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.

Related Articles

February 10, 2019
Rebecca Rogers Garcia was a staff attorney for Mary B. Grossman, the Chapter 13 Trustee in Milwaukee from 2002 until November 2014. Prior to her employment with the Chapter 13 Trustee; she represented debtors in consumer cases. Ms. Garcia is on the board of the Bankruptcy, Insolvency and Creditors Rights Section of the State Bar of Wisconsin and a member...
Merideth Akers
November 6, 2022
“Does wearing these horizontal stripes make me look fat?” My wife, Becky, tells me that clothes with horizontal stripes make one look broad or fat. However, wearing clothes with vertical stripes create the illusion of making one look tall or slim. Smart fashion designers design clothing that creates the illusion that people are something they are not. I must confess...
October 24, 2021
By Henry E. Hildebrand, III, Chapter 13 Standing Trustee (Nashville, TN) Chapter 13 debtor cannot submit missed payments to the trustee after the 60-month term of the plan has ended in an effort to cure defaults in the plan. (Bacharach) Kinney v. HSBC Bank USA, N.A., 5 F.4th 1136 (10th Cir. July 23, 2021) Case Summary Margaret Kinney filed a...
Members
January 3, 2021
By Mark C. Leffler, Boleman Law Firm, PC (Richmond, Hampton, and Va. Beach, VA) Part I: Derby v. Portfolio Recovery Associates Recently, Hon. Keith L. Phillips of the Eastern District of Virginia Bankruptcy Court issued his fourth and final written opinion in the Derby v. Portfolio Recovery Associates adversary proceeding, Adv. Pro. No. 18-03097-KLP, 2020 Bankr. LEXIS 2589 (Bankr. E.D.Va....
Members
samantharuben
May 14, 2023
(Reprinted with permission.  Bankruptcy Court Liaison Committee Newsletter – Spring 2023 (Northern District of Illinois)) During her tenure as a bankruptcy judge for nearly 24 years, Judge Carol A. Doyle has presided over countless chapter 7, 11, and 13 cases, leaving a lasting impact on the Chicago bankruptcy landscape.  She has been a dedicated and respected member of the bankruptcy...
October 13, 2019
By Lawrence R. Ahern, III, Brown & Ahern (Nashville, TN) Click here for Part I, Introduction to the 2019 Legislation Click here for Part II, Five Things a Trustee Should Know About SBRA Part III The Small Business Reorganization Act of 2019 (SBRA)1 is of interest to attorneys whose clients in troubled . . . It looks like you are...
Members
August 11, 2019
By John P. Gustafson, United States Bankruptcy Judge, Northern District of Ohio, Western Division Click here for Part 1 Click here for Part 2
Members
August 4, 2019
By John P. Gustafson, United States Bankruptcy Judge, Northern District of Ohio, Western Division Click here for Part 1 Click here for Part 2
Members
M Joseph Photo 2-1-22
February 6, 2022
Bankruptcy Code Section 521(e)(2)(A)(i) and (ii) provides that a debtor must supply tax returns to the trustee in a chapter 7 or 13 case, and to a creditor who timely requests such copy. Must the debtor provide copies that contain personal identifying information such as names, addresses and social security numbers of dependents including minor children? Or a redacted version...
Members
M Joseph Photo 2-1-22
May 8, 2022
Faced with abusive and serial bankruptcy cases,courts have fashioned various sanctions to put a stop to gaming the system. The favored sanction of the majority of courts is to enter an order of dismissal with prejudice under Section 349(a) of the Bankruptcy Code that adds a condition prohibiting refiling another bankruptcy case for a set period of time. See Lundin...
Members