Tag Archives: Celebrity Bankruptcy

50 Cent’s Bankruptcy By The Numbers As Of January 2016


There has been a lot of mass media attention regarding 50 Cent’s personal Chapter 11 bankruptcy case. First though, a company that 50 Cent owns, SMS Promotions, LLC, also filed for bankruptcy protection under Chapter 11. The mass media is for some reason incapable of understanding that when a corporation or LLC files for bankruptcy protection the individual owners have not filed for bankruptcy. Corporations and limited liability companies are separate legal entities from the owners. That is the whole point in forming the corporation or limited liability company. Unlike Donald Trump, 50 Cent in fact has filed a personal bankruptcy case under Chapter 11, Bankruptcy Case No. 15-21233, in the District of Connecticut, Hartford Division. Donald Trump has NEVER filed for personal bankruptcy protection. Second, as of January 29, 2016, the bank account set up for the bankruptcy case, the debtor-in-possession account, has $7,449,764.30 in cash. So if 50 Cent chooses to pose for a picture with around $50,000 in cash spelling the word broke that would be analogous to me or one of my clients posing for a picture of one dollar bills spelling the work broke. I will say it is a bad look, period.

The following is an analysis of 50 Cent’s disclosed income, expenses, assets and debts based upon court documents filed by 50 Cent’s bankruptcy lawyers and creditors in the bankruptcy case.


In a Chapter 11 bankruptcy reorganization a debtor must commit their monthly disposable income for the benefit of those who are owed money for a term of a minimum of five years. 50 Cent’s current monthly income and future monthly income and expenses are very important then. In Chapter 11 cases the bankruptcy filer is required to file with the bankruptcy court monthly operating reports. The reports provide the income, expenses and assets of the debtor while the bankruptcy case is progressing. These reports help creditors and the United States Trustee determine if reorganization is possible and whether the bankruptcy filer is takings steps to “right the ship” by decreasing or eliminating unnecessary expenses.

50 Cent’s January 2016 operating report provides monthly income from wages of ($1,538.68), royalties ($26,531.06) and other miscellaneous income called other receipts of ($77,000) for a total monthly income of $105,069.74. 50 Cent’s expenses for the month of January 2016 exceeded his income by about $13,000. So arguably 50 Cent does not have any monthly disposable income to pay each month for the benefit of creditors in a Chapter 11 plan of reorganization. That is if Jan. 2016 is representative of 50 Cent’s future income and expenses. 50 Cent’s creditors believe 50 Cent’s income is more and his expenses should be reduced.

On the expense side there are some high numbers as compared to the rest of us who are not on TV or in the movies. 50 Cent lists the following expenses for the month of January 2016:

Mortgage Payments $17,354.44
Real Estate Taxes $8,419.11
Utilities $12,879.73
Insurance $33,215.49
Auto Expense $3,507.59
Lease Payments $5,744.75
Repairs and Maintenance $6,593.70
Fitness Expense $3,000.00
Security $11,369.00

TOTAL EXPENSES: $118,255.81
TOTAL INCOME: $105,069.74

For the month of January 2016 if 50 Cent had not transferred $77,000 in cash from his bank accounts he would not have been able to pay his monthly expenses with his monthly income. So arguably there are some issues with 50 Cent’s ability to reorganize his debts based upon his monthly income. 50 Cent’s creditors argue that 50 Cent is underreporting his income given he has not disclosed income from recent appearances and performances since filing for bankruptcy protection. We shall see.

50 Cent’s ASSETS

In a sophisticated Chapter 11 reorganization like 50 Cent’s there are assets that are extremely difficult to value. How much is a business entity worth? What someone will pay you for it? Or is the book value the proper valuation? 50 Cent owns or allegedly has an interest in over 32 corporations or limited liability companies defined as “Related Entities” by creditors. There are also about 10 businesses defined as “Additional Entities” by creditors. The values of these business interests are extremely difficult to evaluate and 50 Cent’s creditors argue that the values of these entities are more than what was provided/disclosed in 50 Cent’s bankruptcy petition and schedules. As of Jan. 29, 2016, 50 Cent provides his total assets are worth $16,411,498.64.

50 Cent owns three pieces of real property: (1) primary residence located at 30 Poplar Hills Drive Farmington, CT 06032 with an estimated value of $8.25 million and mortgage of about $1 million owed to Suntrust Bank; (2) investment property located at 8 Gale Drive Valley Stream, NY 11581 with an estimate value of $572,000 and no debt; and (3) an investment property located at 3286 Northside Pkwy, Unit 302 Atlanta, GA 30327 with an estimated value of $464,000 and no debt. 50 Cent’s real property is worth about $8,286,000.

50 Cent’s vehicles have a scheduled total value of $500,618.00 and are as follows:

1966 Chevrolet Coupe
2015 Chevrolet Suburban
2010 Rolls Royce Phantom Drophea
2005 Chevrolet Suburban
2008 Dodge Sprinter
2003 Chevrolet Suburban
2012 Suzuki Kizashi Sport

One of the personal assets creditors of 50 Cent point out is missing from the bankruptcy petition and schedules is the trademark “50 Cent” which 50 Cent owns. Creditors argue that the trademark is very valuable and should be listed as a personal asset of 50 Cent.

50 Cent’s DEBTS

As of January 29, 2016, 50 Cent provides his debts total $32,390,319.34. The debt is comprised of $987,070.53 in secured debts, $770,412.00 in unsecured priority debts and $30,390,319.34 in general unsecured debts. The largest debt is a general unsecured debt owed to Sleek Audio, LLC, totaling $18,131,668.65 resulting from a judgment in a lawsuit over the design and sales of headphones. The other largest general unsecured debt is owed to Lastonia Leviston totaling $7,000,000 resulting from a judgment in a lawsuit about the alleged release of narrated sext tape by 50 Cent.

The unsecured priority debts are for domestic support totaling about $856,000 and taxes owed to the Internal Revenue Service totaling $175,067.91 and the State of New York totaling $1,379,687.

Status of the Chapter 11 Bankruptcy Reorganization

Right now both 50 Cent and three creditors, Sleek Audio LLC, Lastonia Leviston and Suntrust Bank, have proposed a Chapter 11 Plan of Reorganization. Of course the creditors plan provides for repayment of all of 50 Cents debts during the plan based upon his current income, assets and future earning potential. I have not yet reviewed the plan filed by 50 Cent and his bankruptcy attorneys.

Detailed Look and Examination of Ex-NFL Football Player Jamal Lewis’ 2012 Bankruptcy Filing – Part II


If you did not know, Mr. Lewis’ bankruptcy case is still an ongoing case. Part I goes through the first part of the bankruptcy case, describing the players and some procedure and addresses arguably why Mr. Lewis’ case was converted to a case under Chapter 7 so soon after originally filing a Chapter 11 reorganization case. Part II begins with describing the various interests of three lesser creditors and what they did to enforce their rights in Mr. Lewis’ bankruptcy case. Keep in mind that as soon as a person or company files for bankruptcy protection the order of relief becomes effective stopping any and all collection activity, lawsuits, wage garnishments, repossessions and foreclosures for example. This is the backbone of every bankruptcy case and the grant of power to the bankruptcy court and judge. The bankruptcy court is the single point of focus for relief if you are owed money or have a claim for money against the bankruptcy filer.

If the case is a reorganization case no more payments are made to vendors, mortgages or vehicle loans without court permission. It is assumed or most likely that secured creditor payments will be made in a plan of reorganization. Reorganizing or changing the payment terms of a mortgage or vehicle loan in Chapter 11 or Chapter 13 is the name of the game and why a person or company can still stay afloat. Bankruptcy is a way to force more favorable repayment terms on secured creditors and get rid of unsecured debts all at the same time.

High Creditor Involvement Means Nothing But Trouble For a Bankruptcy Filer

Mr. Lewis’ bankruptcy case has had quite a few creditors actively involved from the very beginning of the case. That means nothing but trouble for a debtor seeking to reorganize or discharge debts. There are over eleven creditors to be discussed. Here are the first three.

1. Mercedes Benz Financial Services USA, LLC

On May 1, 2012, Mercedes-Benz Financial Services USA, LLC filed a motion for adequate protection. At some point Mr. Lewis financed the purchase of a 2010 Mercedes-Benz CL63 AMG with a balance owed at the time the bankruptcy case was filed of $110,934.41. The monthly payment on the loan is $2,026.35. Mercedes-Benz filed this motion to make sure they get monthly payments from Mr. Lewis while the bankruptcy case progresses. All secured creditors are entitled to be adequately protected against the depreciation of their collateral. Vehicles decrease in value rapidly as time goes on and can be easily hid or moved to thwart repossession. At the time this motion was originally filed Mr. Lewis was still in a Chapter 11 reorganization case. It could have been months before Mercedes-Benz received payment through a confirmed/approved plan of reorganization if they just sat back and waited to see what happened. In the meantime the collateral securing their loan is decreasing in value. So Mercedes-Benz is enforcing its right to be adequately protected against depreciation of the 2010 CL63 AMG by receiving the monthly payment of $2,026.35 from Mr. Lewis. On June 12, 2012, a consent order was signed by the court. Mr. Lewis agreed to pay $2,320.00 to Mercedes-Benz each month. This means that Mr. Lewis intended to keep the 2010 Mercedes-Benz CL63 AMG.

The consent order comes with a catch though. If Mr. Lewis fails to make the adequate protection payment totaling $2,320.00 each month, then Mercedes-Benz is immediately granted the right to repossess the vehicle without further order of the court. A secured creditor cannot repossess its collateral without permission from the bankruptcy court. By filing the motion for adequate protection Mercedes-Benz has killed two birds with one stone. They obtained an order from the court for adequate protection payments and they obtained relief from the automatic stay to repossess the 2010 Mercedes-Benz if Mr. Lewis fails to make the post-petition adequate protection payment totaling $2,320 per month. Mercedes-Benz is set now. They can sit back and collect their money each month until the loan is paid off or repossess the 2010 Benz if Mr. Lewis misses a payment.

2. Porsche Financial Services, Inc.

Unlike Mercedes-Benz, Porsche Financial Services, Inc. finds itself in a different position. Mr. Lewis leased a 2010 Porsche Panamera. Mr. Lewis is not offering Porsche adequate protection payments and Mr. Lewis also has not made a payment on the lease since February 2012. The total owed is $88,788.58 at the time the bankruptcy case was filed. Given these circumstances Porsche filed a motion for relief from stay on May 3, 2012, requesting permission from the court to repossess the 2010 Porsche Panamera immediately. Why bother trying to get adequate protection if the lease is already past due and it appears Mr. Lewis has not intent of continuing to make any more payments. On July 17, 2012, the bankruptcy court entered the order granting Porsche Financial Services, Inc. relief from the automatic stay. They may now repossess the 2010 Porsche Panamera and sell the Porsche at auction to pay off the lease balance.

3. F. Xavier Balderas and Regions Bank

Now this is where it starts to get interesting. F.Xavier Balderas and Regions Bank filed a joint motion for relief from the automatic stay on June 27, 2012. Keep in mind again that Mr. Lewis’ case is still a Chapter 11 reorganization case at this time. Basically F.Xavier and Regions Bank are saying we do not care that you are seeking to reorganize your debts. We believe we have grounds to get the court to allow us to foreclosure or repossess our collateral and continue to go after you despite the fact that you filed for bankruptcy protection.
On or around June 20, 2007 Mr. Lewis obtained a loan totaling $416,000 at 7.15% interest from Am SouthBank, now named Regions Bank. The note was secured by a 2007 Fountain Lighting 47’ recreational boat. This is basically a cigarette racing boat. They have v-shaped hulls, are long and have multiple very powerful (700 HP) engines. Mr. Lewis borrowed additional unsecured sums of money from AmSouth Bank/Regions Bank and then stopped making payments. In 2011 Regions Bank filed a lawsuit against Mr. Lewis in the state of Tennessee to recover the amounts due pursuant to the various unpaid notes by Mr. Lewis. Eventually a judgment was entered against Mr. Lewis totaling $676,299.63. Of this amount about $420,820.00 is secured by the 2007 Fountain Lightning 47.’ Mr. Lewis, on May 17, 2012, testified at the 341 meeting of the creditors that the value of the 2007 Fountain Lighting 47’ was only about $300,000. So, Mr. Lewis is not making any adequate protection payments to Regions Bank (if fact it was so bad they sued him in state court), there is no equity in the boat (the amount owed is far more than the fair market value of the boat) and this is a recreational craft in the purest way and is in no way necessary for anyone to reorganize their debts in a Chapter 11 case. After the filing of Region’s original motion for relief from stay this case was converted to Chapter 7 and a Chapter 7 trustee was appointed to administer the assets of the Mr. Lewis’ bankruptcy estate on August 8, 2012. Under these circumstances the boat is of no value to the bankruptcy estate and creditors given the amount of debt is far more than the value of the boat.

What many people fail to understand or realize is that many people or companies that file for bankruptcy usually keep their cars, houses and even toys like a large recreation boat when seeking bankruptcy protection. If the asset is of no value to the estate (more is owed on the asset then the asset is worth) and the bankruptcy filer can afford to make the secured debt payment each month they usually can keep the asset and continue to make the loan payments. Secured debts get first priority in many ways. In a recent 9th Circuit Court of Appeals case, In re Welsh (No. 12-60009, 9th Circuit, March 25, 2013, regarding secured debts in Chapter 13 reorganizations cases, the 9th Circuit held that Congress did not intend to limit the amount of secured debt a Chapter 13 bankruptcy filer has. So basically a single person can have two car payments, 2 ATV payments and a monthly plane loan payment with no money left over to pay unsecured credit cards and that is okay under the Bankruptcy Code and Section 707(b). Again, the system is geared for the benefit of secured creditors with collateral.

On September 17, 2012, the court signed the order granting Regions Bank full relief from the automatic stay and immediate permission to initiate the foreclosure sale of the 2007 Fountain Lightning 47’. This bank was fighting to be paid since 2011 by first initiating the state court lawsuit. They are owed more than $676,000 and will foreclose on collateral worth approximately $300,000. Regions Bank will be left with an unsecured claim of around $376,000 in Mr. Lewis’ bankruptcy case. What happens to their $676,000 general unsecured claim?

Please note that I have only discussed three creditors so far. Mercedes-Benz, Porsche and F.Xavier Regions Bank were fairly straight forward believe it or not. There are least ten creditors to discuss and things get worse, far worse.