Ranch Foreclosure Averted by “Jacko”

Posted on May 27th, 2008 by saman

Famed “King of Pop” Michael Jackson said Sunday that he has narrowly avoided a foreclosure auction of his Neverland Ranch this week. After a loan on the famed property was bought by Colony Capital LLC, a major real estate investment firm, the auction – which had been set to happen this week – was cancelled.

Sources say that the loan was in the neighborhood of $23.5 million, and it had previously been held by the Fortress Investment Group. Though certainly no competition of Jackson’s when it comes to headlines and controversy, the New York-based firm has been in the news in recent years multiple times, including when it hired former United States presidential candidate John Edwards as a consultant, and also when Fox News commentator Sean Hannity accused them of being eager to begin foreclosure auctions on homes of those affected by Hurricane Katrina. Had Colony Capital not stepped in to purchase the loan, his 2,700-acre property – located in Santa Barbara County, among the areas hardest-hit by the foreclosure crisis of recent months – would have been placed on foreclosure auction May 14, after the default on loan payments by the legendary entertainer.

Jackson stated via press release that discussions were ongoing between he and the founder of Colony, Tom Barrack Jr., pertaining to the possible foreclosure of his Neverland Ranch, as well as “other matters.” The L.A.-based firm, Colony, was founded in 1991 and has invested over 39 billion dollars since its beginnings. A source who was well-acquainted with the situation said that the company is “very comfortable” with its holding of the loan while payment terms are negotiated.

The opportunity to comment on the matter was decline by Jackson’s and Colony’s representatives, while attempts to reach Fortress representatives for comment regarding the foreclosure issue proved fruitless.

Jackson, arguably the most famed entertainer in the world through the 1980’s, has been faced with many hard times and controversies since then, even before his recent foreclosure crisis. Accusations of child abuse in 1993, and a full-fledged trial on similar accusations in 2005, severely damaged his previous “innocent” and “child-like” image. His increasingly odd appearance — due to allegedly several plastic surgeries — and eccentric behavior have seen the one-time Jackson Five singer fall from his place at the top of the music world, and his infrequent album releases have been increasingly less successful.

His recent foreclosure difficulties have not been the first financial crisis faced by Jackson. The aforementioned 1993 case was settled out of court for a rumored $25 million, and the accompanying negative publicity may have hampered his subsequent career and earning potential as well. The foreclosure issue also threatened Jackson’s legendary music publishing catalogue — rumored to be worth hundreds of millions, if not billions of dollars — which featured, in addition to many other classics, the bulk of the Beatles’ songs. Like the foreclosing of his ranch, the sale of those songs has been averted, but Jackson’s financial future, like that of the nation, remains far from certain.