Michael Jackson Private Equity

Michael Jackson's Dealings with Private Equity Firms

When looking through the news today, I was surprised to see the headline, "The Pop Star and the Private Equity Firms" in the New York Times. While the passing of the pop legend is a loss to the music world, it is also a financial loss for a couple private equity firms.

Michael Jackson was of course known for his eccentricities and he is also known to have spent large chunks of his fortune on such extravagances as the star's private amusement park Neverland Ranch and "computerized Marvel comic-book characters bigger than life." These types of expenses added to the debt Jackson amassed over the years. Neverland Ranch would have been foreclosed, had a private equity group not stepped in to purchase the debt.

In 2003, the private equity firm Fortress Investment purchased some of Michael Jackson's loans that he had borrowed from Bank of America and which he had been failing to repay. However, Fortress had similar problems with Mr. Jackson and in the winter of 2005 the firm threatened to call the loans because of his delinquency. Despite a restructuring of his finances settling the dispute with Fortress, Jackson's financial troubles persisted and it seemed that Fortress would foreclose on Neverland Ranch. Luckily, Colony Capital, another private equity firm, decided to purchase the loan from Fortress. This action prevented an auction of Michael Jackson's property.

Up until the end of his life, Michael Jackson continued to accumulate millions of dollars in debt. Although Neverland Ranch is a valuable piece of real estate that has shifted hands as a result of his financial troubles, Jackson's greatest wealth--and therefore his best collateral--is his stake in Sony/ATV Music Publishing. He owned a massive portfolio of thousands of songs, including more than 200 by Beatles Paul McCartney and John Lennon.

Full NYT article

Tags: michael jackson neverland ranch, michael jackson investments, michael jackson foreclosure, michael jackson colony capital, michael jackson fortress

Link to This Resource: Michael Jackson Private Equity

http://privateequityblogger.com/2009/06/michael-jackson-private-equity.html