Michael Jackson's Debt | Jackson's Goose | Mariah Carey
Jacko Shocked by Sale of Loans
Michael Jackson was reportedly shocked Wednesday when he received word that Bank of America had sold him out.
I can tell you exclusively that Bank of America has sold Jackson's $270 million in loans to a private hedge fund. The group is called Fortress Investments, located in Manhattan.
Their principals are Peter L. Briger Jr., formerly with Goldman Sachs, plus Wesley R. Edens, Robert I. Kauffman, Randal A. Nardone and Michael E. Novogratz — all with substantial backgrounds in finance.
The firm's specialty, according to its Web site, is rescuing "undervalued, orphaned and distressed investments throughout the United States, Western Europe and Japan."
With this sale, Fortress now stands to become a 50 percent owner in Sony/ATV Music Publishing if Jackson should default on the loan.
Technically, he is already in default. Furthermore, Jackson's deal with Sony comes to an end this December, at which time the company can buy him out for $200 million if he can't come up with a new buyer or enough money to pay back the loan.
The Fortress deal is also rumored to include a $70 million loan Jackson has against his own publishing catalog, called MiJac.
Jackson was apparently shocked, according to sources, when he got word about the sale on Wednesday morning from Bank of America.
He had previously rejected a deal that would have netted him money, cleared his debt and left him in good shape with people who were longtime friends. But now he's in business with strangers.
Still in the equation, however, is grocery king Ron Burkle. He sent a letter to Bank of America several days ago saying that he needed 90 days to help Jackson refinance.
Burkle could still be Jackson's white knight and bail him out from Fortress, but so far he's done nothing.
In the meantime, Jackson remains cash-poor as he continues to stand trial for child molestation here in Santa Maria.
Michael Cooks His Own Goose
Michael Jackson has no one to blame but himself for what's happened to him now.
He can't say record producer Tommy Mottola is a racist or that producer Charles Koppelman is out to get him. He's cooked his own goose, with all the trimmings.
Jackson was severely taken aback to discover yesterday morning that Bank of America had sold his $270 million debt to a group of private investors.
But why was he surprised at all? In the last few weeks, Jackson has done nothing but spit in the faces of the people who have kept him solvent for the last 20 years.
First there was his private banker at Bank of America, Jane Heller. Heller came with Jackson's loan from NationsBank when it was merged into Bank of America. But the fact is, Heller has kept Jackson in carnival makeup and llama food for the two last decades.
Then there's Al Malnik and Koppelman. They're not the Red Cross; they're savvy businessmen. But they worked hard for Jackson over the last three years to help get his house in order and off the auction block. Jackson was frequent guest at Malnik's Miami manse, bringing with him kids, nannies, etc.
In 2003, Malnik told Jackson that he should downsize his life, take stock and stop inviting children into his bed, before the current scandal broke in the fall of 2003. Jackson froze him out and the two have not talked since then.
Jackson also long ago stopped speaking to Koppelman and to his longtime attorney John Branca — two more advisers who kept him afloat. Instead, Jackson turned to a succession of con artists and hustlers who promised him the moon but simply mooned him.
There was also the brief infatuation with the Nation of Islam and the ill-fated association with Shmuley Boteach. To this day no one knows where the money went from the Feb. 14, 2001, Carnegie Hall charity event hosted by Boteach and Jackson "for children."
But the one thing Jackson had with Heller, Malnik, Koppelman and Branca — besides a history — was affection. They cared about him even when he didn't care about them. They protected him, too.
But last month Jackson refused a deal they offered that would have bailed him out of debt. He didn't like it because he thought they would get something out of it.
In his characteristic sneaky manner, he turned to grocery king Rob Burkle of Yucaipa Companies to save the day.
Malnik, properly insulted, quit. The bank, which considered Malnik their only link to reality, obviously had had enough.
Who knows what the moneymen that bought out Jackson's debt have in mind for the loan.
One thing is for sure: The hedge fund's major principle, Peter L. Briger, doesn't know the former King of Pop and probably doesn't want to.
Briger will function very well as a stranger to Jackson, dispassionate and businesslike as the clock counts down to December 20: the day when Jackson will have to either put up or shut for good.
One thing's for sure: He will get exactly what he deserves.
Mariah Stays Afloat; 'Sahara' Sinks
You've got to hand it to Mariah Carey.
Her album "The Emancipation of Mimi" is her second comeback CD. But this one really has worked.
Carey stays at No. 2 this week, racking up another 200,000 copies to bring her total to almost a million. Not only that, but she has plenty of singles left. "Mimi" should stay afloat well into the fall.
Paramount's "Sahara," starring Matthew McConaughey and Penelope Cruz, is starting to slow down at the box office. That's not good.
The movie's total worldwide take is $76 million, about half what it cost to make. There are roughly three weeks left until "Star Wars" and other summer movies drive it out of theaters. The push is on to try and save "Sahara" from turning to dust.
Condolences to the family of William Bell, the great soap-opera legend. Bell created the classic "The Young and the Restless" and its weird knockoff "The Bold and the Beautiful."
Before that, he was well-known as a soap writer on "Days of Our Lives," back when it was watchable. He will really be missed as this genre continues to fade.