Fortress Investment Group exited all its investments related to deceased pop star Michael Jackson more than a year ago, according to people familiar with the matter.
Jackson, who died Thursday, had turned to private equity in the last years of his life as his extensive debt load threatened to bankrupt him.
In 2003, Fortress was instrumental in helping the embattled singer avoid bankruptcy, when it purchased $270 million in debt held by Bank of America. In 2005, Fortress refinanced the loan, backed by Jackson’s 50 percent stake in Sony/ATV Music, the owner of the highly valuable publishing rights to songs by the Beatles, Bob Dylan and others. In 2006, Jackson sold an option for part of his ownership in the music to Sony.
Colony Capital also stepped in to save Jackson's 2,800-acre Neverland ranch in Santa Barbara, California, which Fortress had threatened to foreclose on last May after Jackson defaulted on loan payments worth an estimated $24.5 million. Colony bought $25 million of debt from Fortress.
A spokeswoman for Colony on Friday declined to comment on the investment, saying it was “premature” to discuss the issue.
Colony Capital founder Tom Barrack said he was “deeply saddened” by Jackson's sudden death, adding: “Over the last year, I have had the opportunity to know and work with this gentle, talented and compassionate man. We were privileged to help support his return to public life for his family, friends and fans, who meant so much to him.”
At the time of Colony's investment in Neverland, people familiar with the matter said Colony initiated the deal to buy the loan from an affiliate of Fortress. Jackson said in a statement last May that he had been in discussions with Barrack “with regard to the ranch and other matters that would allow me to focus on the future”.
The pop singer died Thursday afternoon in full cardiac arrest at a Los Angeles hospital after he collapsed at his nearby rented home.
Jackson opened Neverland in 1988 as his own private amusement park and home, complete with a zoo, theme park, Ferris wheel and bumper cars. The ranch is no longer operational and the animals have been moved out.