50 Cent Filed for Bankruptcy, But Is He Really Broke?

In a surprising move, Curtis Jackson—the man we all know as rapper 50 Cent—filed for bankruptcy on July 13, 2015. The news came as a surprise, but if you followed the news regarding his situation in the last few months then it should not be unexpected.

Why it’s a surprise that 50 Cent filed for bankruptcy?

To explain, 50 Cent’s filing for bankruptcy came as a surprise because just this May, he was ranked fourth in the list of wealthiest hip-hop artists by Forbes. According to Forbes, 50 Cent’s estimated net worth is at $155 million. To go from one of the wealthiest hip-hop artists in the world in May to a bankrupt rapper in July is a shocking and quick turn of events. As the kids say these days, that escalated quickly.

But if you have been following the news lately, you will find that 50 Cent’s bankruptcy filing came in the heels of a New York State court ruling against 50 Cent. The court has awarded $5 million to Lastonia Leviston plus punitive damages that have yet to be decided.

According to the lawsuit, 50 Cent released a sex video featuring Leviston and her then boyfriend, who was also the one who handed 50 Cent the said video. 50 Cent edited himself into the video as a crude commentator named Pimpin’ Curly making jokes and curiously made taunts against rival Rick Ross, who is considered a rival of some sorts to 50 Cent. Ross has a daughter with Leviston.

While he claimed that the person who handed the video to him said that it was ok to release the video online, Leviston’s side argued that she did not have a choice and would never ever do this to herself. The court sided with Leviston, thus the $5 million and damages ordered to be paid to her by 50 Cent.

So what has this got to do with his bankruptcy filing?

Everything. If you would notice, he filed for Chapter 11 and not the more common Chapter 7 and Chapter 13 bankruptcy. Chapter 11 is usually used by businesses to reorganize their debts while continuing operations of their business, which is in line with what 50 Cent’s representatives are telling the press about how filing for bankruptcy protections allows him to continue his business endeavors and his work as an entertainer, while he pursues and reorganizes his financial affairs.

What Chapter 11 does for a debtor is that it allows him to propose a debt repayment plan that will detail how much he will be able to pay and how he will be paying those debts. Of course, these would have to be approved by his creditors.

The key here is that the debtor will be able to pay the debts through his current assets and his generated income moving forward. Meanwhile, he gets the protection from creditors who would have to leave him alone. And after he has made payments according to the repayment plan, remaining debts will be discharged except for taxes, student loans, child alimony, and criminal fines.

While this means that the $5 million to be paid to Levinston will probably not be eliminated, he may make a move to have case moved to bankruptcy court from the state court where he can argue that with little assets, punitive damages should not be as big. If he does not do that, that $5 million may turn to $10 or $15 million instead.

While all these are, of course, speculation, it is looking more like 50 Cent is more likely be looking to pay less than actually broke.

No matter your financial situation, Van Horn Law Group can provide you with the legal advice you need to help you get your head above water.