Debts total more than $120 million.
Marion "Suge" Knight Jr. and Death Row Records filed petitions for bankruptcy today (April 4) avoiding more than $120 million in debts and the threat of a California judge ordering a court officer to take control over the label.
The move comes three days after Knight failed to appear – for the fourth time – in a California state court to identify all of his assets in a receivership proceeding, says attorney Steve Goldberg. He represents Michael Harris who, with ex-wife Lydia Harris, is trying to collect on a $107 million judgment awarded last year after Knight failed to defend Lydia Harris' claim for profits after helping to start Death Row.
The petitions list debts, which are not secured by any assets, totaling more than $120 million. They include the $107 million Harris judgment plus $11.7 million in back taxes, $10,000 under cell phone contracts and $900,000 in past legal fees -- about $350,000 to Christensen Fink Miller and $74,000 to Harold Becks in Los Angeles, and $483,000 to Amanda Metcalf in San Rafael, Calif.
Knight and Death Row also list as a potential debt the claim by Bridgeport Music, the music publisher that filed nearly 500 lawsuits in Nashville in 2001 against various parties for unlicensed samples. Bridgeport won a $4.3 million judgment against Bad Boy Entertainment, Bad Boy LLC and Universal Records in March.
The petitions automatically halt all other court actions. A bankruptcy trustee will be appointed to handle liquidation of assets and possible payment to some creditors.
Knight, who listed in the court documents his California street address in Compton and his mailing address in Beverly Hills, is asking the bankruptcy court to relieve him from paying all of his personal debts under Chapter 7 of the federal bankruptcy law. Death Row filed under Chapter 11, which will likely require the label to repay some debts.
Greenberg tells Billboard.biz that he believes the shift to federal court is an attempt to avoid the California court's taking over the label. "We'll follow Suge Knight into whatever court he wants to go into," says Greenberg. "State courts, federal courts, bankruptcy courts or the courts of hell."
Suge Publishing Group, which was listed in the court documents as the company that advanced attorney's fees of $50,000 to Knight's bankruptcy attorney Daniel McCarthy, did not appear to file a bankruptcy petition.
Robert Altagen, who represents Death Row in the bankruptcy, and McCarthy could not be immediately reached for comment.