Rapper 50 Cent, legally known as Curtis James Jackson III, filed for bankruptcy protection in Connecticut on Monday. For a man who two months ago was estimated to have a net worth of $155 million by Forbes, the move is puzzling.
Jackson, who reportedly made as much as $100 million in 2007 from his investment in Vitaminwater after it was purchased by Coca-Cola, produces a show on Starz and has appeared in nearly two dozen films. Just last week, the 40-year-old rapper, producer and actor was profiled in the New York Times as a "renaissance man."
So, is 50 Cent suddenly broke?
Not necessarily. It is rare for individuals to file for Chapter 11 bankruptcy, a measure usually reserved for corporations that need to be restructured. But people looking to reorganize their debts might also use Chapter 11, bankruptcy experts say. For Jackson, the filing might give him more time to pay his debts and give him a chance to come up with a payment plan, an option he might not have without Chapter 11.
"By all accounts, he does not appear to be a celebrity who is in financial distress," says Theodore Connolly, a bankruptcy attorney in Boston and co-author of The Road Out Of Debt: Bankruptcy and Other Solutions to Your Financial Problems.
In the bankruptcy filing, Jackson says that his debts and assets are worth between $10 million and $50 million. So he isn't exactly running out of money. But the move could be an effort to protect his businesses as he deals with his debts.
Jackson's filing comes just days after a jury ordered the rapper to pay $5 million to a Florida woman who sued him for posting a sex tape online without her permission.
The filing could be a strategic effort to stay in control of his assets while he deals with the lawsuit, says Michael Venditto, a bankruptcy attorney and partner at Reed Smith. Because his debts exceed $10 million, according to the filing, Jackson doesn't qualify for Chapter 13 bankruptcy, which would normally be used by individuals looking to restructure their debt.
Filing for bankruptcy might give a person more time to pay judgments like the one that was just handed to Jackson, but it wouldn't necessarily erase the debt, Connolly says. An individual might also file for Chapter 11 bankruptcy to attempt to restructure debts they haven't been able to reorganize another way or to try to break service contracts, he says.
— Washington Post