Two Cents on 50 Cent’s Bankruptcy

By Ansley Owens, Contributing Writer and Intern for the NACTT Academy (Nashville, TN)

—-July 13, 2015, 50 Cent (a/k/a Curtis James Jackson III) submitted a petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Connecticut claiming his assets are about $25 million and his debts around $32 million.

Three days prior to the bankruptcy filling, a jury awarded Lastonia Leviston $5 million in a sex tape case against 50 who reportedly put a sexually explicit video of Leviston and her boyfriend online in an attempt to embarrass feuding-rival, rapper Rick Ross. Leviston is the mother to one of Rick Ross’s children.

It is implausible that 50 filed his bankruptcy for any purpose other than to halt the civil trial in New York City. He filed on the day that the punitive damages phase of the trial was to commence, and 50 even told E! News that he was “taking the precautions that any other good businessperson would take in this situation,” and filing bankruptcy “does stop things from moving forward that you don’t want moving forward.”

Arguably, these statements, at face value, are indications of bad faith and an abuse of the judicial process. Bankruptcy petitions to fend off litigation often constitute “cause” for dismissal or conversion under section 1112(b) under the Bankruptcy Code. Further pursuant to section 1129(a)(3), a debtor’s plan must be “proposed in good faith and not by any means forbidden by law.” It is unlikely that 50’s plan will meet this requirement as a debt of $1,737 owed to Curtis J. Jackson Sr., 50’s grandfather, made it on 50’s unsecured debts list.

This is not the first time 50 tried to misuse the judicial system for this sex tape case. On May 26, 2015, a bankruptcy petition was filed on behalf of SMS Promotions, LLC, a company owned by 50. U.S. District Judge Katherine Failla criticized 50 for wrongfully trying to move the sex tape case from New York State court by such means.

The most recent bankruptcy filing also failed to halt the punitive damages claim against 50. U.S. Bankruptcy Court Judge Anne M. Nevins ruled that the case would resume July 20, 2015, to consider the punitive damages despite the bankruptcy filing.

On July 21, 2015, 50 testified that he is not as wealthy as he appears claiming he makes only 10 cents for every record sold. 50 also claimed he either rents or returns the items he flashes to media and social outlets. An additional $2 million was awarded to Leviston in punitive damages despite 50’s testimony.

50 filed a statement of his financials with the bankruptcy court saying he has about $108,000 in monthly expenses. He claimed his grand Connecticut house, purchased from Mike Tyson, with its 21 bedrooms, 24 bathrooms and a nightclub costs him around $72,000 monthly. Gardening alone amounts to $5,000 a month, he says.

Under his support expenses, 50 listed a “grandparent” as receiving $2,500 from him monthly along with the $12,100 he pays in child support.

The filing also shows a loss of more than $10 million in 2013 and 2014 due to SMS Promotions and his G-Unit businesses.

To pay his expenses, 50 claimed he has a monthly income of about $184,000. The statement reveals that $3.3 million comes from his music and about $372,000 from his headphones company (SMS Promotions) so far in 2015. 50 also listed other income from touring, film, merchandising, and other revenues related to his record label G-Unit, totaling around $771,000.

Missing from this statement is 50’s income from TV and film work that he mentioned on the stand July 21. 50 reportedly made $100,000 on “Spy” and “Southpaw.” He also testified that he made $150,000 for his work in the Starz drama “Power” at that time.

During a meeting of creditors, 50 disclosed he is negotiating to lease his home in hopes of reducing monthly expenses and generating some income. We will see whether or not this attempt is successful in late August, when 50’s next bankruptcy hearing is scheduled.

____________________

HeadshotAnsley F. Owens is a contributing writer and intern with the National Association of Chapter Thirteen Trustees Academy in Nashville, Tennessee. Ms. Owens graduated from Middle Tennessee State University with a Bachelor of Science in Public Relations, and expects her Juris Doctor from Belmont University College of Law in May 2016.

While at Belmont University College of Law she serves as a Student Bar Association Senator and the Vice President of the Family Law Society. She is trained in the Harvard Negotiation Model and participates as a member of other law-related student associations. Outside the classroom she interned with MTR Family Law in Nashville, Tennessee, and was a judicial clerk for Judge Lynda Jones in General Sessions Court, Division IX in Nashville, Tennessee.

No Author Biography has been linked to this Article.

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