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Michael Jackson strikes debt deal

The long and winding road of Michael Jackson, from King of Pop to strange recluse with cash troubles, has led to a deal that will help avert his bankruptcy in exchange for a slice of music history -- his share in the Sony/ATV Music catalogue, which contains hits from Bob Dylan, the Beatles and other stars.

Jackson restructured his finances with the help of Sony Corp, which shares ownership of his valuable music catalog, Jackson attorneys said in a statement.

No terms of the deal or the state of Jackson's finances, long believed to be troubled, were disclosed in a brief press release issued on Thursday from Bahrain, where the pop star has been living since being acquitted of child molestation last year in California.

Earlier published reports said Jackson was negotiating a US$325 million debt refinancing plan that would save him from bankruptcy but deprive him of part of his share of the catalog.

Jackson "has restructured his finances with the assistance of Sony Corporation of America," said the statement issued by Grahame Nelson of Qays H. Zubi Attorneys & Legal Consultants, who said he was speaking for Jackson.

"Following negotiations with several leading financial institutions, Mr Jackson has concluded refinancing with affiliates of Fortress Investment Group, the lender that currently holds secured debts that were previously held by Bank of America," the statement said.

Qays H. Zubi Attorneys & Legal Consultants was part of an advisory team that included Bahrain-based financial adviser Ahmed Al Khan, it said.

Jackson's US spokeswoman, Raymone Bain, said Qays Zubi was an adviser to Jackson but she could not confirm the contents of the news release issued from Bahrain.

A spokeswoman for Sony ATV declined to comment on Thursday. Fortress and Nelson did not return calls from reporters after business hours.

Financial experts who testified at Jackson's trial said the pop star was on the brink of bankruptcy and would likely be forced to sell his interest in the catalog. Jackson recently had to shutter his elaborate Neverland ranch in Santa Ynez because of unpaid salaries and insurance fees.

Jackson has owned his stake of the catalogue since the 1980s, a decade that brought him multiple Grammys with his Thriller album, and vast wealth through a sponsorship deal with Pepsi. He paid US$47.5 million for his 50 percent stake in the collection; today, the catalogue is valued at US$1 billion.

The deal, coming nearly a year after Jackson was acquitted of child molestation, could open a new page in the life of a man known more for his bizarre antics than for his music. Since relocating to Bahrain Jackson has faced rising expenses and little prospect of earnings with no new album or tour due. Sources say he was determined at all costs to avoid being forced into bankruptcy.

Sony was also keen to avoid bankruptcy as it would have seen half of the valuable catalogue -- owned 50/50 -- put up for auction, and a collection of hits that included 251 Beatles songs and Dylan tunes scattered to the winds.

Sony executives are understood to have negotiated a refinancing with the Citigroup bank before Fortress, known as a "vulture" fund because of its interest in difficult debts, agreed to refinance the terms of its own loan to Jackson.
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