Jackson Nears Financial Ruin

By

Published December 16, 2005

| FoxNews.com

Michael Jackson | Yoko Ono | Ten Best Films | Weekend Notes

Jacko: Financial Wipeout Imminent

Michael Jackson is in his 11th hour of financial peril.

On Tuesday, Dec. 20, he will be declared officially in default by Fortress Investment Group on loans of $270 million. Jackson, knowing this day has been drawing near for the last year, has done nothing whatsoever to ameliorate the situation, sources tell me.

On the 20th, Fortress will have the ability to foreclose on the loans and take possession of Jackson's half-interest in the $1 billion Sony/ATV Music Publishing company, as well as the entire MiJac Music Publishing company.

Fortress also holds an $18 million lien on the Neverland Valley Ranch.

That lien, concerning what's about to happen to Neverland, is significant.

Sources there tell me that the biweekly payroll, due last Thursday, was missed entirely. As of yesterday, the 100 or so employees at the Los Olivos, Calif., ranch were seven days past due on their two-week paychecks and a week into the next one.

I am also told that the situation at Neverland is dire. While Jackson is in Bahrain with his kids and their nanny, some of the electricity at the ranch was recently shut off by Pacific Gas and Electric.

Also, there are real fears now for the animals in Jackson's home zoo. Last week, the ranch was down to almost no food for the animals. At the last minute, sources say, a delivery was made, but it won't last long.

Fortress, which owned by New Yorker Peter Briger, is a specialty firm that buys debt. On Tuesday it will have two immediate options. One would be to exercise a "put" built into the loan agreement by which it could foreclose on Jackson and ask Sony to purchase the loans outright.

The second option, and the one Fortress will likely choose, is to foreclose and inform Jackson it will sell his assets at market prices.

If Jackson's half of Sony/ATV is really worth $500 million, as estimated in the past, Fortress could clear $300 million on the $200 million secured by the Sony catalogue. The MiJac-backed loan, which comes to $70 million including Neverland, would be sold separately.

Unclear in all this is how Jackson's minor partner, John Branca, his sometime attorney, would fare.

Branca — who was the architect of Jackson's Beatles purchase in the 1980s — has a 5 percent stake in the Sony catalog. Experts tell me that his percentage is tied to Jackson's, whatever happens.

The interesting thing here is that Jackson has known for a long time that this day was coming. He's been warned about it by his closest advisers and family members, and if he chose to, he could have read it about in a number of places, including this column.

But insiders tell me Jackson has not done anything to contact or work with Fortress. He's simply opted to ignore the situation, sources say, rather than face reality.

Last April he was offered a chance to sell half of his interest in the Sony catalogue, which would have freed up enough cash to pay all his bills and debts. That deal would have left him with a 25 percent interest in Sony/ATV Music Publishing as well.

But Jackson never answered that offer because he'd become paranoid, as usual, that somehow he was being ripped off. The deal, in fact, had been constructed by bankers at Goldman Sachs with two of his advisers, Alvin Malnik and Charles Koppelman.

The Fortress loans were purchased by Briger last May from Bank of America, which had maintained them and refinanced them for several years under the guidance of Jane Heller, a personal banker with BofA.

But Heller acquiesced to Fortress' offer after Jackson, refusing to acknowledge his dire situation, allowed grocery chain magnate Ron Burkle and the Rev. Jesse Jackson to go over Heller's head to the head of Bank of America.

Their calls were rebuffed, and Heller — now embarrassed and feeling slighted — gave up trying to help Jackson out of his self-created mess.

And there's more, including shocking revelations about how much Jackson understood from sitting in court and listening to five months of testimony about his own business earlier this year.

Next week, as we head toward the breaking point in what has been a very weird year in the final chapter of Jackson's career, I will tell you more about that.

For now, though, Jackson has one working day left — Monday — to contact Fortress and make arrangements to repay his loans.

John Lennon: Yoko's Cash-In Continues

All right, this is for hard even for yours truly to believe, but here goes.

It looks as if Yoko Ono has licensed a John Lennon action figure that will be sold, I don't know, in stores of some kind. Parts of it may be referred to as the Plastic Lennon Hand (get it, Plastic Ono Band?)

Ono is clearly out to prove that there's nothing you can sell that can't be sold.

Yes, it's been only a week since the 25th anniversary of Lennon's murder. I did in fact write a hopeful piece about Ono last week. All I was saying was, give peace a chance.

But there's no limit to bad taste, and here we go again. You can actually see this thing at http://necaonline.com/lennonnews1.html.

National Entertainment Collectibles Association is the company with the license, and they've got a picture of the 18-inch plastic Lennon. They say it will talk, speaking "John Lennon" phrases. They also say it will be known as "The New York Years" Lennon.

NECA says this is the first ever licensed Lennon figure ever. That's quite a distinction. There is a line of "Yellow Submarine" pose-able figures, but those are of Lennon and the other Beatles in character from the animated film. This is actually one of Lennon, with all profits going to Ono.

So the question is: How much money does this woman need?

And, a better question, whatever happened to her Spirit Foundation? There's no listing for it among U.S. charities at www.guidestar.org. And last, what will the plastic Lennon say when you push his buttons? "Ah! Bowakawa, pousse, pousse"?

Bleh!

The Ten Best Films of 2005

1. "Munich" — Steven Spielberg's second big picture of 2005, but the most important one. Is there enough time to absorb this before the year is up? I hope so. It's not quiet, but it is emotional. And Spielberg's eye for detail has never been better. Eric Bana makes a superb hero, easy to follow as he is drawn by loyalty to God and country into a thankless assassination plot. Universal seems almost to be hiding "Munich" rather than courting an audience. This is a big mistake. Spielberg has merely reported history, not distorted it, with a deft eye.

2. "Match Point" — Woody Allen is back. "Match Point" should be at the top of every list this year. A well-wrought thriller with a lot of Woody's little Allenisms dropped in, this is a winner from beginning to end. Scarlett Johannson and Emily Mortimer are standouts in a thrilling screenplay that is as knowing about the British class system as Woody used to be about New York's Upper East and West sides. It's nice to see Woody's come home at last. I just hope the old fans will respond positively. "Match Point" is worth waiting in line for.

3. "Capote" — The perfect movie of 2005, with award-winning performances by Philip Seymour Hoffman, Catherine Keener and Clifton Collins Jr. Two childhood buddies — Bennett Miller and Dan Futterman — directed and wrote, respectively, the story of Capote's writing "In Cold Blood" as if they'd been making films all their lives. Hard to believe the former was an actor on "Judging Amy," but there you go. Who knows what's next? An orderly from "E.R." could get a Pulitzer at this rate!

4. "Walk the Line" — I do love this movie and Joaquin Phoenix's performance as Johnny Cash. Phoenix — Hoffman's only real rival for Best Actor — gets it right, making Cash a three-dimensional figure and not just turning in a celebrity imitation. Reese Witherspoon, who I ordinarily find grating, does her best work here, wiping away the frivolity of "Legally Blonde." James Mangold — whose credits include "Heavy," "Cop Land," and "Girl Interrupted" — now rises in the ranks of accomplished directors. In the end, though, the music speaks for itself. Johnny and June Carter Cash must be smiling down from heaven.

5. "Transamerica" — Felicity Huffman probably dreaded agreeing to do a series like "Desperate Housewives." After all, she's a "real" actress straight out of David Mamet plays. When she won the Emmy, it seemed obvious that her next movie would put her over the top. Her performance as a pre-op transsexual is mesmerizing. She's got the Best Actress thing locked, which isn't easy in a year of Judi Dench, Diane Keaton, Charlize Theron and Witherspoon.

6. "Good Night and Good Luck" — With reservations, I have to say "GN, GL" is an admirable piece. David Straitharn will get an Oscar nom as Edward R. Murrow. The whole thing looks and plays right, with nice stuff from the underrated Jeff Daniels and the always appreciated Patricia Clarkson. Hesitation comes from the fact that the film turns on well-known newsreel footage of Sen. Joseph McCarthy being dressed down at last by colleague. But you can never see that too many times.

7. "A History of Violence" — Usually creepy David Cronenberg goes film noir and makes a movie that looks and feels like the best of the mid-1950s — a sort of updated "Cape Fear." Viggo Mortensen is spectacular in a Richard Widmark-like role; he should be rewarded over and over. His square-jawed, bright-eyed presence is walks a fine line between potential psycho and likeable townie. Maria Bello, William Hurt and Ed Harris are all excellent. Howard Shore's music is a perfect underscore. A little gem that deserves to be taken seriously.

8. "Broken Flowers" — Focus Features has done a good job ignoring this brilliant Jim Jarmusch film so they could give us gay cowboys mumbling and tumbling together in "Brokeback Mountain." I do think that Bill Murray's sublime performance in "Broken Flowers" is going to outlast "Bill and Ted's Excellent Romance," and that video viewers are going to wonder why Murray, director Jarmusch, supporting actor Jeffrey Wright and a trio of Murray's ex-flames — in cameo — Sharon Stone, Jessica Lange and Frances Conroy — weren't shown more respect.

9. "Murderball" — Almost no one went to see this documentary when it came out, although the critics told you to. Paraplegics and amputees don't make for romantic moviegoing. "Murderball" in concept sounds scary and off-putting, but it's so uplifting that after a few minutes you just don't see the infirmities of these amazing athletes as they head toward the Paralympics. They are simply transcendent. This is one is a winner, as are all the people who made it including directors Henry Rubin and David Shapiro. Kudos to ThinkFilm for putting this out and staying behind it.

10. The Sundance movies — My favorite films from Sundance this year were Craig Brewer's "Hustle & Flow," Mike Mills' "Thumbsucker," and Miranda Joy's "Me and You and Everyone We Know." The former has made a star out of Terrence Howard, an actor we're going to be seeing a lot of from now on. "Hustle & Flow" wasn't perfect, but its various elements made it real and appealing at the same time. Brewer is already on to his second film; we can expect big things from him.

The other two Sundance movies were far different from Hustle & Flow. "Thumbsucker" was based on Walter Kirn's novel about a teenager who wouldn't grow up. Loaded with cameo performances — including a very good one by Keanu Reeves — I thought this film would gain a cult following. Lou Pucci, a seemingly wise-beyond-his-years 19-year-old, was totally captivating as the central character.

Miranda Joy (nee Grossinger) made the lightest soufflé of the year, even though "Me and You and Everyone We Know" contained some disturbingly offbeat moments. Just when you though she might veer into a saccharine area, Miranda Joy figuratively poisoned our drinks. "Me and You" is at the same time ingratiating and worrying. I loved it, and can't wait to have it on DVD.

Weekend Notes

Here are a couple of Chrismukah gift ideas and plugs from around town: I keep running into lots of famous New York actors and TV personalities at Greenwich Village Framing, between 11th and 12th Streets. The manager, Sinan, says if I report the names, they won't come back. But the gallery carries the best selection of lithographs, prints and art photos below 14th St., which is what has caused the commotion.

Legendary Dick Sequerra — one of the founders of Marantz a million years ago — is still selling his custom-made stereo speakers at www.sequerra.com. They are reasonably priced and far superior to anything you can buy in a stereo store at the same price.

URL

http://www.foxnews.com/story/2005/12/16/jackson-nears-financial-ruin