Forensic accountants can play a critical role as expert witnesses in bankruptcy cases. Creditors or bankruptcy trustees who harbor suspicions of bankruptcy fraud turn to forensic accountants to determine whether a bankruptcy filing is legitimate. By scouring financial records, a forensic accountant hopes to determine whether a person or business filing for bankruptcy protection is concealing assets that could be used to satisfy the filer’s debts. Expert reports and testimony often provide essential evidence in hearings that challenge a debtor’s entitlement to bankruptcy relief.

A columnist for the Washington Post wonders whether forensic accountants will be called upon to lend their expertise in a bankruptcy proceeding that was recently initiated by Curtis Jackson. Better known to his fans as rapper 50 Cent, Jackson’s 2003 debut studio album, “Get Rich or Die Tryin’,” turned out to have a prophetic title. “Fiddy” Cent got rich and didn’t have to die tryin’. The album’s two number one hits (“In da Club” and “21 Questions”) assured 50 Cent’s financial success. Why then, the Post’s columnist wonders, is he filing for bankruptcy?

50 Cent’s Finances

Forbes recently estimated 50 Cent’s net worth as $155 million, placing him in the top 5 on Forbes’ 2015 list of wealthiest hip-hop artists. His investment in Vitamin Water, which he sold to Coca-Cola for somewhere between $60 million and $100 million in 2007, played a significant role in his wealth accumulation.

In addition to album sales, 50 Cent has starred in a number of film and television projects. His business ventures include a headphone company, a record label, and a vodka brand. He has also entered into lucrative endorsement deals with Reebok and a line of luxury men’s underwear.

So why does a successful artist and business investor require the protection of the bankruptcy court? A jury recently awarded $5 million to 50 Cent’s ex-girlfriend after finding that he violated her privacy interests by posting a revealing tape online. The bankruptcy petition was filed on the day the jury was to hear evidence concerning the plaintiff’s claim for punitive damages. The filing brought those proceedings to a halt, at least temporarily.

Lawyers for 50 Cent did not say whether the lawsuit was responsible for the Chapter 11 filing. Their public statement indicated only that 50 Cent wishes to pursue “an orderly reorganization of his financial affairs.” The brief, 5-page bankruptcy filing provides relatively little information about 50 Cent’s financial status, although it claims that he has assets and debts that are both in the range of $10 million to $50 million.

A Forensic Accountant Looks at the Bankruptcy Filing

The Post columnist solicited the opinion of a certified forensic accountant who has testified as an expert witness in a number of court cases. Since 50 Cent’s preliminary filing consisted only of five pages, however, the value of his Chapter 11 petition as an investigative tool was limited.

Filing an abbreviated petition triggers the bankruptcy court’s “automatic stay” that brings a halt to lawsuits and collection efforts. The skeletal filing is not in itself suspicious, although the timing suggests that 50 Cent may have had his fill of his ex-girlfriend’s lawsuit.

Harder to explain is the petition’s assertion that 50 Cent has assets of between $10 million and $50 million, an estimate that is difficult to reconcile with Forbes’ report that 50 Cent’s net worth is closer to $155 million. The value of his mansion declined as the real estate market fell (he listed it for sale at $18.5 million in 2007, then dropped the asking price to $10.9 million two years later), but the columnist wonders what happened to all that Vitamin Water money.

There may be nothing untoward about 50 Cent’s bankruptcy filing. On the other hand, it raises questions that might only be answered by forensic accountants serving as expert witnesses after the full Chapter 11 petition is filed.