Judgement Day As Jackson Faces Bankruptcy

Michael Jackson's advisers scrambled to cut a deal yesterday to halt a $272 million foreclosure that would strip the pop star of his share of the Sony Beatles music catalog and, possibly, his cherished Neverland Ranch.

 

As the New York-based Fortress Investments Group prepared to seize the pop star's assets today to cover his unpaid debt, his advisers burned up phone lines pleading for a six-month extension, sources said.

 

"There are discussions underway to stop the foreclosure. An extension is likely to be granted," said a source familiar with Jackson's business woes.

 

The deal would involve "several" benefactors agreeing to make the monthly payments on Jackson's $272 million loan package at a whopping 9.5% interest rate - which comes to more than $2 million a month.

 

If a payment plan can be arranged, Fortress might be willing to hold onto the loans for six more months because the 9.5% rate would beat current stock market returns, the business source said.

 

Spokesmen for Fortress and Sony refused comment yesterday. Jackson attorney John Branca could not be reached for comment. Fortress bought Jackson's loans - one for $200 million, another for $70 million - from the Bank of America last spring after the singer defaulted on the smaller note and revamped his finances.

 

Jackson, 47, had failed to make payments to Fortress and was declared in default in October, the business source said.

 

The loans are secured by Jackson's 50% share of the $1 billion Sony-ATV music catalog, which includes rights to the Beatles tunes, and his 2,700-acre Neverland Ranch.

 

If Fortress forecloses, now or in the future, it can sell Jackson's assets to recover the debt.

 

Many observers think Fortress is likely to sell the music catalog first, which would likely fetch more than the amount Jackson owes. If that happened, Jackson might be able to keep Neverland because his debt to Fortress would be satisfied.

 

"It's all up in the air at this point," said the business source.

 

Jackson, who has been lying low on a visit to Dubai in the United Arab Emirates in recent weeks, has refused to speak to concerned family members who have reached out to him, sources said.

 

"Michael doesn't take their calls. His brother Randy has put together a proposal to resolve the financial mess, but he can't get past the nanny," said a family source.

 

Source: New York Post