Michael Jackson has defaulted on a $23 million loan and the holder has put him on notice. Jackson has 90 days to pay the full amount — $23 million plus $212,963.83 in interest — or he will lose his Neverland Ranch.
The papers were filed in Santa Barbara County on Oct. 22, but apparently Jackson’s loan with Fortress Music Trust, doing business as DBCG LLC, a Delaware corporation, expired on Oct. 12. I told you in this space last week Fortress was trying to sell Jackson’s loans and that a desperate refinancing negotiation was taking place. From the looks of this filing, Fortress decided not to wait any longer.
The $20 million loan was secured against the deed of trust for Neverland and is separate from the $300 million loan secured by Jackson’s stake in Sony/ATV Music Publishing.
The papers filed are titled “Notice of Default and Election to Sell.” No amount of wishing by Jackson fans or spin from his much-diminished team can change what they mean. Jackson’s financial house of cards is finally falling in.
The default comes at a time when Jackson is being sued in London for $7 million by his former patron, Prince Abdullah of Bahrain. Jackson’s lawyers recently settled several other lawsuits but have not paid them off. That amount comes in the millions as well. There is some speculation that cash-strapped Jackson could file for bankruptcy in the next 90 days to guard against further disasters.
The beleaguered pop star — who I told you on Thursday recently admitted in sworn testimony to impairment due to prescription drug abuse — is living in Washington, D.C., where he’s renting an expensive home. Meanwhile, his Neverland Ranch stands vacant. The ranch’s value was assessed in 2006 at $17,042,560. The land value was $6,898,858. Overall, the ranch has an improvement value of $11,034,702.
But the ranch is not Jackson’s only piece of highly leveraged property. According to records, the Jackson family home in Encino — which Michael owns — carries a $4 million mortgage. That house, known as Hayvenhurst, has an assessed value of $2.66 million and an improvement value of $2.3 million.
Jackson’s parents are the official tenants of that house, although several of his brothers and sisters and their children have lived there over the years.
In 2006, the state of California threatened to shut down both homes to employees when it turned out Jackson had fallen behind in insurance payments and salaries.
On paper, Jackson still is quite wealthy. His 50 percent interest in Sony/ATV Music Publishing continues to sustain him. That interest may be worth $600 million, as some have calculated. But once the $323 million in loans is subtracted, not to mention all the other settlements, Jackson’s huge tax and legal bills, the situation doesn’t look quite so rosy.
The singer does have an out clause from his last refinancing with Sony and Fortress for a liquidation sale come May 31, 2008.
Will he actually lose Neverland? That’s possible. There’s another lien on the property, thanks to former partner Marc Schaffel. But Jackson’s lawyers at Venable LLC in Washington may convince Fortress to back off or they may find a new white knight in the next three months. Either way, Jackson is in the worst financial situation he’s ever faced.
When we met her in 2000, Alicia Keys was a shy musical prodigy who didn’t like to get too far from her piano when she performed.
Last night at the Hammerstein Ballroom, Keys — now a comely, confidant young woman with several hit records under her belt — debuted her amazing material to a very difficult crowd. The occasion was the fourth annual fundraiser for the charity she adopted, Keep A Child Alive.
The room was filled with celebrities and record execs. Sheryl Crow and Gwen Stefani made guest appearances. Padma Lakshmi created the tasty menu. No less than Bono was the guest of honor, introduced by African supermodel Iman. Green Day’s Billie Joe Armstrong was at Bono’s table. Clive Davis, Bobby Shriver, Gayle King, Petra Nemcova, Russell Simmons and Jeffrey Sachs (of Harvard) were here and there.
Or hear and there. And what they heard may go down in contemporary music history as the night Keys sang a Bono song — “Ms. Sarajevo” — with opera star Kathleen Battle in English and Italian. The performance, I learned, was Keys’ idea as a tribute to Bono and the late Luciano Pavarotti. The two had recorded the song as a duet.
But nothing could prepare the audience for this moment, not even the astounding new songs from Keys’ forthcoming album, “As I Am,” not even Keys and Crow’s sublime take on Bono’s “Sunday Bloody Sunday” or Keys and Stefani on the latter’s hit, “What You Waiting For.”
In fact, by the time Keys got to the Battle duet, she’d performed the Marvin Gaye hit “Inner City Blues,” R&B songs, pop/punk with Stefani and the blues with Crow on “I Shall Believe.”
All of it was revelatory including the six new songs that were so well-received the packed audience was singing along to lyrics they don’t even know to songs they’d never before heard.
And the new material is extraordinary modern R&B glossed with '70s soul, from the single “No One” — No. 1 on the charts — to the driving rocker “Go Head,” the anthemic ballad “Superwoman” and a pair of insanely good singles, “That’s the Thing About Love” and “Like You’ll Never See Me Again,” that should make the new CD a hit for many months.
The latter already is being sent to radio stations as the album’s second single.
Bono did join Keys for the last number of the night, their own duet, “Don’t Give Up (Africa)” in which they were joined by an African children’s choir. But the jubilant night was put over the top by the appearance of Battle, the legendary and often thought difficult diva.
Battle told me later she’d had six days to learn “Ms. Sarajevo,” a haunting mid-tempo ballad. “And then at the last minute, Alicia decided to open it up so we’d trade verses,” she said.
Still, the result was so disarming and captivating that one day it will have to be released in some form. Unlike Pavarotti and Bono, Battle and Keys felt as if they were perfectly blended. Keys’ voice is husky but often finds gorgeous notes. Battle’s voice last night, as always, was crystal perfection. It could not have been a better idea.
Bono, who wrote the song (it’s one of his less well-known gems), gave a typically charismatic speech after Iman’s introduction. “What makes a truly great rock star?” she asked. “You have to have a great heart.”
Bono — after recovering from Iman’s incredibly glamorous visage — thanked family and friends for his honor and talked enthusiastically about the future of Africa. He announced an auction on Feb. 14 in New York at Sotheby’s of works donated by famous artists for his Red campaign that benefits Africa.
He said his wife, Allie, reminded him of the Neil Young song “Like a Hurricane,” which he then clumsily quoted. And he gave several prophesies, the last being, “Tonight, I will drink wine and dance on the tables.”
By the time the audience headed up to the 7th floor for a party thrown by party maven Amy Sacco, Bono was doing just that. And he had Keys and friends to party with. They deserved a good time.
Jerry Seinfeld jumpstarted his excellent “Bee Movie” last night with a premiere at AMC Lincoln Square for kids and their parents. There was face-painting, finger food and black-and-yellow bee antennae to get in the mood.
Before the movie started, with co-stars Matthew Broderick, Chris Rock and Renee Zellweger in attendance, Seinfeld did a little stand-up for the audience just to warm ‘em up. Needless to say, it was about nothing and very funny.
"This is absolutely one of the most exciting moments in my little human existence,” he said. “I really do feel like Dorothy at the Emerald City after a long, long trek on the Yellow Brick Road,” he continued and then went on a “Wizard and the Oz” riff that was just right for the mixed-age crowd.
“Finally I got to the Emerald City and I asked to meet Jeffrey Katzenberg. I’d heard a lot of things about him, that he was a scary guy, but he was really quite lovable.”
Seinfeld also thanked wife, Jessica, who’s having a rough time in the press right now concerning her cookbook. Who was she in the Wizard of Oz metaphor?
“She’s home,” Jerry said in an unusually sentimental moment, provoking aahs from the audience.
“Bee Movie” should be a big hit this weekend, and deservedly so. But if you’re near them, check out a clutch of good films opening, too, including “Before the Devil Knows You’re Dead,” “Lars and the Real Girl” and the Audience Prize winner from the 2006 Toronto Film Festival, “Bella.”
The latter finally is getting a release; don’t miss it…Fans of “Guiding Light” and “As the World Turns” will spot, respectively, Tammy Blanchard and Ewa da Cruz. And ladies will not want to miss Mexican heartthrob Eduardo Verastegui in the lead role…
…pop icon Neil Sedaka gets an all-star tribute Friday night at Lincoln Center celebrating his 50th year in show biz. The show starts at 8 p.m., with guests including another legend, Dion. Regis Philbin will be there, too. Neil is not but should be in the Rock and Roll Hall of Fame. His absence is one reason we are still boycotting Jann Wenner’s Rolling Stone magazine until this and many other oversights are corrected…