Colony Capital has saved Michael Jackson’s Neverland Ranch from the brink of foreclosure after acquiring debt believed to be worth up to $25 million (€16 million).
The Los Angeles-based firm bought the loan from an affiliate of alternative asset manager Fortress Investment Group. A person familiar with the matter said the deal was initiated by Colony.
The 2,800-acre ranch in Santa Barbara County, California was due to be auctioned off on May 14 after Jackson defaulted on loan payments worth an estimated $24.5 million.
Jackson said in a statement he was now in discussions with Colony founder Tom Barrack “with regard to the ranch and other matters that would allow me to focus on the future.”
Colony declined to comment on the matter, but people familiar with the situation said the deal was a business-driven investment with both sides now talking about the opportunities open to them.
The pop singer opened Neverland in 1988 as his own private amusement park and home, complete with a zoo, theme park, Ferris wheel and bumper cars. The ranch is no longer operational and the animals have been moved out. Jackson moved to Bahrain shortly after being acquitted of child molestation charges in 2005.
Fortress was instrumental in helping the embattled singer avoid bankruptcy in 2005, when it purchased $270 million in debt held by Bank of America. Fortress refinanced the loan, backed by Jackson’s 50 percent stake in Sony/ATV Music, the owner of the highly valuable publishing rights to songs by the Beatles, Bob Dylan and others. In 2006, Jackson sold an option for part of his ownership in the music to Sony.