Young Buck Faces Bankruptcy
Rapper Young Buck's (David Darnell Brown) Chapter 11 bankruptcy restructuring may no longer be feasible due to unresolved disagreements. The Chapter 11 bankruptcy trustee Jeanne Burton has ruled that the unresolved contract issues preventing the approval of the bankruptcy plan and the inability to recover misappropriated assets warrants liquidation in Chapter 7 bankruptcy .
Burton has been working since January to investigate Young Buck's financial situation and to formulate a plan to exit bankruptcy. In June, Burton and Young Buck filed that plan, which counted on the rapper's ability to modify a recording agreement with 50 Cent's G-Unit Records and a distribution agreement with Universal Music Group. The revamped agreements would provide the revenue needed to pay off Young Buck's creditors, according to the plan.
However, G-Unit records is not in agreement about each side's obligations under the recording agreement and has opposed Young Buck's bankruptcy plan leaving the case in limbo. If the bankruptcy court approves the liquidation, Young Buck's assets will be sold and the proceeds used to repay creditors.
What Can Ordinary Debtor's Learn From Young Buck's Case?
There are two major takeaways from Young Buck's failed bankruptcy restructuring, 1) Remaining as amicable as possible with creditors is important especially if you need to negotiate terms of an existing agreement during bankruptcy. A matter of fact, it's best if you negotiate those terms before you file bankruptcy. 2) Never transfer funds to anyone right before filing bankruptcy. And "right before" could be defined as much as two years before a bankruptcy depending on who the asset was transferred to and the type of asset transferred. If a transfer was made, immediately tell your bankruptcy attorney about it because it's not something that you can hide. In some cases, the bankruptcy attorney can work with a debtor to reverse an illegal transfer of assets.