and over the next 30-45 days, it is expected that court-ordered sealed documents regarding his finances will come to light.
“This filing for personal bankruptcy 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,” Jackson’s attorney William A. Brewer III said in a statement. The firm did not provide further comment.
Even if Jackson has assets in excess of his liabilities, it doesn’t mean he has enough cash to pay off the sex tape lawsuit immediately, legal experts say.
The Chapter 11 filing could allow him to buy some time. He will be paying off what he owes in payment installations rather than in one lump sum if the bankruptcy move proves successful in court. A legal source said that under Connecticut law, where he filed, Jackson’s bankruptcy filing will be treated like a corporation and not an individual.
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