Bad (debt)

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On one of his sprees, Jackson bought a $4m giant marble chess set from a Las Vegas emporium.

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Jackson’s 2,500-acre Neverland ranch housed a zoo, fairground and minature railway, and cost $5m annually. At one point, the estate had a staff of 150.

Five years later, he paid $8m to his second wife Debbie Rowe, in a divorce settlement that awarded him full custody rights of the couple’s two children. As part of the deal, Rowe secured an annual payment of $750,000. In 2004, the singer handed over $2.4m to the son of a Neverland employee who accused him of abuse. By the time of his heavily publicised 2005 court case on child abuse charges, where Jackson was acquitted of all ten counts, he was reportedly $270m in debt.

In a bid to plug the gap that legal bills had left in his bank balance, he sold Sony a 50 percent stake in ATV for $150m. The joint venture, Sony/ATV Music Publishing, now has an estimated value of $2bn, half of which is held in a trust created by the singer.

Jackson’s empire was in tatters. Strapped for cash, he repeatedly announced memorabilia auctions; but legal wrangling meant they were often cancelled.

From this precarious financial position, he began leveraging his royalties earnings as collateral for loans. The first, from Bank of America, began as a $140m handout but ballooned to $200m. When he defaulted on the loan in 2008, Fortress Investment Group, a specialist in distressed debt, bought the loan from BoA.

For the king of pop, help then came in the form of a real royal; Sheikh Abdulla Bin Hamad Al Khalifa, the second son of the King of Bahrain. In the wake of Jackson’s 2005 trial, he shipped the singer out to Bahrain, forking out millions of dollars to shore up his elaborate lifestyle.

Al Khalifa was keen for Jackson to record his self-penned ditty ‘He who makes the sky grey’, the proceeds of which would go to help victims of the 2004 Boxing Day tsunami.

The friendship eventually turned sour; last year Al Khalifa sued Jackson in a London court for $7m. The lawsuit claimed the star had reneged on a deal to cut a new album, an autobiography and a stage play, after accepting “substantial” advances.

According to the lawsuit, these included $35,000 to pay an outstanding utilities bill at Neverland, $300,000 for a “motivational guru” and $250,000 so that Jackson could “entertain his friends at Christmas”. He also picked up the $2.2m legal bill from the singer’s latest court appearance.

The lawsuit was settled last year for an undisclosed amount. Neither the album nor book were ever produced.

Wealthy benefactors have proved a theme in Jackson’s life. Last year, when the singer defaulted on a $24.5m loan against Neverland, the sprawling ranch was pushed into foreclosure. The star was narrowly saved at the eleventh hour by real estate investment trust Colony Capital.

Headed by billionaire Thomas Barrack, the firm snapped up the debt, bailing out the singer with a joint venture that took ownership of the multimillion-dollar retreat, but left him with a 50 percent share.

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