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Home / World

Jackson faced $319m debt around time of alleged molestation

4 May, 2005 01:12 AM3 mins to read

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SANTA MARIA - Michael Jackson owed more than $US230 million ($NZ319 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 today.

Jackson faced a financial crisis that caused panic
in his camp in early 2003 just after a controversial 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.

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 $US230 million in debt in February 2003. At the time, he said, Jackson was spending $US20 million to $US30 million more than he was bringing in per year.

The lavish lifestyle was made possible in part by a $US200 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.

"Mr Jackson's financial condition had been deteriorating up to February 2003," O'Bryan said, adding that Jackson's debt had risen by $US70 million since 1999.

A balance sheet at end June 2002, showed Jackson with a negative net worth of $US285 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.

A memo in 2000 showed Jackson had income of $US11.5 million in the prior year but that was swamped by more than $US20 million in expenses, including $US5 million for legal costs and other services, $US5 million to run Neverland and $US7.5 million of personal spending, O'Bryan said.

On cross-examination, lead defense lawyer Tom Mesereau suggested that Jackson could easily have solved his "liquidity crisis" by selling his stake in the Beatles' catalog.

Earlier, Santa Barbara County Sheriff's Department Sgt. Steve Robel testified about a taped interview with Jackson's ex-wife Debbie Rowe from March 2004.

Rowe, who surprised onlookers by praising Jackson on the stand last week, had called him a "sociopath" in the interview with police, Robel said. Rowe also said Jackson considered his children "possessions," Robel said.

Rowe, who was married to Jackson from 1997 to 1999 but never lived with him, is the mother of his two oldest children, Prince Michael and Paris.

- REUTERS

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