In Bankruptcy News, celebrity bankruptcies

Twice before I’ve written about rapper 50 Cent’s financial problems, here and here. Now it seems he’s put them all behind him, courtesy of $8 million in Bitcoins he forget he has.

Two days ago, TMZ reported that 50 Cent is now a millionaire thanks to forgotten Bitcoins he accepted in 2014 as payment for an album, Animal Ambition (an unremarkable album, by most accounts). At the time he was paid 700 Bitcoins, which had a value of some $400,000. He put them in his account and forgot about them, he says. Now, with Bitcoins valued at $10,000 to $12,000 per coin, his 700 are worth between $7,000,000 and $8,400,000.

50 Cent’s bankruptcy, which he filed in 2015, was discharged in 2016 after he agreed to pay $23 million to settle creditors’ claims. He had filed Chapter 11, which is a reorganization plan, and is based on a lengthy, detailed disclosure statement filed with and approved by the Bankruptcy Court. The purpose of the disclosure statement is to give creditors and the court sufficient information about the financial condition of the debtor (50 Cent) to decide whether to support or oppose the plan that the debtor proposes.

This revelation of forgotten millions raises questions about his discharge. Those Bitcoins were his as of 2015 when he filed bankruptcy. If he had forgotten about them, it’s likely he didn’t disclose ownership of them in his bankruptcy schedules. Failing to disclose property one owns is bankruptcy fraud, if the omission is intentional. Assuming he truly forgot, at the least this new information could raise questions about the accuracy of the disclosure statement and the fairness of the plan that was confirmed and on which 50 Cent received his discharge. It’s conceivable some of his creditors or the United States Trustee, who oversees Chapter 11 cases, or even the Bankruptcy Court, could ask to reopen the case to consider the effect of the Bitcoins.

Stay tuned. Something tells me we’re not done with 50 Cent’s saga.

Recommended Posts

Leave a Comment

Free Consultation

Not readable? Change text.

Start typing and press Enter to search