Jackson was in debt, faced cash crisis

Jackson was in debt, faced cash crisis
Wednesday, May 04, 2005 16:42 IST
By Santa Banta News Network
Michael Jackson owed more than $230 million and was spending his way deeper into debt at the time he is accused of molesting a 13-year-old boy at his Neverland estate, a forensic accountant hired by prosecutors said on Tuesday.

Jackson faced a financial crisis that caused panic in his camp in early 2003 just after a damaging TV documentary showed him cuddling with his accuser and defending his practice of sharing his bed with children, prosecutors said.

The testimony by accountant John Duross O'Bryan was the most direct look at what prosecutors claim are the dire finances of the 46-year-old entertainer, who borrowed heavily against his ownership stake in a catalog of Beatles' hits.

"Mr. Jackson's financial condition was deteriorating up to (February of 2003)," O'Bryan said. "Expenditures were exceeding income, liabilities were increasing and there was a liquidity crisis."

Prosecutors are trying to convince jurors that Jackson's deteriorating finances gave him a motive for imprisoning his accuser's family and pressing them to tape an interview that praised him in a bid to salvage his public image.

Jackson, who has pleaded not guilty, faces more than 20 years in prison if convicted of all 10 charges against him.

O'Bryan, who pored over Jackson's financial records, said the entertainer was more than $230 million in debt in February 2003. At the time, he said, Jackson was spending $20 million to $30 million more than he was bringing in per year.

His lavish lifestyle was made possible in part by a $200 million loan from Bank of America secured by Jackson's stake in a valuable music catalog that included Beatles songs. Jackson owns the music in a joint venture with Japan's Sony Corp. known as Sony/ATV.

A second $70-million loan from Bank of America was secured by Jackson's stake in his own music catalog, O'Bryan said.

A balance sheet at end-June 2002 showed Jackson with a negative net worth of $285 million, O'Bryan said.

Even before that, Jackson's accountants had been cautioning that his spending habits were endangering his hold on one of his most valuable assets, his stake in the Sony catalog.
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