50 Cent (Curtis Jackson III) Bankruptcy

After Forbes estimated rap superstar and purported business mogul Curtis Jackson III, known by his stage name as 50 Cent, to have a net worth of $150 million only two months ago, 50 Cent filed Chapter 11 bankruptcy in July 2015 after a jury rendered a $5,000,000 verdict against him, personally. Despite 50 Cent testifying under oath that he has received at least a quarter billion dollars, his bankruptcy filing (see here) only claims assets between 10 to 50 million.

However, 50 Cent’s list of creditors (see here) contains liabilities of approximately $28,431,418.50. Accordingly, it’s likely that 50 Cent’s assets are actually around the 28 million mark rather than the 50 million mark. An additional $2,000,000 judgment was rendered against 50 Cent for punitive damages, bringing his total liabilities up to $30,431,000.

There is a lot of speculation as to whether 50 cent is really bankrupt given his perceived high net worth, business acumen, and opulent life style. Many people believe that the bankruptcy filing is nothing but a sham or a move to evade creditors. The procedural background of the state court case contains numerous instances of 50 Cent’s attorneys using the Rules of Federal Procedure to hinder, impede, and delay the state jury trial that just recently concluded–so much so that a Federal Court issued a scathing ruling against 50 Cent’s attorneys (see here) with a threat to find them in contempt of court due to their alleged abuse of the Federal removal statute.

Abusing the bankruptcy code is much more serious than leveraging rules of federal civil procedure to delay a state court case. Abuse or misuse of the bankruptcy code for illegitimate needs or gains by filing inaccurate statements of financial affairs would be a felony, punishable by up to 5 years in prison and a $500,000 fine. Any benefit that 50 Cent would have received by filing bankruptcy (mainly a freeze of the civil jury trial that was pending and the subsequent release of the jury that ultimately rendered the 7 figure verdict against him) was vitiated by the bankruptcy court emergency order that permitted the state court jury trial to proceed despite the freeze that takes effect when a bankruptcy is filed.

50 Cent’s creditor filed a motion to proceed in the State Court (see here), which the bankruptcy court granted, which resumed the state court trial. Since the state court trial was green-lighted, 50 Cent has filed a document with the court listing his multiple business entities (see here); and requested additional time to list his assets and file a statement of his financial affairs.

In conclusion, while many people are in disbelief that a man reportedly worth 150 million dollars only two months ago is now filing for bankruptcy, the evidence and filings paint the picture of a man who is not as affluent as once believed, nor perceived. Any abuse of the bankruptcy code to evade creditors would only cause more problems and legal issues for Mr. Jackson moving forward, including possible jail time. The bankruptcy code has numerous mechanisms in place that can be used to uncover when an individual is lying about his or her solvency, and 50 Cent’s attorneys are no doubt aware of the tools available to unravel perjured testimony. It seems unlikely that any attorney representing Mr. Jackson would put 50 Cent in such a precarious position if bankruptcy was not absolutely necessary in order to maintain his financial affairs. The next step in the process is to see the content of Mr. Jackson’s list of assets and statement of financial affairs, which will be filed sometime in August 2015. Based on the filings so far, I would be surprised if his assets exceed $32 million. While $32 million is a lot of money, its not much when you consider he has earned at least $250 million throughout his career.