Rapper Fifty Cent (aka Curtis Jackson III) recently filed a chapter 11 bankruptcy in Connecticut. This is not that unusual, as many celebrities have filed for bankruptcy, including Dionne Warwick, Gary Busey, and Lenny Dykstra. But it is the type of bankruptcy and the reason it was filed that make it interesting.
What Made Him Do It?
The bankruptcy was filed a few days after a jury ordered him to pay $5 million in compensatory damages an invasion-of-privacy lawsuit. On top of that, the jury in the case was scheduled to deliberate on possible punitive damages, but the filing may put the trial on hold.
Thus the bankruptcy stay acted as an effective shield to halt the proceedings, so that he could take a breath and figure out what he was going to do next. The Associated Press quotes his lawyer as saying,
"Mr. Jackson's business interests will continue unaffected in the ordinary course during the pendency of the Chapter 11 case. This filing for personal bankruptcy protection permits Mr. Jackson to continue his involvement with various business interests and continue his work as an entertainer."
50 Cent became famous as a rap artist in 2003 and has since built a business empire beyond entertainment. He invested early in Vitamin Water, expanded into clothing and audio equipment, and has gone on to become an actor in the Starz network action series "Power" and the upcoming boxing movie "Southpaw."
He has been named by Forbes in May as one of hip-hop's five wealthiest artists for 2015. On top of that, he bought his 17-acre home in Connecticut from boxer Mike Tyson for $4.1 million.
The Power of the Bankruptcy "Shield"
Businesses, as well as individuals who have a large amount of debt, can file a chapter 11 to "reorganize" financially, using powerful tools to gain leverage with creditors. Here, Jackson was able to stave off the litigation from getting even worse, forcing the other party to come to bankruptcy court to seek satisfaction on the $5 million judgment and try further to get punitive damages. In the meantime, he can continue to generate income and preserve his assets while he comes up with a plan to deal with it.
But What Does This Mean to You?
So what does this mean to everyone else? It means that when you are hit with a lot of debt, suddenly as with 50 Cent or over time, bankruptcy can help. One of the big advantages of bankruptcy is that it can help people deal with their debt more on their terms, while being able to live their lives free of creditor harassment.
If you live in southern New Jersey and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.
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