How did they lose ALL of that money ??

OK, you've got me! You have read the long list of famous celebrities who filed bankruptcy, and I know you are asking yourself, seriously how did they spend all of that money ? The answer is too quickly!

All kidding aside, bankruptcy can happen to anyone - it does not discriminate based upon beauty, job title or how good of a person you are in, in fact you can have a perfect financial plan and circumstances can change in an instant, leaving you facing bankruptcy.

Today, we are going to focus on a celebrity bankruptcy case that made headlines around the world and in the rap community - the bankruptcy case of Marion Knight, Jr better known as Suge Knight,  former CEO of Death Row Records.

Suge Knight, co-founder and former CEO of Death Row Records, made his name and his fortune in the hip hop community, when his record label dominated the charts with a long list of successful artists including Tupac Shakur, Dr. Dre, Snoop Dogg and Tha Dog Pound.

His circumstances changed, when Dr. Dre decided to leave and form his own label. Things continued to decline and turned tragic when Tupac Shakur was murdered in a drive-by shooting in Las Vegas NV in September of 1996.

In March 1997, Shakur's East Coast rival, The Notorious B.I.G., was murdered in a similar fashion and speculation immediately arose that Knight was involved

In between, the tragic losses of Tupac Shakur and The Notorius B.I.G. - Shuge Night, violated his probation, a choice that cost him his freedom.  In 1997, he was sentenced to nine years for the violation.
He was released four years later but he didn't stay out of trouble for long in 2003, he was again sent to proison for violating parole after stricking a parking lot attendant.

The tragedy, violence and speculation led to the decline of the label. Despite trying to save the label by releasing a new Snoop Dogg album and posthumous Tupac Shakur albums, the label was in financial trouble.

His label was in financial trouble and he was also facing civil litigation, in which he was ordered to pay $107 million dollars to Lydia Harris, who claimed she was cheated out of a 50% stake in Death Row Records.

On April 4, 2006, Suge Knight filed bankruptcy. According to Wikipedia,

"Bankruptcy documents filed showed Knight had no income this year from employment or operation of a business. According to financial records, his bank account contained just $11, and he owned clothing worth $1,000, furniture and appliances valued at $2,000, and jewelry worth $25,000. He also testified that the last time he had checked the label’s financial records was at least 10 years prior. Knight’s lawyer said that his client was still “at the helm” of Death Row and had been working on securing distribution deals for the label’s catalog."

Suge Knight missed two meetings with creditors after injuring himself in a motorcycle accident and experiencing a death in his family. On July 7, 2007 a federal judge ordered a bankruptcy trustee takeover of Suge Knight's Death Row Records, saying the record label had undergone a gross amount of mismanagement.

Knight filed for Chapter 11 Bankruptcy protection, which allows a company to continue business operations while restructuring.

In June 2007, he placed his seven-bedroom, 9½-bath home in Malibu on the market for $6.2 million as part of his "financial makeover". The mansion was finally sold in December 2008 in bankruptcy court for $4.56 million.

To read more about Suge Knight's Bankruptcy, click here.
Need more information on bankruptcy or want to schedule a free consultation ? Contact Foster Law Offices.

Posted in Celebrity Bankruptcy , Chapter 11 Bankruptcy , Suge Knight