50 Cent Nears Bankruptcy End With $23.4 Million Payout Plan

[wsj-responsive-image P="//art.wsj.net/api/photos/37403914/smartcrop?height=499&width=749" J="//art.wsj.net/api/photos/37403914/smartcrop?height=639&width=959" M="//art.wsj.net/api/photos/37403914/smartcrop?height=853&width=1280" caption="In this Oct. 26, 2015, file photo, Curtis '50 Cent' Jackson arrives at Media's Tribute to African-American Achievements in Television in Beverly Hills, Calif. The rapper got an initial nod form a judge on his bankruptcy plan." credit="Associated Press" placement="Inline" suppressEnlarge="false" ]

50 Cent could be close to getting out of bankruptcy after a judge gave an initial nod to the rapper’s plan to put up to $23.4 million of his future earnings, including profits from the sale of his Connecticut mansion, toward paying off his debts.

From her Hartford, Conn., courtroom, Judge Ann Nevins set a July 6 hearing to see whether the plan from the 40-year-old entertainer, whose real name is Curtis James Jackson III, is popular with the people and businesses who are owed money and can vote to accept it.

Mr. Jackson filed for chapter 11 protection on July 13 after losing a privacy lawsuit filed by a woman, Lastonia Leviston, who accused him of releasing her sex tape. Ms. Leviston once dated rapper Rick Ross, who has sparred publicly with Mr. Jackson as part of a long-running rap war.

The bankruptcy filing prevented Ms. Leviston from collecting her $7 million award and enabled Mr. Jackson to figure out how to pay roughly $18 million from a failed pursuit to design and sell headphones. Lawyers for those two groups initially questioned whether Mr. Jackson, who controversially posted stacks of cash on social media sites, was hiding money before reaching the current deal.

“It’s clear that Congress and the experts and practitioners who testified before Congress intended chapter 11 to be resolved by negotiation, and I think we’ve been able to do that,” said Pat Neligan, Mr. Jackson’s lawyer, at Wednesday’s hearing.

In a 65-page summary of the plan, Mr. Jackson’s lawyers said he plans to pay $7.4 million once the plan gets approval. He is also looking for buyers for his Farmington, Conn., mansion, once owned by boxer Mike Tyson, that is reported to have 21 bedrooms, a racquetball court, a home movie theater and an eight-car garage. The property is worth $8.25 million, according to documents filed in U.S. Bankruptcy Court in Hartford, Conn.

The rest of the money would be paid over the next five years. In addition to payments of up to $23.4 million, Mr. Jackson agreed to throw in 70% of whatever money he wins in a malpractice lawsuit.

The proposed payment schedule incentivizes Mr. Jackson “to pay as much as possible, as fast as possible, so he can obtain the greatest savings,” according to Mr. Jackson’s lawyer. In the end, his debts could be paid between 74% and 92%.

Mr. Jackson shot onto the music scene in 2003 with his debut album, “Get Rich or Die Tryin’,” and hit rap song “In Da Club.”  He has sold more than 22 million albums and, as chief executive of G-Unit Records, he oversees well-known music artists like Lloyd Banks, Tony Yayo, Young Buck, Kidd Kidd and Rotimi.

He has also appeared on the big screen, co-starring in the Starz drama “Power” that premiered in June 2014. Last year, he appeared in Melissa McCarthy’s “Spy” and the boxing drama “Southpaw.”

In March, A&E announced plans for a new variety show called “50 Cent Presents.”

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech