from cnnfn.com:
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May 5, 2005: 12:00 PM EDT
NEW YORK (CNN/Money) – Michael Jackson, the legendary pop star facing child molestation charges, could lose his stake in the lucrative Beatles music catalog.
Two loans estimated at $270 million that are tied to the Beatles catalog and other assets have been sold by Bank of America, the nation’s No. 2 bank, to a private hedge fund, CNN/Money has learned.
Collateral for the loans include Jackson’s 50 percent stake in Sony/ATV Music Publishing, which holds copyrights to more than 200 Beatles songs. The loans were also secured by Jackson’s own music library and a partial deed on his Neverland Ranch in Santa Ynez, Calif.
It was not immediately clear whether Jackson has defaulted on the loans. If he does, New York hedge fund Fortress Investment Group could take over Jackson’s stakes in the music portfolios and in Neverland. Legal experts, however, said that’s an unlikely outcome.
Typically, when a debtor defaults on a loan, terms are either renegotiated or the debtor is forced into bankruptcy. Another option is for the lender to sell the loan — and the collateral with it — to another party.
Either way, the risk that Jackson could lose the copyrights to the Beatles songs as well as his own hit recordings is real.
