Bankruptcy

Michael Jackson, Neverland Ranch and Foreclosure

By meaghano

When ambulances were called to Michael Jackson’s home last Thursday, they went to the Beverly Hills mansion he had been renting.

Jackson’s most famous residence, the lavish, one-of-a-kind, amusement park-like Neverland Ranch, hadn’t been his home for many years.

Amazing pictures of Neverland Ranch.

Jackson purchased the property in 1987 for almost $20 million. At the time, it was a working ranch, but under Jackson’s care it would become a shrine to the childhood Jackson never had. From nineMSN:

The singer spent $35 million improving the property, which featured two railway lines, two helicopter pads, its own fire department, a zoo and a plethora of amusement part-style rides. The property cost an estimated $10 million a year to maintain.

Jackson lived at the ranch for many years, and underprivledged and sick children from California and across the country came to visit his theme-park.

But all the while Jackson was very private about the property. Visitors weren’t allowed to take pictures inside, and they were required to sign confidentiality agreements upon arrival.

Perhaps the most intimate view of the property came from a lengthy “20/20″ report that highlighted some of the property’s extraordinary features.

But the joy of Neverland Ranch, named after the magical land in “Peter Pan” were children never grew up, wouldn’t last.

Jackson had an almost $25 million loan out on the house. In 2007, he was $23 million delinquent on the loan and foreclosure proceedings began.

In California, after you miss three mortgage payments in a row you have 90 ndays to make a payment. Jackson, who hadn’t released an album since 2001, was unable to make a payment.

For most people, this would have been the end of the line. For most people facing imminent foreclosure, bankruptcy is the best option for protecting their home. Of Course, Michael Jackson isn’t most people.

Jackson’s celebrity helped stop home foreclosure. His debt was transferred to another loan company, and the property stayed with him.

However, Jackson continued to have money problems. The zoo and many of the amusement park rides were auctioned off. With money problems and child molestation charges - stemming from a child’s visit to the ranch - Jackson said he could no longer feel at home there.

And then the man who had already spent so many nights in hotels across the world while on tour, began living elsewhere.

At the time of his death Neverland Ranch was still in Jackson’s possession. Today, the property is valued somewhere between $90-120 million. With his death, the property may be worth even more.

But with Jackson’s debts rumored to be near $500 million, the property could be auctioned off to pay his creditors. Others, however, say that the property may become a museum similar to Elvis Presley’s Graceland.

Full post as published by The Bankruptcy Blog on June 27, 2009 (boomark / email).