Michael Jackson, the King of Pop who amassed a half-billion-dollar fortune over the past 20 years, is saddled with debt and teetering near bankruptcy, his former financial advisers say in a lawsuit.
The lawsuit, set for trial June 18, claims Jackson’s extravagant spending has created “a ticking financial time bomb waiting to explode at any moment.”
Union Finance and Investment Corp. of South Korea filed the lawsuit in Los Angeles County Superior Court, claiming Jackson owes the firm $12 million in fees and expenses, plus interest. Jackson previously paid the firm $3 million, the firm said. The lawsuit also seeks punitive damages.
Brian Oxman, a Jackson family attorney, said he does not believe the 44-year-old singer is near bankruptcy.
“I see no signs of this impending disaster,” Oxman said. “I cannot say it for 100 percent sure because nobody knows his financial statements. But I can say it for a reasonable certainty.”
Oxman also said that Union Finance has been paid for its work.
The lawsuit was filed in April 2002 by Union Finance, described as one of South Korea’s leading financial advisory firms. Jackson hired Union Finance in 1998 to help straighten out his finances, according to the lawsuit.
“When they were retained, plaintiffs believed that Jackson was incredibly wealthy,” the lawsuit states. “At the time plaintiffs agreed to work for Jackson, there was no clue that Jackson’s extravagant lifestyle had all but bankrupted him.”
The firm said it soon discovered that Jackson had only two months’ worth of available funds.
Union Finance’s lawyer said that he stands by the allegations in the year-old lawsuit and that he took Jackson’s deposition last week in Beverly Hills.
“For whatever reason, Michael Jackson is not paying his debts,” said Pierce O’Donnell, a leading entertainment finance lawyer. “He has little or no means of income. He lives off a line of credit.”
He added: “The day of reckoning is near.”
Forbes magazine last year estimated that Jackson was earning $50 million a year at the height of his popularity in the 1980s and ’90s and had amassed $500 million over his career. Forbes estimated Jackson has $200 million in debts but a net worth of $350 million.
Jackson’s 1982 album “Thriller,” which has sold 26 million copies, is second behind the Eagles’ first greatest hits album in all-time sales in the United States. But sales of recent Jackson albums have sagged.
Jackson’s assets include his Neverland ranch in the hills above Santa Barbara and homes in Southern California and Las Vegas. Most of Jackson’s assets are in musical holdings worth an estimated $450 million, including 200 Beatles titles and songs recorded by Elvis Presley, Forbes reported.
He is a voracious spender. In 2002, he racked up a $100,000 hotel bill on a brief trip to New York, according to Forbes.
Union Finance said it helped Jackson obtain $200 million in loans through Bank of America between 1998 and 2000. In his deposition last week, Jackson said he didn’t know how much he owed on the loans, O’Donnell said.