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Loans -
Michael Jackson enters loan market to save home
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Singer Michael Jackson is taking a step into the loans market to stave off foreclosure on his beloved Californian Neverland ranch.
Jackson, was revealed to owe $150,000 (£75,000) on the property last week,and has decided to take out a new loan to avoid the auction of his fantasy theme park that he has owned since 1988.
Creditors had informed Jackson that it would be auctioned off on 19th March, a cruel blow for the star as the auction would have taken place at Santa Barbara County Courthouse. This is the same court that cleared him of child abuse allegations in 2005 and despite the stress caused to Jackson, none of them were upheld. Since his acquittal in 2005, he has spent much of him time abroad, mostly in Dubai, which is tax haven for wealthy foreigners.
An insider to Jackson in a CNN report said: “Michael Jackson’s ranch is not going to be auctioned off at the courthouse. The financing is all being worked out. There are plenty of lenders willing to work with him. The real estate market is very bad right now and Michael is being affected just like many other Americans.”
Tax has been an expensive burden on his lifestyle, which at one point contained many homes across a range of states in the U.S. Last month, the Jackson family home in L.A’s exclusive San Fernando Valley was up for default on a massive $600,000 (£302,000) tax bill. That was only just saved from repossesion at the last minute.
Neverland is not a home Jackson would leave lightly, despite being associated as a self indulgent shrine to his downfall from pop icon to recluse; it was still his personal crowning glory. When bought in 1988 it was a rather quaint ranch, viewed as an escapist purchase with 2,800 acres of beautiful scenery which offered ultimate privacy. Eventually it ballooned into a Disney rivalling fantasy world with a huge plethora of staff and rides. It even included a private zoo, with a whole range of exotic jungle creatures.
It was an expensive dream with rumours speculating that monthly running costs were at one stage $2m (£1.7m) a month. In 2006 30 workers claimed un-paid wages of $306,000 (£151,000) for one month alone after Jackson defaulted.
Unlike many corporate enterprises, he ran it without profit and invited disadvantaged children from across the world access to its facilities.
Selling Neverland now could be a shrewd move for the singer in the long run as sources suggest he could sell his $13m (£6.5m) purchase for $24.5m (£12m) today. This is quite an impressive profit in the face of a failing world economy, although poor MJ will still be subject to the stiff state capital gains tax. No wonder he prefers Dubai these days.
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