Michael Jackson Bailout Said to Be Close

Rainlotus

http://www.nytimes.com/2006/04/13/business...artner=homepage Michael Jackson Bailout Said to Be Close By JEFF LEEDS and ANDREW ROSS SORKIN Published: April 13, 2006 Michael Jackson, the onetime pop-music king who has endured a lengthy slide toward insolvency, is close to a deal that would keep him from bankruptcy by refinancing hundreds of millions of dollars in loans, people briefed on the plan said last night. As part of the transaction, he will also agree at some point in the future to give up a part of a prized asset — a song catalog that includes Beatles' hits — to the Sony Corporation, people briefed on the plan said. Mr. Jackson, who spent years racking up debt to underwrite his lifestyle even as his music career faded, has appeared to teeter on the brink of ruin several times in recent years. Last month, he all but closed his sprawling California ranch called Neverland, a move that came after the California authorities threatened to sue over unpaid wages to ranch employees. Mr. Jackson used his stake in the song catalog as part of the collateral for about $270 million in loans from Bank of America. The bank sold the loans last year to Fortress Investment Group, a New York-based investment company that buys distressed debt. The entire catalog, of which Mr. Jackson owns 50 percent, has been valued around $1 billion, the people briefed said. As part of the new agreement, Fortress has agreed to provide a new $300 million loan and reduce the interest payments Mr. Jackson must make. Under the deal he has been negotiating, Mr. Jackson would agree to provide Sony — which is co-owner of the Sony/ATV Music catalog with him — with an option to buy half his stake, or about 25 percent of the catalog, at a set price, according to the people briefed on the deal. Should Sony execute its option on the music catalog, it would ensure that Mr. Jackson was able to pay his debts, these people said. Executives involved in the deal cautioned last night that some details had yet to completed and that the agreement could still collapse. Representatives for Sony and Fortress declined to comment last night. A representative for Mr. Jackson did not return a call. But executives involved in the deal said it came after months of talks that spanned the globe, with meetings from Los Angeles to New York to London to Bahrain, where Mr. Jackson has been living at the hospitality of Sheik Abdullah, the ruler's son. The deal also comes after years of efforts by an eclectic parade of financial advisers including the California billionaire Ronald W. Burkle and the Florida entrepreneur Alvin Malnik to offer Mr. Jackson guidance for extricating himself from his woes. Mr. Jackson's financial managers had been pressing him to shed a part of his stake in the Sony/ATV venture since before he stood trial last year on charges of child molestation. He was acquitted last summer. Many people close to Mr. Jackson have maintained that he could raise money to repay his loans — or at least stay afloat — by touring internationally or working out a series of television and book deals. But the consensus among his advisers was that he would face bankruptcy if he did not refinance. Sony has a longstanding interest in keeping Mr. Jackson solvent. If Fortress had moved to foreclose on Mr. Jackson, he might have been forced into bankruptcy protection, where his stake in the publishing company could be put up for auction. In negotiating the deal, Sony seeks to avoid the prospect that another bidder could gain ownership of the stake, which the company has long hoped to control. Sony has been trying to organize financial partners that could prop up Mr. Jackson's wobbly finances. In the fall, a Sony representative flew to Dubai to meet with Mr. Jackson and an adviser, Gaynell Lenoir, daughter of the late Gerald Lenoir, a lawyer who was a mentor to the lawyer Johnnie Cochran. Originally, they had tried to hammer out a deal in which Citigroup would acquire the loans, and offer Mr. Jackson a more favorable interest rate, around 6 percent, these executives said. Mr. Jackson had been paying more than 20 percent in monthly interest payments. Rather than sell the loans to Citigroup, Fortress agreed to match the bank's terms, the executives said. The various parties had agreed to the deal in principle a few weeks ago, the executives said, but the final pact was held up while the companies involved tried to address questions about potential exposure linked to Mr. Jackson's remaining legal problems. Prescient Capital, a New Jersey company that said it helped Mr. Jackson secure the original financing from Fortress, has sued him for breach of contract, accusing him of failing to pay millions of dollars in fees for providing financial advice. As a result, Mr. Jackson has finally been forced to loosen his grip on one of the richest of song catalogs. He paid $47.5 million in 1985 to acquire the ATV catalog, which had roughly 4,000 songs — among them more than 200 tunes written by members of the Beatles. After 10 months of negotiations with ATV's owner, the Australian tycoon Robert Holmes à Court, Mr. Jackson bested other suitors including the music executives Charles Koppelman and Martin Bandier, the London-based Virgin Records and the real estate entrepreneur Samuel J. Lefrak. In 1995, as he confronted early financial woes, Mr. Jackson struck a deal to merge ATV with Sony's publishing arm. The arrangement also provided Mr. Jackson with a stake in new songs acquired by the venture, like "No Such Thing" by John Mayer. Aside from the Beatles songs, the venture has a vast archive including "Blowin' in the Wind" by Bob Dylan, "Sweet Caroline" by Neil Diamond and "E-Pro" by Beck The catalog also includes the works of songwriters including Stevie Nicks, Sarah McLachlan, Destiny's Child, Garth Brooks and Richie Sambora of Bon Jovi. The venture is also a big force in country music, having acquired the catalog of Roy Acuff and Fred Rose for $157 million in 2002. An archive of songs from the likes of Hank Williams and Roy Orbison is also included.

Rainlotus

This kind of story never stop even for a monment. We'll see then........

debby

帮帮忙翻译一下啊~~~

mojiexue

"onetime pop-music king"... sigh hope can save him from bankruptcy but giving up part of the catalogue? ... let's wait and c~

zuopeiwings

原帖由 debby 于 2006-4-13 20:43 发表 帮帮忙翻译一下啊~~~

Really?

罪恶尼古丁诱惑

原帖由 debby 于 2006/4/13 20:43 发表 帮帮忙翻译一下啊~~~

:wackothis is English Forum:(

Supernannan

Translating¬¬¬¬¬ go to main section later everbody¬

daisy1930

原帖由 Supernannan 于 2006-4-13 23:50 发表 Translating¬¬¬¬¬ go to main section later everbody¬

thank u~

Full WSJ article: Beatles Songs May Help Pay Pop Star's Debts by Kate Kelly Michael Jackson, the debt-laden pop star, could begin to lose his grip on his most prized asset -- his stake in the lucrative music-publishing catalog that includes 251 Beatles songs -- under the terms of a proposed $325 million debt refinancing, according to people familiar with the matter. The performer, whose star has fallen in recent years, is expected to announce as early as today that he has refinanced loan agreements originally valued at a total of about $270 million with the New York hedge fund, Fortress Investment Group LLC, people familiar with the matter say. As part of his new deal, the singer will probably be forced to sell half of his 50% stake in Sony/ATV Music Publishing LLC, which owns and administers copyrights to thousands of songs, to partner Sony Corp. sometime within the next year. Mr. Jackson is expected to use the proceeds to pay back a significant chunk of his debt to Fortress. The deal, which wasn't signed as of yesterday, could still fall apart, these people say. But if finalized, it would be a coup for Sony, where music executives have long hoped to buy out Mr. Jackson's interests in Sony/ATV and own the catalog outright. Mr. Jackson bought the catalog, including the big swath of Beatles tunes, 21 years ago at a price far below its current $1 billion valuation. To this day, it generates revenue for Sony/ATV every time one of its songs is played on the radio. Mr. Jackson, who was acquitted last year of child-molestation charges and has been living in recent months in Bahrain, couldn't be reached to comment. The entertainer's Los Angeles financial adviser, Gaynell Lenoir, described the pending deal as a positive development for the singer. "He's seriously looking at his business affairs, and we're proud of him, really," she said in an interview. "He is vibrant, [and] he is going to resume his career." The proposed new deal, coming nearly a year after Mr. Jackson's trial, during which friends and fans feared for his emotional and financial well-being, may indicate a new chapter in the entertainer's business affairs. It began last year, when Mr. Jackson and his children moved to Bahrain, say Ms. Lenoir and others who have interacted with him recently. There, instead of the changing cast of associates that previously surrounded him, including the Rev. Jesse Jackson, the California supermarket magnate Ron Burkle and his longtime Los Angeles attorney, John Branca, Mr. Jackson has become friendly with the region's elite -- some of whom are now advising him. The pending agreement ends months of jockeying by Mr. Jackson, Sony and Fortress. On the advice of two Bahraini advisors, as well as that of Ms. Lenoir and a Los Angeles lawyer, Frank Correa, Mr. Jackson last year began reviewing his options for a payment that was due Dec. 20, 2005, the associates say. With no new album or tour then in the works and expenses mounting -- including upkeep of his Neverland ranch -- it wasn't clear how he would handle his debt with risking either a bankruptcy filing or the sale of some assets. Some of the parties, including Sony, feared Fortress might try to lay claim to Mr. Jackson's stake in the music catalog. In December, two senior Sony officials flew to Dubai to meet with Mr. Jackson and some of his advisers, say people who were briefed on the meeting. Hoping to restructure the Fortress loan, Sony helped negotiate a loan extension, giving Mr. Jackson until Feb. 18 to meet his obligations, these people say. In exchange for the extension, Fortress collected a $2.7 million fee, or 1% of the original loan's value, as well as a higher interest rate on the debt for a period of time. At Sony's behest, bankers at Citigroup Inc. stepped in with a commitment to refinance what was by then $300 million in debt on more favorable terms to Mr. Jackson and Sony. On Valentine's Day, bankers flew to the U.K. and met with Mr. Jackson at Cliveden House, a luxury hotel outside London where the singer was staying. There Mr. Jackson, clad in a navy-blue suit, told the bankers he was willing to use the music catalog as collateral but wanted to keep Neverland, according to one person who was at the meeting. "That was a turning point," says Mr. Correa, who also was at the meeting. He and Ms. Lenoir, who is his mother, have a consulting firm, Omni Global Inc. They began working for Mr. Jackson last summer. The resulting proposed refinancing, which Citigroup formally presented a few weeks later, relied on Mr. Jackson's 100% stake in Mijac -- the publishing catalog of his own songs -- and his 50% stake in Sony/ATV as collateral, say two people familiar with the matter. It also offered Sony the chance to buy back half of Mr. Jackson's stake at a future date for roughly $200 million and the assumption of some attached debt, one of these people says. Soon after, Fortress exercised a right to match the Citigroup offer, paving the way for a new deal. A Fortress spokeswoman didn't return a call. Spokeswomen for Citigroup and Sony/ATV declined to comment. But obstacles remained, including a claim by Mr. Branca, Mr. Jackson's longtime attorney, on 5% of the Sony/ATV catalog. To satisfy him, Mr. Jackson's associates took out a mortgage on Neverland, people familiar with the matter say, retaining the singer's full ownership of his Sony/ATV stake. Ms. Lenoir referred questions about the matter to Mr. Branca, whose spokesman had no comment.

Supernannan

Press Release Source: Michael Jackson Michael Jackson Restructures His Finances Thursday April 13, 5:01 pm ET MANAMA, Bahrain, April 13 /PRNewswire/ -- Michael Jackson is pleased to announce that he has restructured his finances with the assistance of Sony Corporation of America, the long time co-owner of Sony/ATV Music Publishing LLC. Following negotiations with several leading financial institutions, Mr. Jackson has concluded refinancing with affiliates of Fortress Investment Group, the lender that currently holds secured debts that were previously held by Bank of America. Citigroup structured the transaction for the parties. The terms of this new financing deal will not be disclosed. Mr. Jackson was supported on the refinancing by an advisory team that included Bahrain-based financial advisor Ahmed Al Khan and Qays H. Zubi Attorneys & Legal Consultants. -------------------------------------------------------------------------------- Source: Michael Jackson

MJ: Advisers Made Sure He Wasn’t Dead Friday, April 14, 2006 By Roger Friedman In the middle of the night, two nights ago, Michael Jackson’s valet got a call from his boss’ financial partners in New York. They’d heard rumors, started on Web sites, that Jackson had died overnight in Bahrain. The financiers were just putting the finishing touches on a deal that Michael Jackson was offered and should have signed last year — to sell half his remaining interest in Sony/ATV Music Publishing, pay his debts, and restore some order to his financial house. The new rumor was so upsetting that I am told a Sony Music financial officer spoke to the valet — probably a security guard who travels with Jackson named Kerry — and asked him if it were true. The guard then went into Jackson’s room and woke him up — it was the middle of the night in Bahrain — to make sure he was still alive. Luckily for all of them, Jackson was fine. But the deal, which was only concluded last night around 6 p.m. EST despite Jackson’s team leaking it to The New York Times and Wall Street Journal, was not yet done. Interestingly, it is almost the same deal that Jackson completely rejected a year ago. It turned out he was more comfortable making it with Arab advisers than with trusted old American friends who’d counseled and protected him through numerous self-created scandals. “Michael Jackson doesn’t really pay attention to who he gets in bed with, does he?” said a Jackson insider with a laugh. No kidding. The deal he’s agreed to make — and is still unsigned — was completed by two Arab lawyers in Bahrain and a mother-son team in Los Angeles. The mother is the daughter of Johnnie Cochran’s late mentor. The son is a lawyer who benefits from the mother’s status. The mother, Gaynell Lenoir, is typical of the kind of people who’ve come and gone in Jackson’s business life over the years. Lenoir, who is not an attorney, is the daughter of Gerald Lenoir, the late former partner and mentor of Johnnie Cochran. Her son, Frank Correa, was described yesterday in the Wall Street Journal as an attorney. But there’s no listing for him on the Web site Findlaw.com, and a Sony insider who worked on the Jackson deal says he did not think Correa was a lawyer of any kind. They also claim to have a firm called Omni Global, although there’s no record of any business like that in California. Nevertheless, the pair, who inveigled themselves into Jackson’s business affairs last year, will pick up a fee of around $2 million just for acting as go betweens in the process. The Lenoir-Correa's didn't have to do much except encourage Jackson to accept a deal similar to the one he was offered a year ago. That group included John Branca, the lawyer who structured the Beatles deal in the first place in 1985; Charles Koppelman and Al Malnik, who saved Jackson from the chopping block several times in 2003-2004; and the bankers at Bank of America who tried to help him even as Jackson lied to them and cut deals behind their backs. In this episode I am told that Branca, who had a 5 percent stake in Jackson's music publishing holdings, extended the deal negotiations for two weeks until he was satisfied that he was protected. He got that protection in the form of a $15 million mortgage on Neverland, Jackson's nearly completely closed ranch. But late yesterday, as the deal concluded, Branca's 20-year association with Jackson ended as he was bought out entirely. No numbers are available, but it's likely he walked away with anywhere between $10 and $20 million. But it was Michael Jackson who wasted a year of his life and ours, destroyed many relationships, and caused more than 70 families associated with his Neverland ranch to undergo necessary hardships. Instead, he trusted at various times his children's nanny; his out-of-work brothers, one of whom outed him in an unpublished book proposal; and of course the Nation of Islam. He also wasted about $20 million in interest and legal fees, sources said. The new deal Jackson has struck doesn't entirely solve his problems. Fortress essentially loaned him $300 million so he could pay them back $275 million in loans. That leaves him with $25 million, which he will squander on worthless souvenirs, shopping for trinkets, traveling first class, and plastic surgery. A debt clock will run on interest owed, too, which I bet no one has explained to him. On the upside, Fortress can no longer foreclose on Jackson. Sony — in a wise move that left Fortress powerless — arranged for a panic button, so to speak. The minute Jackson looks like he's in financial trouble again, Sony can assert its right to finalize its purchase of half of Jackson’s share of their partnership. If Jackson's half is really worth $500 million, then he would be due $250 million — less expenses, advances and other monies due to Sony. After taxes he would walk away with perhaps $100 million. And there are still pending lawsuits. Those don't go away. Not only that: Jackson’s ability to judge the characters of potential business associates is so nonexistent that he apparently is doing business with one of his former cronies, the German manager who once owned sex clubs in Hamburg. Is the saga over? Not likely. But the sympathy for Jackson is exhausted, I think. Today he begins with a clean slate. What he does with it is up to him