Colony buys Jackson's 'bad' debt on Neverland Ranch
Los Angeles-based buyout firm Colony Capital has come to the rescue of world-renowned pop star Michael Jackson with the purchase of a distressed loan to his Neverland Ranch in California, averting a foreclosure auction of the property set for this week.
The eleventh hour rescue by Colony Capital comes two months after Jackson, who, has struggled to pay his debts over the last two years, struck an agreement with creditor Fortress Investment Group, the alternative investment firm, to postpone the auction.
Under the plan, Colony will acquire a $23.5m (€15.2m) loan Fortress initially extended but on which Jackson defaulted. Colony is “very comfortable” holding the loan while it negotiates payments terms, a person familiar with the situation told Reuters.
In a statement released yesterday, a spokesman for the pop star said Jackson was “pleased with recent developments involving Neverland” and that the rescue plan would allow him “to focus on the future".
The Neverland Ranch is located on an estate in the Santa Ynez Valley in Santa Barbara County, California. Jackson, who bought the property in 1988 for $28m, furnished the estate with a ferris wheel, a roller coaster and a zoo with elephants, giraffes and orangutans.
However, the estate reportedly fell into disrepair after Jackson left the area following his acquittal on child molestation charges in 2005.
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