50 Cent’s legal team will head back to bankruptcy court in Hartford, Connecticut on Friday morning to square off with lawyers representing Lastonia Leviston.
Leviston is the woman who won a $US5 million suit against the rapper in the wake of a sex tape scandal. Between what 50 Cent owes Leviston and a separate party after losing a lawsuit to a headphones manufacturer, the famous rapper lost more than $US20 million in lawsuits in less than a year.
But one legal expert thinks that 50 Cent’s situation could get even worse in court.
50 filed for Chapter 11 bankruptcy on July 13, which is more similar to a corporation’s bankruptcy than a typical individual’s proceeding. If a motion is filed to force his case to file Chapter 7 bankruptcy instead, the famous rapper might all of a sudden find himself losing everything.
If 50 Cent’s bankruptcy case is changed from a Chapter 11 filing to a Chapter 7 filing, it means a court-appointed trustee would take control of his assets and begin liquidating them.
“This is where filing Chapter 11 could backfire on him,” says Timothy Walsh, a partner at law firm McDermott Will & Emery in New York.
This would just be the beginning of the beleaguered rapper’s woes. 50 Cent would also have to forfeit a portion of royalties he’s due from films, albums and video games in which he’s appeared. Property and cars could be seized and auctioned off to immediately pay the people he owes.
50 Cent has already declared bankruptcy, but legal sources say the rapper is likely insolvent and not broke. This means his liabilities exceed his ability to pay them back, at least right now.
In an interview following his bankruptcy filing, 50 said the move was to take “precautions that any good businessperson would take.”
A lawyer who spoke under the condition of anonymity said 50 Cent may have enough assets to pay back the people he owes about $US22 million after losing two big lawsuits in less than a year’s time.
If that’s the case, it is likely the rapper will be permitted by a judge to resolve his debts via a Chapter 11 bankruptcy filing. This will give him time to sell assets and line up payments to his creditors.
Once 50 Cent’s financial statements are brought to light, it could have a big impact for the people who have won legal judgments against him. They would be unsecured creditors, which puts them at the back of the line to get repayment. If 50 Cent has other outstanding bills those would take priority over the lawsuits. This includes mortgage payments and auto loans.
At this point, it’s not clear what Leviston’s lawyers will propose to get their client the $US5 million judgment she’s due. But 50’s troubles could begin to get deeper, as early as tomorrow morning. So far, 50 Cent’s finances haven’t been revealed in court. They’re currently subject to a court-ordered seal.
No matter what happens next, it’s a long fall from grace for the rapper who has thoroughly chronicled his conspicuous consumption through social media like Instagram.
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