Representatives for Michael Jackson were fighting yesterday to prevent his financial world from collapsing after a crucial debt repayment deadline came and went and creditors circled around his most prized assets - including a 50 per cent stake in the Beatles' back catalogue.
Lawyers and Mr Jackson's brother, Randy, have spent the past few days negotiating with the New York-based Fortress Investment Group, which holds the singer's debt, to reschedule repayment for another six months at an interest rate of 9.5 per cent - well above market value. The negotiations have proved prickly because of published reports that Mr Jackson failed to make his monthly interest payment in October.
In other words, Fortress has to decide if it wants to keep profiting from the debt, or if the risk of default is so great it should insist on immediate foreclosure.
The Beatles catalogue, estimated to be worth between $200m (£100m) and $500m on its own, is being held as collateral.
Mr Jackson's lawyers have been keen to play down the gravity of the situation, telling reporters they are confident a rescheduling agreement will be reached this week. "There is no doomsday, or anything like that," one lawyer, Brent Ayscough, told Reuters. "At the moment, people are still talking."
Nothing about Mr Jackson's finances looks particularly rosy, however. He has a mountain of legal debts arising from his heavily publicised child molestation trial, which culminated in an acquittal in June. He is having trouble making the mortgage payments on the Jackson family home in the San Fernando Valley in Los Angeles, and some reporters suggest his mother and siblings may have to move out at the end of the month.
There are constant rumours about financial problems at his Neverland Ranch in the hills north of Santa Barbara, which costs $5m a year to run. Mr Jackson himself, meanwhile, appears to have decamped to Bahrain where he has spent the past several months as a guest of Crown Prince Salman bin Hamad Khalifa. In an attempt to generate some cash in a hurry, he is re-releasing some of the hits from his glory days, starting with "Thriller", which will hit shops in the UK on 23 January. Otherwise, his music career appears to be moribund. He announced to great fanfare after Hurricane Katrina struck the Gulf coast in late August that he was producing a fund-raising charity record, but it has yet to materialise.
Since his acquittal, Mr Jackson has been the subject of many rumours about his financial affairs.
All the indications are that Mr Jackson's finances are deteriorating to a point of breakdown and recrimination. Two of his former employees have filed complaints alleging he owes them millions of dollars. Sony Music appears to be waiting for the right moment to pounce and acquire his half of the Beatles list and his other musical assets - including famous songs by Bob Dylan, Joni Mitchell, Elvis Presley and Sly and the Family Stone - and he has been a party to the debt renegotiation talks.Reuse content