That Michael Jackson‘s finances were a mess was always very well known. What many don’t know is that some of our favorite financial runaway trains were active participants in Jackson’s monetary fantasy world.
The Fortress Investment Group (FIG), which went public in one of the most spectacularly horrible IPOs of all time, was at one point, a lender to the King of Pop with the amusement park/ private estate as collateral.
To which I say, of course Fortress Investments was an “investor” in the Neverland Ranch! How could they not be tangled up in such ludicrousness?
From the New York Times:
In 2003, Fortress Investment, a private equity and hedge fund firm that has since gone public, bought some of Mr. Jackson’s loans from Bank of America after the pop singer missed some payments. Shortly before Christmas in 2005, Fortress threatened to call the loans because of his delinquency, The Times reported.
A few months later, a new deal was reached, as part of a $300 million refinancing structured by Citigroup.
Mr. Jackson’s financial problems continued, however, and in spring of 2008, it looked as if Fortress would foreclose on the Neverland Ranch. But Colony Capital, a private equity firm led by Thomas Barrack, stepped in to buy Mr. Jackson’s loan from Fortress, averting an auction.
Oh wow, we also get Bank of America and Citigroup in the mix? It’s like a who’s who of reckless lenders.
Michael’s single best financial move was the purchase of the Beatles catalog, which is now a joint venture with Sony. Michael had to outbid his then-friend Paul McCartney for the rights to those 259 songs, but if not for that $50 million purchase (now possibly worth $1 billion), Jackson would’ve been in the poorhouse a decade ago.
I guess the upside for Colony and Fortress would have been the possibility of being around during the comeback that never happened.
I wonder what those negotiations must’ve been like…It’s just funny to close your eyes and picture a conference room with the Hedge Fund guys on one side of the table and then Jackson and his deal team on the other (consisting of Bubbles the Chimp, Macauley Culkin, Tito and maybe a plastic surgeon).
Something tells me Jackson’s estate will be mired in controversy and the unraveling process for quite some time.