Since my April 15th blog post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), has made it past the disclosure statement approval phase of his bankruptcy case, and is running towards the plan confirmation finish line.

finish line sign

The confirmation hearing is scheduled for July 6th.  At that hearing, the Court will decide whether Jackson’s proposed plan of reorganization can be approved based on the ballots cast by creditors and the provisions of Section 1129 of Title 11.

vote

If you are one of Jackson’s creditors, keep a close watch on your mail box for the third amended disclosure statement, plan, notice of deadlines, and ballot!  Remember, if you don’t object and/or vote by June 27, 2016, you lose your right to complain later.

pig on top

The Debtors will include a list of executory contracts and cure amounts with service of the plan documents, but will not disclose which executory contracts are being assumed or rejected until June 17th.  Parties to contracts, when considering whether to vote in favor of the proposed reorganization plan, should assume their contract or lease is being rejected.

50 Cent

The Court thanked all the parties for their professionalism, actively participating in the case, and working to come to a compromise – making Jackson’s reorganization possible.  For more details about Jackson’s disclosure statement hearing, check out Law 360’s article – 50 Cent’s $23.4M Bankruptcy Exhibit Gets Initial Approval.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

$100 piggy

Since my April 8th blog post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), filed his proposed First Amended Plan and Disclosure Statement.  The deadline for creditors and parties-in-interest to object to Jackson’s Disclosure Statement is April 27th, followed by a May 18th hearing on approval.

Jackson’s Plan proposes to allow Sleek Audio, LLC’s, Suntrust Bank’s, and Lastonia Leviston’s unsecured claims in the amounts of $17,320.67, $3,890,000.00 and $6,000,000.00, respectively.  He will be contributing up to $23.4 million in cash over the proposed plan of 5 or less years, and will also contribute up to 70% of the net proceeds from his currently pending malpractice claim.  Jackson estimates that general unsecured creditors will receive between 74% and 92% of their allowed claims and each holder of an allowed unsecured claim under $10,000.00 will be paid in full.

What is a disclosure statement? 

A disclosure statement is a document that a Chapter 11 debtor or plan proponent files with the Court in conjunction with his proposed plan of reorganization (or liquidation).  The disclosure statement must provide “adequate information” to allow creditors to make an informed decision about whether to accept or reject the proposed plan.

The Court has broad discretion to determine whether the disclosure statement provides adequate information and that decision is often made based on the nature, history, and complexity of the finances of the Chapter 11 debtor.  Generally, a disclosure statement includes information about the debtor’s financial history, circumstances that resulted in the bankruptcy filing, description and value of the debtor’s assets and the amount and nature of his debts, description of his plan of reorganization and repayment to creditors as compared to a Chapter 7 liquidation.

Why would someone object to a disclosure statement?

Creditors and parties in interest may file an objection on the basis that the plan does not provide sufficient information or analysis which would allow the them to make a decision whether to vote for or against the proposed plan.  They may also object to statements in the plan they believe are incorrect.  Courts have denied approval of disclosure statements where statements contained there in were unsupported by factual information such that creditors were unable to independently evaluate the merits of the plan.

As to Jackson’s amended disclosure statement, upon a quick review, it appears to be quite comprehensive.  Moreover, since he has come to an agreement with his largest unsecured creditors, he may not receive any objections unless the U.S. Trustee’s office or perhaps a secured creditor takes issue with his disclosures.  Jackson is closer to the finish line and his happy ending.  More to report after April 27th!


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

Since my March 28th post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), filed his sixteen-page, Court ordered explanation (“Disclosure”)  regarding the differences between his original Schedules and Statement of Financial Affairs (“SOFA”) and his subsequent amendments.

Transparent pigIn the Disclosure his attorneys state that “the true benchmark is whether the debtor’s intent to be transparent with creditors, responsive to their requests for information and willing to produce documents and information necessary to address concerns.  Here, the debtor has overwhelmingly met his obligations in good faith.”

The majority of Jackson’s explanation appears to be based on the complexity his numerous business ventures and his (or his professionals) initial uncertainty over the ownership of certain property (including the Georgia condominium and all the automobiles), the value of his businesses, and the existence or status of numerous contracts by Jackson and his businesses.

According to the Disclosure the Georgia condominium was not owned by Jackson individually, but rather, by “3286 Northside Parkway, Unit 302, LLC,” a limited liability company wholly owned by Jackson.  All of the automobiles original listed on the Schedules were not owned by Jackson individually but rather, by “In the Passing Lane, LLC,” also wholly owned by Jackson.  The only vehicle that Jackson appears to own individually is a 2012 Bentley Mulsanne.

Jackson’s Amended Disclosure Statement and Plan, which outline his agreement with his largest creditors for payment of their claims, are due Monday.   I’ll share more news on Jackson’s proposed happy ending next week.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

cash pig

As a follow up to my Monday post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), filed a Motion to Extend Time to File Amended Disclosure Statement and to File Objections Regarding Amended Disclosure Statement (“Extension Motion”) yesterday.  Accordingly, it looks like we may have a short delay finding out about Jackson’s proposed happy ending – until April 11th.  More news to follow after Jackson files his amended Plan and Disclosure Statements.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

sunglass piggy

Since my February post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), objected to the appointment of an examiner, along with Sleek Audio, LLC, Suntrust Bank and Lastonia Leviston (“Largest Creditors”) and filed his own disclosure statement and plan of reorganization.   According to representations made by Jackson’s counsel at the hearing, Jackson has reached an agreement with the Largest Creditors for payment of their claims and Jackson will be amending his plan to conform to that agreement on or before April 4th.

50 cent pig

As you may recall, the U.S. Trustee’s office filed a motion for appointment of an examiner (“Examiner Motion”) on the basis that Jackson’s social media posts directly conflict with disclosures made in his court filings.  According to the U.S. Trustee’s office Jackson’s social media posts suggested he had retained material amounts of cash while at the same claiming an ongoing inability to satisfy the claims of creditors.

cash pig

Prior to the hearing, and as outlined in a recent article by the New York Times, Jackson filed response and affidavit stating, in a nutshell, that he his posts suggesting he had retained material amounts of cash were staged pictures of prop cash rather than the real thing and that he and that he has never owned any property in Africa.

Jackson appeared at the March 9, 2016 hearing on the Examiner Motion, but from the recording, did not speak a word.  His counsel and counsel for the U.S. Trustee’s office presented arguments to the bankruptcy court for and against appointment of an examiner and the bankruptcy court has taken that matter under advisement.  A status conference on any amended disclosure statement is scheduled for April 6th.

camp fire

My August 2015 post asked should – Will Jackson and the creditors be holding hands and singing “Kumbaya” over a consensual Chapter 11 Plan in 90-120 days?  120 days have come and gone since then, but the next 120 days appear to hold great promise for tough guy rapper “Fiddy”.    In 50 Cent’s own words “Sunny days wouldn’t be special, if it weren’t for rain.”  50 Cent, “Many Men (Wish Death),” Get Rich or Die Tryin’, 2003.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

 

Since my January post, Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), has objected to the proposed plan and disclosure statement by his largest unsecured creditors Sleek Audio, LLC, Suntrust Bank and Lastonia Leviston (the “Proponents”) on the basis that it would subject to a “near indefinite period of involuntary indentured servitude during which he will be required to work solely for the benefit of creditors” and provides “little, if any, of the information necessary for creditors to make an informed decision regarding the Plan.”  However, at a hearing before the Bankruptcy Court last week, the Proponents and the Debtor’s counsel announced that they hope to have a consensual disclosure statement and plan filed prior to March 17th.

Despite representations that the Proponents and Jackson may come to an agreement, the Court and the U.S. Trustee’s office are concerned about allegations by the Proponents of lack of transparency and non-disclosure by Jackson.  Jackson made several social media posts after his bankruptcy filing which suggest he has retained material amounts of cash while at the same claiming an ongoing inability to satisfy the claims of creditors.  These posts were brought to the attention of the Court by the Proponents, as outlined in a recent article by the Palm Beach Post.

black eye pig

Jackson’s counsel has attempted to downplay his social media posts as mere efforts to maintain his brand and image, but neither the Court or the U.S. Trustee’s office are satisfied by counsel’s explanation.  The Court stated that there is a purpose in the bankruptcy process being transparent and part of that purpose is to inspire confidence that it is process where “an honest but unfortunate debtor can come into court and seek relief either through getting a fresh start and a discharge or through having a breathing spell in order to reorganize his affairs and when that process becomes public, the need for transparency is even higher.”   Accordingly, the Court has ordered that Jackson appear before the Court to answer for his media posts and allegations of non-disclosure.

The U.S. Trustee’s office has also filed a motion for appointment of an examiner (“Examiner Motion”) on the basis that Jackson’s social media posts directly conflict with disclosures made in his court filings.  Specifically, the U.S. Trustee’s office stated in its Examiner Motion that Jackson’s social media posts “whether true or not – are, at a minimum, openly contemptuous of the Bankruptcy Code and process and, if true, are potential evidence of serious misconduct.”  If an examiner is appointed, he will be charged with conducting an investigation of the Debtor’s assets, post-petition income and post-petition expenses including identification of post-petition income from all sources, use of that income, accounting accuracy in court filings and whether the Debtor is fulfilling his fiduciary duties as a debtor-in-possession.  The Court has scheduled a hearing on the Examiner Motion for March 9, 2016.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

 

Locked up Pig

In my August post, I stated that it was too early to tell whether Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), would be able to come to a consensual Chapter 11 plan for repayment with creditors.  Jackson has not yet filed his own proposed plan of reorganization.  However, it now appears that his largest unsecured creditors Sleek Audio, LLC, Suntrust Bank and Lastonia Leviston (holding $29 million in unsecured claims) have formed an alliance (the “Proponents”) and late last week filed a joint proposed plan of reorganization (“Creditor Plan”) that may ultimately decide Jackson’s financial fate.

According to court filings, Jackson is not a proponent of the Creditor Plan and was not consulted about its terms or conditions.  Whether the Creditor Plan will become a consensual Chapter 11 plan of repayment may be revealed at the February 18, 2016 hearing on approval of the Disclosure Statement for the Creditor Plan.

The Proponents suggest in their court filings that Jackson has not fully disclosed or been forthcoming about his financial affairs, including assets, debts, businesses and income.  Proponents also reference pictures posted on instagram (10/14; 10/14; 11/26; 11/7; 12/3) by the Debtor which suggest he has retained material amounts of cash while at the same claiming an ongoing inability to satisfy the claims of creditors or propose a repayment plan.

Accordingly, the Creditor Plan provides that all income of Jackson from any source whatsoever be turned over to Trustee, Richard M. Coan, of New Haven Connecticut, for distribution under the Creditor Plan.  Proponents propose that the Trustee take charge of all Jackson’s property, engage in a supervisory role with respect to all Jackson’s business dealings and that Jackson be prohibited from engaging in any further business activities without the Trustee’s review, consent and approval.  The Trustee would further liquidate property and distribute the proceeds in a “waterfall” created under the Creditor Plan.  The Proponents believe the likely outcome of the Creditor Plan would be payment of 100% of claims to creditors, with interest.

It is doubtful that Jackson will consent to the Creditor Plan with the provisions outlined above, but unfortunately for Jackson, his consent is not required for approval of a proposed plan by the Bankruptcy Court.  However, as one of my learned colleagues commented…could Jackson object that these proposed Creditor Plan provisions essentially force him into indentured servitude?…there are cases that prohibit that.


 

Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

Gator Apple has not filed its bankruptcy Schedules and Statement of Financial Affairs yet but they are due to be filed by October 5th absent an extension from the Court.  In the meantime, the Debtor filed a Chapter 11 Case Management Summary [Docket Entry 7] (“CMS”) which provides some additional information.  According to the CMS, Gator Apple was a business that owned several Applebees Restaurants in Florida and Georgia which were sold in 2013.  The CMS further provides that Gator Apple filed chapter 11 to “reorganize and clear debt,” including $293,152.20 of priority sales tax and IRS claims and $4,648,944.20 of secured claims held by Empire Apple Holdings, LLC, Ford & Harrison LLP and the State of Florida.  Finally, the CMS outlines that Gator Apple’s remaining assets include “2 servers valued at $1000; cash on hand $200; and a deposit in the amount of $1,794,656.50 posted with the District Court, Dallas County Texas”.

creditors and debtors

Events and deadlines have been scheduled by the Court in the Gator Apple Chapter 11 case.  The meeting of creditors is currently scheduled for October 29, 2015 at the Flagler Waterview Bldg, 1515 N. Flagler Dr., Room 870, West Palm Beach, Florida.  The meeting of creditors is conducted by an attorney or representative for the U.S. Trustee’s office.  A representative for Gator Apple will be present at the meeting and sworn to answer questions under penalty of perjury.   Creditors may attend and ask Gator Apple’s representative questions pertaining to Gator Apple’s schedules, financial affairs, assets, their claim or any other matter pertinent to the administration of the bankruptcy case.  The representative from the U.S. Trustee’s office will also ask questions.

The current deadline for creditors (except a governmental unit) to file a proof of claim is January 27, 2016.


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

Gator Apple filed for chapter 11 bankruptcy protection today in the U.S. Bankruptcy Court, Southern District of Florida.  The Bankruptcy case number is 15-26825-PGH and the case has been assigned to the Honorable Paul G. Hyman.

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Among the 20 largest unsecured creditors are: Empire Apple Holdings, LLC ($4,348.528.00); Coca-Cola USA ($900,000.00); American Express ($50,000.00); Lee County Electric ($8,728.00) and CC Dickson Co. ($4,056.36).  The Gator Apple has not yet filed its Schedules, Statement of Financial Affairs, or Case Management Summary.  No deadline has been set to file proofs of claims yet.  More information coming soon!


Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.

It’s too early to tell whether Curtis James Jackson III, better known as rapper 50 Cent (“Jackson”), will be able to come to a consensual Chapter 11 plan for repayment with creditors.  However, based on the recent 2 hour status conference and hearings on various motions, the outlook is hopeful.  Jackson’s counsel indicated that they expect to file a consensual Chapter 11 plan of reorganization (“Plan”), or at least have narrowed the disputed issues relate to any proposed Plan, in 90-120 days.  Jackson’s professionals are currently working on projections and laying the groundwork for a meaningful conversation with creditors on a proposed repayment plan.

camp fire

In the meantime, Jackson’s counsel announced that he would soon be filing motions to employ brokers to sell Jackson’s Farmington home and Atlanta condominium.  These will be part of the money and assets used to repay creditors.  In addition, Jackson’s counsel indicated that Jackson has had a successful business history in promoting and improving the profitability of consumer brands.  Accordingly, Jackson is currently engaged in discussions for promotional agreements that will provide additional funds used to repay creditors.  It is also Jackson’s contention that he has a contribution claim against Rick Ross because Ross posted the video that is the subject of the Lastonia Leviston’s litigation first, before Jackson’s involvement.  This contribution claim may make additional funds available for distribution to creditors.  Jackson’s counsel indicated that his Plan will likely be for a term of 5 years.

With respect to the hearings set on Lastonia Leviston’s request to take the Rule 2004 Examination of Jackson and GSO Business Management, LLC (through Michael Oppenheim), the parties are going to work on a consensual order which provides that there will be one examination for each examinee where major creditors will be able to ask questions.  Jackson’s counsel said that Jackson is generally willing to provide financial information to creditors over the next 60 days.  The parties are attempting to negotiate issues related to the governing process for the examination, including the timing and scope of the examination. Similarly, the parties have agreed to work on consensual orders approving the employment of Jackson’s professionals.  If the parties are not able to come to a consensual agreement, they will seek further intervention from the Bankruptcy Court.

Will Jackson and the creditors be holding hands and singing “Kumbaya” over a consensual Chapter 11 Plan in 90-120 days?  We shall see how the case unfolds over the next 90 days and where things stand after the next status conference scheduled for September 18th.

Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP.  Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation.  You can contact Heather at 561-804-4419 or hries@foxrothschild.com.