Is 50 Cent really bankrupt?

Rapper Curtis "50 Cent" Jackson filed for bankruptcy on the same day a state court jury was to hear evidence as to the amount of punitive damages against him in a lawsuit over a sex tape, putting that case on hold. The jury had already awarded $5 million to the plaintiff in compensatory damages. All puns aside, was Jackson really bankrupt, and does it matter?

The bankruptcy filing was what my late mentor used to call a "flat puppy." The document is only five pages and it checks a few boxes: There are 1 – 49 creditors, and he estimates that both his assets and his liabilities are worth between $10 and $50 million. He provides no other details. A flat puppy filing is just enough to get your foot in the bankruptcy court's door, without disclosing any details.

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But, does it matter? Not really. The bankruptcy code long ago dropped references to the "bankrupt," because proof of insolvency was not required to file a voluntary bankruptcy case. In 1982, building-supply maker Manville filed for corporate bankruptcy as it faced an unprecedented asbestos-liability lawsuit and someone estimated the firm to be worth a billion dollars.

Mr. Jackson is the "debtor." What matters for filing for bankruptcy relief is whether the case was filed in good faith. Was it a litigation tactic or a good faith attempt by the debtor to restructure debts and pay creditors?

The state court case over punitive damages was immediately halted with the bankruptcy filing but within hours, the plaintiff asked the bankruptcy court to allow the state court case to go forward. Her motion recited a long litany of efforts by the debtor to hinder and delay the trial. The state court judge is holding the jury and the bankruptcy court will decide on Friday if the state court trial will continue. The odds are pretty good that the bankruptcy court will allow the jury to decide the amount of punitive damages.

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But, that won't end the bankruptcy case. 50 Cent will be required to submit, under oath, a detailed schedule of all of his holdings. He must disclose all transfers of property within the past year. We soon will know if he is actually insolvent — even if that is not required to file for bankruptcy. The creditor hopes and believes that he can pay any judgment in full, and the bankruptcy court has the power to compel it.

In the end, Mr. Jackson may not be laughing "straight to the bank" with this case.

Commentary by Dennis Wickham, a partner at the San Diego law firm Seltzer Caplan McMahon Vitek, who specializes in bankruptcy cases. Follow him on Twitter @DennisWickham.